Hard lessons for private schools as the recession bites
Parts of the sector are going through a crisis, reports Neasa MacErlean
Saturday 01 September 2012
Gosfield School in Halstead, near Braintree in Essex, is cutting its junior school fees by between 18 and 40 per cent when it opens its doors to its 200 pupils next Wednesday. Gosfield believes it is the first independent school to slash its fees on this scale. At entry level, parents will be paying £1,500 a term for their four- or five-year olds, down 40 per cent on the £2,480 they paid previously.
Parts of the private-school sector are currently going through a time of crisis as parents struggle to pay the fees. Some schools will be tempted to increase their charges. Others, like Gosfield, will try other strategies.
One headmaster says: "I know of quite a few schools which have gone down considerably on numbers. There are going to be a lot of closures and mergers. Some will become co-eds, rather than being single-sex."
Neil Roskilly, the chief executive of the Independent Schools Association (ISA), says: "Private-school pupil numbers have mostly held up, with London and the south-east being largely immune from the recession, particularly where pressure for places is historically strong. However, isolated small schools (often single-sex) in the regions have certainly felt the pinch and many of these are hoping to just ride out the recession."
Private schools are already shutting down. Oakfield School in Woking announced that it was closing near the start of the summer holidays, leaving parents only a month to find places for their children this term.
Schools are regarded by banks just like other businesses, and loans are being called in, which is forcing some schools to sell off property assets and, in a few cases, to close.
RBS is seen as being "the worst offender" by the ISA. "They've got about 10 schools on their hit list that we are aware of," Mr Roskilly says.
RBS denies that it is anti-school, believing that it may show up more often in statistics than other banks only because it has a larger market share.
"We are very supportive of this sector," a spokesman says. "We have specialist managers to help schools if they do get into trouble. That's free of charge. But this sector is suffering. School fees come from households' discretionary spending, and that gets looked at in the downturn."
So what can parents do to avoid financial problems in paying fees? First, they should recognise that many others are struggling and that head teachers would much rather hear about the problem in advance than on the eve of a default.
"A lot of the meetings I have with parents now are to do with the recession," says Ian Daniel, the head of Rushmoor School, which has more than 300 pupils aged two to 16 in Bedford.
He is clear that he would rather be forewarned about any problems.
"Making parents feel at ease in the school is important," he says. "Parents are more likely to open up and be honest about the situation they are in if they are at ease."
James Wilding, the academic principal of Claires Court School in Maidenhead, believes parents may need to mix state and private education, rather than trying to educate all their children privately for their entire school careers.
"The majority of our families are using a mixed menu," he says, referring to the 1,000 three- to 18-year-olds who attend Claires Court.
Parents can also ask for bursaries or for different payment arrangements in order to stagger their fees.
"We often find ourselves having to support someone through the last year of primary school or GCSE," says Mr Wilding.
Similarly, Catherine Mawston, the head of Dodderhill School, for 220 three- to 16-year-olds near Droitwich Spa, says: "We are very sympathetic."
For instance, on fees of about £9,000 a year, Dodderhill has allowed some parents who were made redundant to pay just £100 a month on a temporary basis while they looked for a new job.
Rushmoor, Claires Court and co-ed Kirkstone House in Lincolnshire are among the many establishments which allow parents to spread payments over monthly direct debits, rather than paying much heftier sums at the start of each term.
Many schools are painfully aware that the outlook for parents' incomes might not improve for many years. If the downturn is likely to last another five years then the effects on private schooling will last for 10 years altogether, according to Ms Mawston.
"This will affect schools for five years after the recession," she says. "We plan on keeping everything pretty tight."
Many schools will stay away from buildings expansion.
"Major building projects have been put on hold," says Kirkstone House's head Corinne Jones.
Expanding the curriculum has been given preference over construction. Girls' schools in particular may be cutting back as they are less likely than the prestigious boys' schools to have cash reserves in the form of endowments.
Despite rising costs in some parts of their budgets – particularly an expected rise in pension payments – many schools are trying hard to keep fees increases down. Claires Court will try to stay at or below the rate of inflation. Rushmoor fees are going up 2 per cent this year, for the second year running. But some schools, perhaps including those with more demand for places, do not feel the need to cap fee increases and can be less sympathetic to parents in trouble.
"I see quite a few independent schools who are quite ruthless," says one head. "If you can't pay you are out."
Schools are reluctant to do away with the trips they organise for pupils, not least because these are a useful marketing tool when recruiting new children.
