Private schools to go bust in the coming recession

[ampletime]

The mother of all recessions is coming in my view. The world economy is pushing towards a large scale and deep debt crises. This follows the explosion of government deficits, borrowing, and leverage in recent decades and now that debt is growing due to high interests. Governments are in eye watering debt, individuals are in debt and so are private schools.
In the last 5 years private schools have been on spending sprees with new builds and new facilities mostly for marketing appeal rather than need. But it’s all been funded on debt. I work for a building service solution company and the number of private schools in the last 5 years have exploded on our books all funded by debt.

I know of one boarding school now in trouble and they have sold off their build and it will be converted to flats.

Be careful folks out there. Times are not as good as these schools portray.

Evidence suggests that people are happier in more equal places where there. Isn't massive wealth. Private healthcare is stupid because the poorest workers can't get better and the US healthcare is vastly more expensive overall than other places. The decline in council housing in this country has caused astronomical rents so people can't afford food and no savings for a house deposit. Privatisation of the water system has led to sewage pumped in our rivers. Private childrens homes have led to a massive decline in levels of care. The privatisation of the probation system means we are all more at risk from criminals. The defacto privatisation of universities has left to a generation with unrepayable debts to their name which leaves them psychologically worse off than their peers in other placescl and again makes saving for a house deposit longer

The defacto privatisation of universities has left to a generation with unrepayable debts to their name

Surely whoever is in charge the universities would have to charge fees since so many more people go to university now?

We left the state sector because it was so poor in our area. I was a school governor but it was hopeless as the other governors were happy with the low achievement status quo.. so now we are paying school fees..
For sure the kids are no smarter.. some families are really loaded and the addition of vat will make no difference but others are busting a gut and making sacrifices to pay school fees.
What has amazed me is that alot of the big name secondary boarding schools are not selective at all and anyone at best academically average can get in.. getting into the grammar school is far more taxing.
They are businesses and the game is bums on seats.
I would suggest private school parents flood their local authorities with school applications and let's see where they will squeeze all these kids in shall we and see whether that improves anything.. I suspect not..
The massive famous schools will tick along just fine bankrolled by the ultra rich, the Russians and the Chinese. As for the squeezed middle we're stuffed. Another small prep school near us went under this year and I am sure we see more close before long..

And just to add those living in areas of London with decent state schools tutor their kids relentlessly and buy the £1M+ houses to be in the catchment area of the outstanding state schools that the average Londoner cannot afford to attend whilst patting themselves on their back about how equal they are..

Maybe London's schools are full but it's not the case in other parts of the country. I'm Hampshire and because of the low birth rates, KS1 is quite empty and many schools are shrinking. You can look up the school place plan for 2020 - 2025. https://democracy.hants.gov.uk/documents/s64498/Appendix%206.pdf

Large surplus and from next year, the year 7 will start to shrink.

It'll be good for the state schools if the independent schools close.

So stacking up rough figures.
Addition of Vat may add up to 2 billion to the government coffers but this would not be ring fenced for education.
All private schools close and the government would have to find in excess of 5 billion a year to educate those transferring into state.
Realistically it will be somewhere in between.
I would think that 30% will be forced into state . This leaves just over 1 billion extra vat paid and the government having to find about 2 billion to fund those transferring.
However you figure it out there will always be a net loss, possibly pushing state schools to further stretch their budgets to accommodate ex private pupils.
This policy suggests labour are motivated by political ideology rather than business sense.
I wonder what else they have in store.

UK University plc is bust. Massive shortfalls... not sure where the extra will come further down the line. One thing's for sure, the current model looks unsustainable.

https://www.ft.com/content/0aca64a4-5ddc-43f8-9bba-fc5d5aa9311d

This policy suggests labour are motivated by political ideology rather than business sense.
I wonder what else they have in store.

Yes it’s definitely ideology. Tutoring is unfair but they’re not doing anything to stop that.
Re what else is in store - maybe restrictions on private healthcare? They could force the private hospitals to become NHS.

I wonder what else they have in store.

This is my concern. Private schools first. What is next on their target list because it’s something not everyone can afford? Private healthcare, university, more luxury care homes, private nurseries? Will everything not under state control be penalised through the tax system?

readyforpumpkins how would it be good for state schools if independent schools schools?

An independent school near us is 30% kids with SEN. How will sending them to the local state school help the local state school? The latter is dire and results are below average for UK. Will the magic money tree pay for additional TAs?

