Independent schools face up to a challenging 2018

CREDIT: This story was first seen in the insider.co.uk

Competition among Scotland’s top private schools is ‘increasing’ as pupil numbers fail to rise while the question of losing charitable relief still looms large, insider.co.uk reports.

On the face of it, it looks like a positive start to 2018 for Scottish private schools with recent reports showing exam pass rates bouncing back after a 2016 dip.

Admittedly it is a small rise, jumping from 92.3% to 92.6% in 2017, but those topping the league tables show particular promise – breaking its own record, Albyn School in the leafy west end of Aberdeen saw A-C Higher pass rates of 98.5% whilst, at 98.1%, The Mary Erskine School and George Heriot’s School, both in Edinburgh, were not far behind.

Meanwhile, The Glasgow Academy took fourth place with a substantially above average rate of 97.1%.

Looking a little deeper into the sector, however, it is not all so rosy.

“The current market for international schools is challenging,” says Dave Roberts, director and independent schools sector specialist at accountants Chiene+Tait.

“Pupil numbers are holding up but not increasing. Due to this, there’s generally capacity for each school to take in more pupils and so the competition between schools is increasing. And more students appear to be transferring between schools than previously.

“This is partly to do with price, but mainly to do with the courses offered, the exam results achieved and the extra-curricular activities provided. There’s also an increasing demand for bursaries, with some parents applying to more than one school to see what bursaries they can get from each school.”

Some schools are bucking the trend with Kelvinside Academy in Glasgow boasting a higher roll than ever before but many are experiencing the challenging market Roberts refers to.

“Independent schools generally experience the lag effect of any upturn or downturn in the economy,” says Dr Ian Long, headmaster at Albyn School in Aberdeen. “Schools, especially junior schools, are subject to very localised changes in circumstances so the changes in the national economy are less important than what is happening in the city region.

“Albyn was still growing in 2015 but its school roll fell in 2016 and 2017, principally as a result of parents being made redundant, experiencing a fall in family income or being transferred out of area.

“As oil and gas companies reduced headcount and as the panoply of financial services dependent to them also reduced costs we received increased numbers of letters from parents giving notice.”

Fluctuating pupil numbers aside, the highest profile challenge at present is that of a strong Scottish government suggestion that independent schools should lose charitable relief on business rates, potentially costing the educators of hundreds of thousands of pounds.

Currently, due to their charity status, independent schools get an 80% mandatory relief on business rates with an optional 20 per cent at the local authority’s discretion. But the Barclay Review of Business Rates, which was commissioned to explore how the system could be improved, made the bold statement that granting private schools this tax break is unfair on their state counterparts – and removing it could bring in an extra £5m each year for the government.

For Elaine Logan, warden at Glenalmond College in Perth, this is not good news: “In 34 years in the profession, the Barclay Review is the most threatening initiative directly attempting to jeopardise the independent sector’s operations. I do find it hard to reconcile how a political agenda can dominate the educational environment.”

The Scottish Council of Independent Schools (SCIS) led the public response, saying the change would leave Scottish private education at a global competitive disadvantage. The charitable body also said the reform would severely impact pupils, staff, the financial support independent schools offer to families unable to afford their fees – and potentially the taxpayer.

Kelvinside Academy rector Ian Munro argues that, unlike any other sector or group of registered charities, independent schools have the evidence of extensive testing to support their case for partial relief: “Scottish independent schools recently completed a charitable status review and test carried out by the Office of the Scottish Charity Regulator. As such, the charitable status of Scottish independent schools has been rigorously tested and identified by an independent body.”

John Edward, director at SCIS, adds: “In 2005, the Scottish Parliament voted 98 to zero to introduce a public benefit test, for which the schools were the primary focus. Over 10 years, they worked in good faith to meet that test, and means-tested fee assistance to widen access has risen by at least £20m.

“Sport, music, arts, academic and other facilities are provided at noncommercial rates (or none) to local teams, groups and pupils – including shared subject teaching and careers events. But the Barclay Review has suggested removing the partial rates relief that makes all that possible, undoing the work that the Parliament and the sector have achieved, for a sum several times smaller than the assistance that has been raised.”

On that financial note, if independent schools no longer existed, a lot of extra pupils would have to be educated at the government’s expense – and there are currently not enough places available in the state sector, according to Roberts. He says: “The saving to the government is substantially greater than the rates relief given: costs to the government would include building new schools to cope, employing additional teachers, procuring additional resources, and all the other costs.”

So, if this dramatic reform is approved, could it trigger a change in the independent school business model? Simon Johnson, headmaster at Wellington School in Ayr, suggests it may: “It will reopen the debate about charitable status and some schools may choose to follow a more commercial path. The sector is adaptable, of course, as anybody with a long memory will know, but the result of rising costs will be greater exclusivity.”

Of course, this political hot potato isn’t the only topical challenge and, as for many organisations, the imminent arrival of the EU’s General Data Protection Regulation (GDPR) is proving tricky – and potentially costly. Gareth McKnight, managing director at employment law company Navigator, which represents a large number of Scottish independent schools, says: “It is probably the case that issues such as GDPR would have been unwelcome at any time but in the current climate, such additional compliance burdens are particularly unwelcome. So much so that a number of schools are considering the creation of the post of compliance officer, manager or even director as is the case with some high profile independent schools south of the border.”

