Long term effect of coronavirus crisis on private school sector

[suk44]

I was reading an article in the Guardian today about the pressure some independent schools are under in the current situation, and how the ongoing uncertainty could hit the viability of some of them. Regardless of whether someone would be happy or unhappy with it, i''m thinking it is quite likely the sector is heading for a hugely difficult couple of years (like many other sectors of course) and especially since this isn't an issue that will be fully resolved anytime soon.

I understand some private schools were hanging on by their fingernails financially even before this crisis due to the huge increase in pension contributions, and now you have to add in the potential pressure from some parents for partially refunded fees for next term, international boarders having to fly home, and predictions of a deep recession (and therefore fewer that could afford to send their children to fee paying schools).

I'm wondering if we will end up seeing a greater number of such schools merging, closing or converting to state schools that we saw even after the 2008 recession, affecting even some big names?

I don't want to minimise the potential impact on schools, but I'm sceptical about some of this. I would be amazed if more than a tiny minority of parents choose to home educate long term after this. The only parents I know who are finding home schooling pretty straightforward are the ones where the school is providing a huge amount of structure and support. Things which would disappear if parents actually decided to homeschool - quite apart from the social aspect.

It's only anecdotal, but among people I've spoken to, if anything the feeling of 'is it really worth continuing to pay my fees' is getting less, not more. Parents are realising that although they might be getting less for their money than they do when the schools are open, they are (in many cases) getting a lot more than they would in another setting. Not in every case, certainly - some state schools are doing brilliantly, some privates are doing poorly. But the state schools around here which are doing brilliantly - you wouldn't have a hope in hell of getting an in year place at any of them.

It's made a massive point to us that we made the wrong decision in sending DS1 state (grammar). There has been no provision at all and he's in year 9, whereas my friends in indie have had full teaching.

I think the issue isn't that private schools aren't offering a good education at the moment - it's that, no matter how brilliant the education they offer, no matter how good they might be, not as many people will ultimately be able to afford the fees going forward, either now or over the next year when the economy tips into a deep recession.

When a representative of one of the independent school associations themselves is saying he thinks hundreds of schools could well close by Christmas (in recent TES article), it shows just how bad the situation is going to be for the sector in the near future.

And although it currently is and will continue to be the very small schools that close first, unfortunately I would not be at all surprised if within the next 12 months at least one relatively big and well known secondary school goes under.

I agree suk44. I don't know of any yet whom are struggling, but I have heard of one well known London secondary making offers way down the wait list this year

The situation isn’t clear yet and I assume none of us are trawling through the accounts of every school which have been lodged at the Charities Commission. However I think there are schools in a poor financial position and they may well find that too many of their parents either withdraw or end up as bad debts. This will force closure. I too feel lots of these small schools, or poorly run ones, are teetering on the brink anyway. A relatively small number of vacancies and non receipt of fees might well see their demise.

The state may step in for some private schools, especially if there is local over-demand for school places. But, it won’t be to bail out the schools but rather to convert them to state schools. I think that happened to a private school in Liverpool (though the school chose that route)?

My dc are at a small independent. I hope they remain viable though if they go bust then I hope that happens soon as we are starting GCSE courses. I am sure if they do go bust then the other private schools in the area will be able to pick up all the kids (they will lose children too so will need them) but I wouldn’t want to have to switch schools half-way through GCSEs. Not sure if our local state school would have room.

I don't think it will be a matter of 'is it worth it' but more of affordability. Lots of parents in the independent sector are jot independently wealthy and jobs might be lost/at risk. This is a very real prospect for many families across the country.

We are certainly in that category. I won't be pulling my children out immediately but our jobs are not secure and I am now thinking state sixth form and plan bs for others too.

I am sure I am not on my own.

Ps I agree that I wouldn't pull them out in the middle of gcse's and if I can help it on thr middle of the year. It will be a planned move..

Just to mention that state schools will also have to pay the increased pension costs (in a year I think) but won't have the option of withdrawing from TPS - as far as I know. In some ways it may be good that independents had to make that adjustment pre-Covid.

If I thought a senior school might go bankrupt I would certainly get as much financial info right now on the school. Schools close and they don’t keep them open so all pupils finish y11 or y13. They close. You find somewhere else. Repeat a year if necessary. I wouldn’t be reticent about getting info and making an early decision.

State schools are getting a grant to help them cover the cost of TPS, I believe, though doubtless it won't cover the whole cost. DS's school has decided to continue with TPS - whether that decision will still be viable now, who knows?

The state schools only got one year of cover for the TPS changes. There will be another TPS review in 2022(?)

Some independents are already out of TPS and if more follow suit that will create further issues in the next review.