An independent school near us is 30% kids with SEN. How will sending them to the local state school help the local state school?

It won’t but that doesn’t matter so long as it annoys poshos.

Independent schools proportion of “SEN” is totally out of whack, ridiculously high. Another area where money talks.

@ampletime Frankly, that’s mean of you. Some LAs will pay for Dc to attend SEN schools. Also parents will be desperate to do the best they can. I’m rather sick of continual rage against people who choose to spend their money as they see fit. How nasty the left are.

This is admittedly a bit of a tangent, but I was reading about livery companies with interest and their influence on Education. For example, https://www.skinners.org.uk/our-schools/

It really is not about state, private, grammar or anything, but values. I would send my DC to Judd or Skinners in a heart beat and the Labour Party can F off interfering with our choices as regards grammar, church schools or private schools or comps. Choice is good. The non selective state secondary option on that list actually looks really good too.

@Araminta1003 I assume you know that in state education, you express a preference. Even if you express one for a grammar, no 11 plus mark at the required level and it’s no choice for your DC.

There’s an illusion of “choice”. CofE can ask for church attendance. Essentially you can choose them but they exclude many who live nearby for churchgoers further away. It’s a case of belonging to their club. If you don’t, no point “choosing” them. You won’t get in. Many schools, including church, charities and livery companies used their money to set up schools for the poor. Many church schools turn the local poor away. Others set exams. Many former grammars became private schools as did direct grant schools. Undoubtedly some parents get “choice” others get little choice. I’m against what Labour say they will do but don’t let’s pretend all parents get a “choice” when clearly they don’t.

I thing a lot of parents will manage to find the money to continue paying until the end of the primary school stage and then switch to state, or if secondary, to the end of that.

@youngones1 - I'm not so sure...,we might be talking 5-6 years...but also don't forget this will cause schools to close - whether some parents can just hang on or not.

@TizerorFizz - there are several church schools near me and they all differ in their admissions, ranging from you must be baptised within first six months of life and attend church weekly for years - to anyone welcome plus a bit of praying on the side kind of thing. So it is not possible to generalise.

I am most interested now in why certain state schools are high performing and others are not. I used to think it was all about intake, but it is just as much about high expectations from the schools. So I was reading that Mossbourne Academy, high performing very diverse huge Oxbridge feeding state London secondary school, is a Grocers family group school like the private City of London schools. Which I found interesting.

And I am a Labour voter but I won’t succumb to the far left dogma and will fight vehemently for choice and diversity. It seems to be a lot of successful private schools are steeped in deep history and cooperation is much better than destruction. The VAT proposal is entirely disingenuous. I think we should ask why these schools have survived for hundreds of years and what they stand for. Perhaps some have become a little disorientated/misguided but I would much prefer them to share their experience and values with the state sector then unleash further interference/control to central government over education. I don’t want propaganda. This is where I am starting to question whether I am perhaps a liberal after all.

@TizerorFizz I am not on the left. Merely pointing out a fact.
SEN claims are very much left wing ideology. Why has there been an explosion in such numbers?
Funny that when these labelled children go into employment their SEN has “disappeared”.

@ampletime I think children being given labels has exploded. This is because we want Dc to have the best education we can give them. Years ago parents accepted their Dc wouldn’t. When I was at school a tiny number of Dc did get into state special schools but there wasn’t money for SEN private schools. The Warnock report altered SEN thinking and suggested that 20% of pupils might have SEN at any particular time. Around 2% get a “statement”. Sometimes more. Sometimes less. Schools are meant to cope with the others. This has proved to be very challenging. I too have seen disappearing SEN. Totally fine after Cambridge for example!

Various issues are also present in addition to identifying SEN. I actually heard about Silicon Valley Syndrome the other day. I won’t elaborate further but it’s interesting.

@Araminta1003
Schools are partly about who goes to them but much more about who leads and teaches in them. Unfortunately not all heads and teachers are the same calibre. Many good teachers won’t teach in schools where poor behaviour is tolerated. Ethos is down to head and governors and they need to work with parents. Also Mossbourne has 80% ethnic minorities I believe. This possibly points to wanting education more. It’s London so seeing what a good job brings is all around Dc. Wanting to achieve highly is more likely to be present in families.Actively seeking a school where Dc will thrive is possible. Many parents in smaller towns get no choice at all. They cannot get Dc to a better school. I do think all schools can thrive but most that don’t have poor leadership. Then they tolerate poor teaching and poor behaviour from Dc. They spiral downwards. It’s all about high quality leadership and expectations - in my view.