However, many institutions are aware that some parents simply cannot afford all the trips now. So Claires Court, for example, does the expedition module of the Duke of Edinburgh awards locally, an exploration of local environs which, says Mr Wilding, the children find "fascinating".
Dodderhill has "only one expensive trip a year", says Ms Mawston.
Staff try to keep costs down to £600 to £800 a head. The last one was a music trip to Barcelona.
In the state sector, funding is staying flat to schools in cash terms.
"That means real-term cuts," says Martin Johnson, deputy general secretary of the Association of Teachers and Lecturers.
After reforms of the funding system come in from April, more cash is likely to go to schools with large proportions of pupils on free school meals.
"There will be winner schools and loser schools," says Mr Johnson.
He is also worried that hard-pressed local authorities are increasingly withdrawing the centralised organisation they provide for schools on issues such as sport, art, music and the provision of educational psychologists.
Back at Gosfield School, principal Dr Sarah Welch hopes the cut in junior school fees is only the start. Could fees be reduced in the senior school too?
"We'd love to be in a position to do that," she says. "That will depend on how our numbers continue to rise."
Case study: The financial strain was enormous’
Nicky (not her real name), a mother-of-three, describes her experiences:
"We sent our oldest two sons to the best school for them as they were not very self-confident aged 11. They needed the small nurturing community that a private school near us offered. However, the finances were a precarious undertaking, even though we both had secure jobs throughout.
"We started at £6,000 per year for the first one. When a new head teacher arrived, who ambitiously expanded the school and raised the fees each year, we were finally paying £11,000 each boy!
"This was an enormous financial strain we had not predicted. We looked into transferring back into the state school system but it was a punitive process. By this time they were in the process of exam courses which do not easily transfer due to different exam boards being used and, of course, there were no places in the good local school that their friends attended. Instead they would have had to travel in the opposite direction to a 'sports specialist school'.
"So instead we just tightened our belts and had cheap seaside holidays, made no investment in the house, kept the same car, same winter coats etc.
"It's been money well spent, I think, when you see the big confident boys today, travelling independently and finding internships."
Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk
The best deals on personal loans: Peer-to-peer providers are more competitive for smaller sums
China stock market: My portfolio's in pain, but it was never for the financially faint-hearted
China stock collapse: Five things you need to know about 'Black Monday'
Questions of Cash: 'Our dividends seem to have disappeared when TSB was bought and then born again'
Mark Dampier: 'Masterly inactivity - the case for sticking with smaller firms'
- 1 The difference between a migrant and refugee, in one sentence
- 2 Miley Cyrus calls out hypocrisy of women’s nipples being taboo
- 3 Celebrity Big Brother 2015: Tila Tequila kicked off show after 'describing Hitler as a good man'
- 4 Watch the Supermoon live: How to see the brightest Moon of the year tonight
- 5 iPhone 5c to be discontinued, no iPhone 6c to replace it
Climate change: 2015 will be the hottest year on record 'by a mile', experts say
'Women only' train carriages: Jeremy Corbyn unveils radical move to tackle public harassment
Black holes are a passage to another universe, says Stephen Hawking
Iain Duncan Smith 'should resign over disability benefit death figures', says Jeremy Corbyn
Stock up on canned food for stock market crash, warns former Gordon Brown adviser
Labour leadership: Jeremy Corbyn voters most likely to believe 'world is controlled by a secretive elite'
iJobs Money & Business
£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...
£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...
£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...
£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...
Day In a Page
In a sandbanks location, moments from the beach, this three-bedroom apartment has a large open-plan living area and a south-west facing balcony.
This four-bedroom home has an annexe accessed from the side of the house, with potential for improvement and conversion subject to the necessary permissions.
In the heart of the hamlet of Wardley, this five-bedroom period home offers countryside views and a stylish interior, with original features and open fireplaces.
Offering countryside views and landscaped gardens, this three-bedroom Grade II-listed lodge has a spacious conservatory and a large cellar that could serve as a workshop.
Set in approximately 1.5 acres, this four-bedroom home comes with a second, detached property that's currently used as an annexe.
In the hamlet of Newchurch, this former parish church is now a four-bedroom home complete with clock tower and eyrie.
Offering scenic views from a large balcony and sun terrace, this four-bedroom home has a wraparound garden and a heated swimming pool.
Offering views across the Humber and East Yorkshire Wolds from a glass panelled balcony, this four-bedroom barn-style home befits a life of leisure.
