Exclusive: Pensions hike forces private school mergers

Smaller private schools merging in order to survive financial pressures of teacher pay and 'sudden' pensions hike

private schools merging

Smaller independent schools are having to adopt new business plans in order to cope with increased financial pressures caused by rising teacher pension costs and teacher pay rises, Tes can reveal.

While a small number of independent schools have been forced to close in the last year, others are being forced to merge or join larger groups of schools in order to achieve economies of scale, says the Independent Schools Council (ISC).

As well as teacher pay increases, independent schools are having to meet a 43 per cent rise in teacher pension contributions from September this year for which, unlike states schools, they receive no government grant.


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And there could be more pressure around the corner with the Labour Party pledging to end “tax loopholes” which could possibly include an end to business rates relief for schools which have charitable status and the imposition of VAT on school fees. 

ISC chief executive Julie Robinson told Tes that that the pensions increase was “hard to bear” for smaller schools and that there hadn’t been much time for to prepare for the “sudden increase.”

She said increasing teacher salaries were adding “further pressures” on the sector and that “a low number” of smaller independent schools had been forced to close in the past year.

But she added: “Independent schools are remarkably adaptable and there is still a healthy number of pupils.

 “We are seeing changes to business models, for example some schools might merge – you might call that a closure, but I would call it a merger – and some schools might join groups of schools to achieve economies of scale.”

She also said Brexit had not impacted on numbers of pupils from Europe, adding: “You might have thought the impending Brexit would have reduced numbers of European students, but there’s been a slight rise.”

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