Private schools' risk of closing in next recession?

[sunnydaytoday0]

I read a comment on a facebook group by someone who said they had recently been told that the fee-paying school they worked at would be closing. I don't know where this was but I've no reason to think it's not true.

Do you think that given it's likely we will be heading into another recession within the next year that there could be a repeat of what happened in the the financial crash over 10 years ago, when there was a raft of schools that closed, or ended up merging or changing into free schools? I imagine there must be at least some schools that just about managed financially through the pandemic but now will not cope with even a relatively small drop in numbers, especially with energy bills rocketing and in some cases the continuing issues with the Teachers' pension scheme?

Small ones perhaps. The big and sought after one ones, no - they have waiting lists and multiple applicants for chance vacancies

Definitely a worry for smaller schools, of which there are many more than the larger schools with waiting lists.

I also think that fees will need to increase significantly to cover increased utility bills and higher wages for staff to cover inflationary rises.

Ours is a small prep with a big waiting list and very healthy finances, but I still looked through the previous 5 years accounts before taking up the place, just to be sure.
You should be able to do the same, as any school should file accounts with companies house. Then you can decide if you're ok to commit.

It will depend on income of parents and how they are paying the fees. If from income, and they are just about managing the fees, then it’s an issue. Some schools have 50% of pupils like this. Others very few. If there’s lots of money in the family and parents are wealthy and financially bomb proof, then it’s not an issue for schools with these parents and families. I do believe there will be a recession and it will squeeze some schools out because their fees will need to rise beyond what parents can afford.

I think it’s inevitable that there will be closures. Feel for children who will be disrupted.

Yes. Some parents won't afford it anymore. Some building are very expensive to run. Staff demanding more money to stay etc

I think we’ll see lots more mergers as well as single sex schools going coed, as well as lots more closures. However I think the most successful schools will benefit and grow as they’ll be seen as a more secure choice and the very wealthy won’t be affected by the recession in the same way.

Those parents who just scrape the fees are going to struggle now.

I think smaller schools will close. I’ve already seen some already offering discounted fees to get bums on seats.

The state system though is under unbelievable pressure financially which will impact the quality of the provision.

I was on the fence originally about paying for private school as we have outstanding state schools in our area but I’m more convinced now than ever regarding the additional value add given the headwinds.

@TattyS
Im not sure going co Ed always works. You need to spend a hell of a lot of money to provide sports space and additional facilities. Can work for big name schools but others who have parents not earning a lot, they cannot afford any private school in future. Mergers are more sensible.

@TizerorFizz it definitely doesn’t always work but I think it’ll be desperation for a lot of schools if they start losing pupil numbers.

I think the lower middle class parents that stretched themselves to pay for private education wil probably have to leave. However, a lot of doctors, people with family wealth and international students will still be able to pay as they won't be as affected by a recession.
I can see bigger class sizes coming and more schools leaving the teachers pension scheme.

On the other hand, I thought this would happen with covid when everything was doom and gloom and the school closed and we had to give refunds to parents. But it actually had the opposite effect - more parents signed up because the state offering of home learning was so poor and the offering of private education became more attractive. So who knows! The state system is appalling at the minute, a lot of teachers leaving , behaviour getting worse, no extra funding, any decent state school is oversubscribed. So I'm not sure that many parents will leave private unless they absolutely had too.

@TattyS
Schools often find it difficult to recruit when they go co Ed though. They look and feel like boys schools (in particular). We looked around several schools that had “let in” girls and the girls were a bit second class. No amazing cricket pitches and pavilion converted for them.

I don’t think teachers in private schools will have a significant pay rise unless state school teachers do.
I thought numbers applying to private had increased? Whilst the state sector remains poorly funded I think people will prioritise private school fees above other things.

I don’t know, they are all absolutely stuffed full here, I think people moved to private during covid as their online teaching was better than the local offering. I was expecting them to be quieter, with people moving out from cities but that hasn’t happened.

Stuffed full here too. DS's school has 60+ new joiners across the year groups this year apparently, and lots of the senior schools have 4+ applicants to every place. Actually worried about getting him into senior at this point. Can't see any closing unless they are very small / have crap facilities and no money in the bank.

Couldn't agree more. This is what I've found too.

In my experience, many small private schools have closed due to bad management and poor investment rather than families being unable to pay the fees.

Closure of private schools would be a blessing in some respects, if you look at Norway they don't have private schools so those with money who would be tempted/use private education in the UK happily pay towards the state education system to ensure every child has a good education.

One of my friends is a teacher in a top private school and since the pandemic, they've had a steady stream (probably 50 students per annum) that have left the school and instead opted to privately tutor their kids, either full time or enrol them in a local non-fee paying school and "top up" with really good private tutors.
It's the route my DH's best friend has taken with his kids (local comp, topped up with private tutors) and I've got to say his kids have had a much better education than I had at a private school and for a third of the cost! The company he's registered his kids with are phenomenal and are basically like an online top private school that people would normally pay thousands to attend. I think this is the route I see a lot of families taking.

@Shtfday

They have private schools in Norway. The numbers of kids in the private sector have grown significantly in the last 10 years actually. Almost all countries have a private system and plenty of first world countries have more kids in them than the UK (eg the US, Australia, France, Germany), often because they get much more government funding than here.

Anyway, some small and/or struggling schools will close. And then when the recession is over new ones will open and surviving ones will expand. It won’t make any difference long term.

@Lovetogarden2022 We do this too. The 'State Plus' model. Husband and I both went to top boarding schools but our children are at our local school and then we supplement with a ton of extra curricular which is really tailored and we use top tutors (many moonlighting from the local privates.) I think we probably spend about half of what we would on fees but it is very tailored to our three children and their interests / strengths and none gets wasted on facilities our children don't use. It. also means all of the family including us get to go on the 'school trip' ski holidays and visits to Rome etc. We really rate it as a way of educating but you need to have the time to organise it all, I work part time which helps.

I can't see them unaffected. Increased bills & salaries will mean big fee increases.

Not everyone sends their kids to private school purely for academic achievement though. Small class sizes, facilities, sports and music opportunities, bording, etc. Private schools offer parents choice over their childs whole educational experience not just a good grade at the end. I think there's a market for more non selective private schools, not less.

@dipdips exactly! The one my DH's friend uses plans all their extra curricular too and recommends which things they should do to get into top universities (something my private school never did and resulted in a lot of problems for some of my school friends!)
Ie, heavily recommending duke of Edinburgh if applying to certain universities, encouraging them to play sport for their county, joining debating or theatre societies etc - things that were never even suggested as options for me!
And if there's ever any space on your Rome and ski trips, let me know