If that not just because people don’t feel comfortable disclosing their SEN when applying for jobs. Employment is miles behind education in understanding and provision.

Re the illusion of choice. I've just gone through trying to pick a state place for DS. Our "local" state schools are, in order of distance, a girls grammar for which he is not eligible, a co-ed grammar and a few reasonable comprehensives for which we are out of catchment as the county/borough line is a few hundred metres to the west of our street, two religious schools requiring church references which we don't have, then a bunch of failing comprehensives with dire outcomes. A "choice" between bad and worse is no choice at all.
What we actually had was a choice between moving house at enormous expense, or private schooling at even more enormous expense.

A friend in a different area says their school have written to them saying they expect significant fee rises after the next election, and that parents can pay now in advance for as many years as they like at current rates to avoid the VAT and fee increases. I'd suspect that will become the norm as the election approaches, and thus the expected money raised will fall far short of what is expected, at least in the first few years.

“A friend in a different area says their school have written to them saying they expect significant fee rises after the next election, and that parents can pay now in advance for as many years as they like at current rates to avoid the VAT and fee increases. I'd suspect that will become the norm as the election approaches, and thus the expected money raised will fall far short of what is expected, at least in the first few years.”

I have some colleagues with kids in private schools who mentioned this too, but I would personally be very scared of doing this when you can currently get 5.5 per cent in a bank account and it is likely an unsecured debt and who knows how the legislation will be drafted. Those schools do not sound well advised to my ear- the cash could be clawed back by the legislation, encouraging this could be misselling etc and I bet it would be coming from management rather than the bursars and if the latter, how are they ringfencing and protecting the cash properly and what about any TPS shortfalls that many private schools have. I am not a tax lawyer now and accountant but HMRC and pensions get first dibs.

@HappilyContentTheseDays you make good points and I agree.

The top girls' boarding are seeing an influx from Asia, Europe, etc. There's a way to game the system to get to the Ivy Leagues etc, you need to be in the top 5% or so, do 3 A levels where one is effectively a language that's mother tongue, although you're not that nationality & it's far from obvious, and you're hugely advantaged. Not confined to languages. Serious thought goes into it all. All perfectly within the 'rules'.

You end up with a smart school name on your CV, a brand, and this is what's important as some see it. You have that in Asia currently. It's a useful, first stepping stone to a stellar career and life. You have a system where there are 30/40 in the class but all the learning goes on with a guru in the enrichment centre after school finishes at lunchtime and is topped up with tuition etc. So it makes sense this model will transfer to the UK if that's your experience.

Then lots of focus on super curricular over the two years and money helps hugely here. That sort of thing. Not to mention most of the Asian pupils having tuition in the holidays to mean they work a year ahead. Residential tutors are common in hols and additionally, tutoring all week very common, online.

Some also do SAT and ACT etc prep from age of 12 or so, weekly. They get fast and quick. A piece of cake when the time comes, they are ahead of the game, coupled with the above.

I've noticed where in past the wealthy internationals wouldn't be at a particular advantage, now the top schools are being increasingly swayed and influenced. I believe there was a radio interview some time back with previous Eton head, Tony Little. He said he would seriously consider one boy over another re: entering Eton, IF academically up to scratch, or close, if a parent offered extra cash, or something like that from memory. His reasoning, as I recall, was that this would help him offer more places to the talented via bursaries etc. He explained he would consider this if a prospective pupil didn't have the requisite smarts to flourish.

He who pays the piper calls the tune. Things are being accommodated that might not have been previously. What I have seen is that local, UK pupils often feel the pressure, they can feel dim when smart, and the teachers are not always aware that new content will be effectively revision for some and new material for others. This can lead to a troubling toxic competitive atmosphere. I think this is growing. Not everyone will be robust enough to be equipped to cope with a dog-eat-dog environment.

I think international pupils have to pay double at Millfield and Oundle have taken donations from parents to pay for new facilities. Whilst objectively a lot and out of the reach of most, 40k PA boarding school fees are just not enough to run the schools any longer IMO. The model doesn't work in many cases for lots of reasons.

Sorry, important correction re: Eton head above: He explained he would NOT consider this if a prospective pupil didn't have the requisite smarts to flourish.