And now Ashdown House, which is really not in the category of schools you would have predicted as being particularly vulnerable.

schoolsweek.co.uk/boris-johnsons-former-prep-school-closes-due-to-coronavirus-impact/

Surprised at that. Although I haven’t looked at their accounts.

I have now looked at the accounts for the Cothill Trust. The attached para is ominous. I would worry about their other schools.

Also, turning a £1.7mil surplus into a £1.5 mil deficit is going it some. The para about financial reserves is also interesting - basically there aren't any, and they are borrowing to fund loans.

Any school that normally has overseas boarders is going to be in trouble unless they have big reserves.

They say they have 2/3 of their children not starting. That would not represent just overseas children one would think. But it’s very shaky and I suspect there are many more like it.

Now York Minster school.

If preps school can’t or won’t open up fully in sep (reading other thread about disruption into nov) not sure I can keep my two children under 7 at our prep and will have to pay a nanny to care for them instead. There must be tonnes of people in similar shoes that require both parents to work to pay fees. Unless private schools can act independently to state schools (insurance cover being one concern) the future is worrying.

Private schools can act independently. That’s why they are called independent schools. They have legal obligations but opening post Covid probably isn’t one of them. Like a business, they can be advised but not told. Unless the law changes of course.

Social distancing 'impossible' in boarding schools
www.tes.com/news/coronavirus-social-distancing-impossible-boarding-schools

Protective measures against coronavirus transmission will be 'very difficult' in boarding schools, says union.

Teachers' leaders have said it will be "nigh impossible" for social distancing to be observed within boarding schools when they reopen.

Andrew Morris, assistant general secretary of the NEU teaching union, said that social distancing in boarding schools will be "very difficult".

"Boarding schools are worried about social distancing. As hard as it is in an ordinary school, it is nigh impossible in an independent boarding school which might have four pupils aged 7 in a bedroom spending long periods of time together socialising and relaxing – socially distancing is going to be very difficult," he said.

Mr Morris also said the economic future of boarding schools was uncertain, as it was unclear whether the 60,000 overseas pupils in the sector would return.

"Clearly, schools will have availed themselves of the job protection scheme which is a major mitigation against some of the losses. The worry is more the long-term economic impact and the issue of 60,000 overseas pupils. So much is unknown, given that everything’s so fast-moving," he said.

Previously, Tes reported that some boarding schools reliant on overseas challenges could face particular difficulties.

Can anyone point me in the right direction to find out about the financial situation of our independent school.

It's been absolutely amazing during all of this - full timetable with some practical adjustments. Offering all manner of additional things to the kids. As well as fully 'live' classes there's been a lot of pastoral care & spirts/challenges encourages & things like yoga & 'stay fit'

They've updated us at every stage. Discount for next term 15% non boarder (us)& 25% boarding. Quite detailed about how they're making savings & lots of community Support/donations/assistance.

Dc14 loves her school (Y9) and has loved the additional socialising that It being predominantly boarding provides (but lives being non boarding) but she has really enjoyed the 'New way'.

She's fabulous at just getting on with it & doing prep etc, but she would hate to be alone in the house all day, every day so we'd need to make WFH arrangements to be home most of the time.

They said ages ago that they wouldn't be physically back until Sept. & we were happy with that (totally expected it as a large percentage are overseas boarders) but now I'm beginning to wonder what's going to happen.

As we never intended to board we didn't look at many of the boarding 'houses' but the ones we looked at were all 2 to a room (not sure if they have any larger ones) so I presume they'll only be able to have 50% if the boarders back? & whether that many will want to come back? Who knows?!

Then we have friends at her previous independent (non boarding) but almost all busses in.

Sorry, lots of thinking out loud as I just assumed she'd go back at some stage (even maybe only part time) and hadn't considered it might have to close. Stupid really, but it's an institution & seems So 'well healed' - I guess I just assumed it would be ok?! If not some of the past pupils would be willing to throw cash at it, but 🤷🏻‍♀️

First find out the legal name of the entity and also any trust or company it is part of. You may need to check both the school and the wider organisation. You many need to do some detective work to work this out but it is usually on the website somewhere.

Charity Commission. - where if a charity it will file accounts and a report
, problem is these are old news

Companies House - look on the filings tab to get the info for the annual report - again this is often old news, a regular negative figure and few reserves should ring alarm bells. Look at the going concern statement. Look for any old strike off notices, they may just be an innocent late filing of the accounts

The Gazette - insolvency notices end up here

CE File of the High Court - you need to register and credit 15 mins of search time at a small cost but you can search for winding up orders- after a few days these usually appear in The Gazette

Mine wanted to act 'independently' and allow other years to go back in but had their hands tied by governmental advice which affected their insurance cover.