Whitehall “braced for private schools collapse” 4

[ICouldBeVioletSky]

Continuing the discussion about the impact of VAT on independent schools…

Carrying over from the previous thread:

ICouldBeVioletSky · Today 10:24
I’ve taken the time to write two detailed posts explaining why this point is completely ill-conceived. They were published last night and this morning, so it’s not far for your to scroll back.
Please could you point out where in these posts I’ve demonstrated that my “emotion(s)” are “clouding rational thought”?
And please also provide an explanation as to how the points I made are factually incorrect.
Very much looking forward to reading your well-argued, thoughtful and detailed response.

KendricksGin: You've obviously got far more time to waste on this than I have. Even better, let's just wait and see what happens. Just because some schools that were teetering on the edge of viability have closed doesn't mean that viable ones will. Very basic economics.

And yet @KendricksGin you’ve been able to post six times on the thread since mid-morning, so it seems you’ve had more time to spend/waste on this than you initially feared…. 🤔

Thank you for the new thread ICouldBeVioletSky

for the future historians the previous thread was: https://www.mumsnet.com/talk/education/5280646-whitehall-braced-for-private-schools-collapse-3?page=1

The Lords seem to have helped to slow the financial pressure (thank you!!) for a year maybe (?). But someone’s going to have to translate this for me in practical terms please, how it might affect school closures?

The parents level view is already very much that VAT +NI + business rates increase is definitely happening, so the damage has probable already been done to many private schools in terms of decimating their new enrollment, decimating their bursary availability, settled kids having to leave, private schools having to shut down, and then making good state comprehensives and grammars even more socially exclusive.

https://www.tes.com/magazine/news/general/lords-vote-against-ending-tax-relief-for-private-schools

Oh FYI for all those that say it is only "some" schools closing, this is an example of the fiscal impact of each school that closes:

90 employees, almost £3m of payroll costs.
So say £1m loss of PAYE to exchequer, + rates + spending in local economy

90 employees now redundant etc.

If you times that by the 23 already announced closures you are looking at billions of lost revenue in addition to everything else

The other thing on the number of independent schools closing is that historically they were balanced by new independent schools opening.
2025 so far has had 23 closures and 0 openings to my knowledge - does anyone know? When you look at the numbers together it gives a better idea of the impact so far.

Also schools that are moving to Co-ed are on the rise, reducing choice for parents wanting a single-sex education. Indicative of previously successful schools struggling for numbers.

The other thing is that the majority of new indy schools opening, the majority are specialist SEN schools.

Surely some of the impact on numbers has to be a result of falling birth rates?

"Education Policy Institute analysis suggests a 4.5 per cent fall in primary pupil numbers nationally between 2022-23 and 2027-28. London is predicted to face the biggest drop of 7.8 per cent, but the North East is close behind at 7.3 per cent."

I work in education and the declining numbers are quite shocking tbh.

Returning to the idea of 'consolidation in the sector' - I think this can be an overrated concept generally in business but here, talking about education, seems bonkers. Maybe even more bonkers in a stagnant economy with low economic growth as it will inevitably lead to the loss of jobs. It also removes choice in the private sector which is obviously one of the things people are looking for if they decide state is not for them.

Falling birth rates are going to hit the prep sector very hard. For the prep sector, I think it's a perfect storm: large increases in costs, pressure on parents to save their money to use for secondary fees, falling birth rates, and therefore more availability of places in the state sector. If, this year, a prep can only fill half its reception places, it may push the whole school into the red even if the other year groups had higher numbers. I'll be surprised if there aren't dozens more preps announcing closure by end of April.

Secondaries are shielded from the demographic changes for the moment because the largest cohorts are currently in Y6 - Y8 so will still be feeding through the secondary years for some time to come. They will, of course, eventually have to deal with it.

@Lebr1 yes you are correct about secondaries. I agree with you re prep, even without VAT general fee increases, mortgage increases etc must be putting pressure on household budgets. I have seen the applicant numbers for all the primaries in my borough & was absolutely shocked. I knew they were reducing (more acute in London) but so many were undersubscribed.

I’ve read this is really localised though for various reasons as per link. I live in a city at the top of the housing building charts, they are building and opening new primary schools to meet demand. 3 primary, 1 special/SEN and 2 senior in the last 18 months. www.bbc.co.uk/news/articles/ced3e219lxzo.amp

@IVTT well birth rates have dropped as a whole but obviously there is variation. Even though the problem is as I said more acute in London some outer boroughs are bucking the trend and are attracting more families than before.

And as pp said there is an increased demand for SEN places in both sectors.

That is not the point under discussion though. How hard is it to understand that you can't extrapolate what has happened already into what will happen in the future? It is the weak schools that are closing currently and that closure rate is very likely to tail off as stronger ones are left.

Took about five minutes. Others seem to spend half their lives on here repeating the same things over and over.

How is consolidation bonkers? Some schools will close and there will be a smaller number of players so consolidation. Also some schools may take over others which would result in further consolidation. It is the same principle as would apply in any business sector undergoing a considerable change in its operating conditions.

Still waiting @KendricksGin….

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Not sure what you are waiting for. Godot?

Since your scrolling finger is seemingly out of action I’m waiting for you to justify your earlier post.

In particular: “Please could you point out where in these posts I’ve demonstrated that my “emotion(s)” are “clouding rational thought”?
And please also provide an explanation as to how the points I made [refuting the suggestion that the only schools that are shutting are those already doomed to fail] are factually incorrect.”

All you’ve done so far is just chuck around meaningless phrases such as “Very basic economics”.

It might lead people to conclude it’s because none of your arguments has any legs - that can’t be the case….can it?

Conclude what you like and others are very free to do the same. I thought I had made it clear in my earlier post that I neither have the time, interest nor inclination to trawl through your personal posting history! And I thought it was also clear that my comments regarding emotions and rational thought were not directed solely at your posts - there are other posters you know. If "legs" means ranting and repeating ad infinitum, then maybe my posts don't have legs but plenty of others on here certainly do.

“How is consolidation bonkers? Some schools will close and there will be a smaller number of players so consolidation. Also some schools may take over others which would result in further consolidation.”

In the state sector too? So those who are “outstanding” with excellent results and a good reputation, they will still attract candidates and richer parents who support the school. And those who cannot, they will close? The state won’t support communities either. Lump it everyone.
So do state schools now have to go out and market for pupils too somehow?!

“So do state schools now have to go out and market for pupils too somehow?!“

Don't worry @Araminta1003, Bridget has this all in hand - she’s already set aside £90m for the marketing campaign! That woman really knows how to prioritise.

I saw a brilliant clip of her grinning like a maniac through a recent speech and someone saying she must have had acting lessons. It was so creepy and weird and completely false looking. She was doing it in completely inappropriate places. The whole thing was surreal

I was talking about the private sector in terms of consolidation and how free market forces tend to pan out.

The state sector is obviously a very different animal as it is subject to government intervention and public purse considerations.

@KendricksGin - the state sector isn’t different as schools are funded per pupil and in a falling birthdate, schools locally compete with each other over pupils. And to attract students they have to be desirable as well.