This four-bedroom home offers versatile accommodation with annexe potential; features include a hot tub, sauna and Norwegian BBQ hut.
Well-located for schools, colleges and the town centre, this contemporary thatched cottage offers flexible living space with six bedrooms.
Built in 1907, this four-bedroom Edwardian period home has been refurbished by the current owners, retaining many original period features.
Surrounded by landscaped gardens, this five-bedroom home offers living space across three floors.
This lovely country home in Burnham Market is currently run as a popular holiday cottage, with five en suite bedrooms and colourful gardens.
This three-bedroom 17th-century former village bakery is just a few miles from the East Sussex coast.
Set on a landscaped plot, this light and airy four-bedroom home comes with a log burner in the lounge, a fitted kitchen and an open-plan ground-floor layout.
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
Built on a former chapel site, this impressive four-bedroom home boasts balconies, stunning views and contemporary modern living.
This three-bedroom house is situated in a quiet mews and set over three floors. Features include glazed staircases and high ceilings.
A period townhouse set over four floors, this five-bedroom home was built in the 18th Century and retains many original features.
With five bedrooms, this spacious home offers beautiful gardens and modern interiors - set within the popular market town of Bingley.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
In the pretty market town of Bungay, this grade II-listed Mill House is arranged over four floors, offering four bedrooms and three reception areas.
This first-floor flat comes with two bedrooms, an impressive open-plan reception room and two lovely roof terraces.
This five-bedroom home comes with a range of outbuildings including a large barn which could be converted into a self-contained granny-flat or rental.
Moored at Taggs Island and reached via a pretty garden, this two-bedroom houseboat has a vaulted reception room and skylit garden studio - currently a beauty salon.
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
A contemporary house spread over three storeys, this three-bedroom detached home has large sliding doors that open out to the River Quaggy.
Moored in Chelsea's Cheyne Walk, this houseboat offers two double bedrooms and a teak deck that's ideal for al-fresco dining.
This former village bakery, dating back to the 17th century, is now a three-bedroom detached home just a few miles from the East Sussex coast.
On the picturesque Isle of Man, this four-bedroom character home has a ground-floor shop that's currently run as a newsagents and a flat that would make an ideal holiday let.
In a new collection of flats, this first-floor two-bedroom apartment offers ample entertaining space and a prime view of Furze Green from a private balcony.
This three-bedroom stone-built cottage currently trades as the village store with a restaurant in the annexe and family accommodation on the upper floors.
Previously two semi-detached properties, this five-bedroom home is spread over three floors with a large breakfast kitchen, orangery, office and gym on the second floor.
This five-bedroom home enjoys countryside views over the Blyth estuary to Southwold, offering flexible living space with a ground-floor annexe - ideal for use as a holiday let.
Close to the market town of Eye, this four-bedroom detached home offers a double-height living room which takes the place of the original, 19th-century, chapel nave.
Dating back to the 19th century, this four-bedroom home needs modernising. Spanning three storeys, the red-brick house has a fireplace, a small terrace and a cellar.
Just outside of Cambridge, this single-storey home offers three double bedrooms, a living room with vaulted timber ceiling and ladder steps that lead to a mezzanine study area.
This six-bedroom Georgian home is on three floors with open fireplaces, a two oven Aga, an annexe, and cottage gardens with outbuildings and a car barn.
A former coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, an attached office, kennels and an outbuilding that's currently used as a gym.
Located beside an impressive Victorian viaduct, this four-bedroom home has an open-plan living area that is glazed on two sides, with skylights and high ceilings.
A former furniture workshop, this three-bedroom home has high ceilings and painted brick walls, in a village setting only fifteen miles from the coast.
This five-bedroom stone townhouse features a pine staircase and an Inglenuk fireplace, double doors from the lounge give access to an enclosed courtyard.
This five-bedroom, detached home blends traditional and modern design; the sleek kitchen features a gas hob and oven set within an exposed chimney breast.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B or countryside retreat, subject to change of use permissions.
This Grade II-listed three-bedroom home is situated on a private road, just a short walk from the sandy beaches of Frinton-on-Sea.
Less than five miles from Malmesbury, this four-bedroom cottage comes with equestrian facilities and gardens that extend to approximately three acres.
Spanning three storeys, this late-Victorian five-bedroom farmhouse is a spacious family home with a modern interior and B&B potential.
With an original church arch, this triplex one-bedroom church conversion has a light, spacious, feel and comes with a secure off-street parking space.