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Less time-specific and more of a notorious continuing debate is that on fees, which vary widely. Day rates range from less than £3,000 to a costly £26,000 per annum, whilst boarding school bills can be as high as £32,000 each year. But Roberts cleverly puts these hefty figures into perspective: “The fees are structured to support the pupils. Although schools make surpluses, these surpluses can’t be extracted. The schools reinvest the surpluses in the facilities to improve the educational experiences of the pupils.

“In addition, a significant number of pupils educated in the independent sector go on to become high achievers, often meaning they earn more than their state-educated counterparts. Over a few years the increased salary can more than outweigh the cost of the education. This also benefits the government with increased tax revenue.”

Nevertheless, fees do still increase annually and one in four pupils received financial assistance in Scotland during the period of 2016 to 2017. In fact, independent schools are said to spend almost £50m each year in supporting parents with fees.

Why such a significant support requirement? According to Roberts, heightened inflation – partly due to the fall in the pound – means big cost pressures for schools and higher fee increases than they would like. With salary rises generally not keeping up with inflation, this means parents are increasingly stretched.

But UK inflation rates are not bad news all round. In fact, they have helped to reduce the cost for international boarding students, which now account for around a third of all boarding pupils, and the fall in the pound is said to have been responsible for numbers of overseas students steadily increasing.

At SCIS, Edward says: “Schools have to work hard to encourage overseas applications due to increased competition from other markets and political uncertainty at home but the lure of Scotland as a safe, secure and friendly destination remains strong.”

For Kelvinside Academy, the hard work is certainly paying off as its partnership with NuVu, the world-leading innovation school, has seen it attract more international interest than ever before.

Munro says: “We welcome experts from Harvard, Massachusetts Institute of Technology and other top educational institutions in the United States in the summer to facilitate a unique education experience, which allows pupils to spend their days like engineers, creating and testing solutions to every-day problems.”

Likewise, Albyn School – where international students make up around 10 per cent of the school roll – has seen a boost in overseas enquiries after reintroducing boarding in 2016.

The school has also cleverly co-ordinated its promotional materials for overseas demand: “All school marketing documentation is translated into Mandarin and we have a Mandarin section on our website. It is our aim to have promotional documentation and videos translated into other languages,” says Long.

With a potential influx of new international students – and the much-publicised public school teacher recruitment struggles – can staff levels cope? Yes, according to Roberts – the independent sector, which employs more than 7,000 teaching and support staff, amounting to one teacher for every eight pupils, has less of a struggle to recruit than state schools due to attractive packages that draw in former public school teachers.

According to SCIS, the state-of-the-art facilities and extra-curricular activities are a big pull: “In many cases there will be more sports and arts available with more and better equipment and grounds,” says Edward. “This means gaining greater access to teaching extra activities.”

Unfortunately, stress-free resourcing isn’t the case countrywide: “Attracting high quality staff has always been difficult, although that has as much been due to the school’s geography rather than changing economic circumstances,” explains Long, up in Aberdeen.

“Until recently house prices have been high and it is difficult to attract staff from the central belt when their money doesn’t really go any further than it would in their current location. In the lower school we go through feast and famine. I had as many as 70 applications for two positions a few years ago and other times where we have had one application for one post. One unexpected feature at present is that some former pupils are now filling posts. This is a blessing because they understand the culture and work ethic of the school even before they step over the threshold.”

So, what’s new, next and innovative in the sector? Perhaps the promotion of apprenticeships, as seen in the public school sphere?

Chiene + Tait’s Roberts doesn’t think so – “independent schooling is typically associated with professional aspirations, which match better with a university route than an apprenticeship route” – but there has been some movement on the topic, courtesy of Charlotte Avery, president of the UK-wide Girls’ School Association.

A few months ago she challenged her peers to embrace apprenticeships as a result of the ‘leaky pipeline’ of women moving into leadership roles: “Ask yourselves how ‘50 per cent of our students go on to apprenticeships’ might sound in your school’s marketing materials, after generations of saying, ‘100 per cent go on to university’.”

Meanwhile, Kelvinside Academy, which recently won the race to become the first British secondary to be named as a digital school by Digital School Awards, is passionate about trialling new concepts with a view to a Scotland-wide roll-out.

Munro says: “Outdoor learning is one of our core philosophies. We are opening a wilderness campus in the Cairngorm National Park and recently opened a new nursery set in woodland near Milngavie. Learning is not one-size-fits-all and for some, experiences outside the classroom can provide better outcomes than when confined to a classroom.”

On that note, independent schools must behave similarly – learning how to handle the bumps in the road whilst growing stronger and capitalising on the positives. Like any other sector, they will embark on 2018 with a mix of challenges and opportunities. But no matter how tough it gets – due to business rate debates, inflation-triggered fee rises, compliance-related obstacles or increased competition – there is no denying the massive impact independent schools continue to have on the Scottish economy; directly contributing £301m and supporting more than 10,000 jobs.

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