Private school fees have grown faster than parents’ ability to pay them, according to a prominent businessman and chair of governors at a leading girls’ school.
Christopher Jonas warned delegates at the Independent Schools Council’s annual conference this week that school fees over the last decade have increased by 20 per cent more than salaries and bonuses.
This could prove problematic as City bonuses are cut and unemployment hits the middle classes.
He added that personal savings have shrunk from approximately 12 per cent of income to roughly zero. Meanwhile, taxes have risen, and interest rates are expected to follow.
“The easy thing to say is that we’ve always ridden these storms out, and there’s always underlying demand,” Mr Jonas said. “But we must be aware that these structural changes have taken place.
“In setting fees, people must be aware that some of the issues we saw in the past are now behind us. It’s likely that demand for a commodity such as ours is going to be falling.”
Mr Jonas has served as a director for British Railways, Canary Wharf and the Port of London Authority, as well as senior adviser for financial firm Lazard. He is also chairman of governors for Pounds 9,400-a-term Roedean School, near Brighton.
He recommended several strategies for survival. Seventy per cent of ISC schools have fewer than 450 pupils, so he suggested that consolidation and merger might be viable options.
“By making a school larger, you save on overheads,” he said. “If there are difficulties in pupils’ ability to pay, then it’s in our interest to increase the efficiency with which schools are run.”
There may also be cause to rethink staffing structures: “Are staff giving us value for money? We need to look at the quality and value of the staff we’re employing.”
And heads and governors should plan realistically. “There’s been some talk that the laws of economics do not apply completely and utterly to every private school,” he said. “In my experience, they do.
“Every organisation has to know how much cash it has in the tin, on the mantelpiece, on a Friday night. It’s absolutely imperative to insist on having a surplus every single year. Can you actually meet your financial obligations?”
David Lyscom, chief executive of the ISC, insisted that schools would not charge more than parents could afford to pay.
But Vicky Tuck, head of Cheltenham Ladies’ College, questioned the role of independent schools.
“Perhaps we’re like the banks: so precious to the UK economy that, if we fell into trouble, we might be rescued by the state,” she said. “Can they afford to educate all the children that we’re educating, without asking for help from the tax payer?”
ACTIVITIES MAKE GRADE
The more extra-curricular activities pupils have to choose from, the better they perform in their GCSEs.
A survey of 508 independent schools revealed that the more extra-curricular activities their school offered, the more likely pupils were to achieve grade B or above at GCSE.
At schools offering more than 30 out-of-school options, 100 per cent of pupils attained a grade B or above. But at those offering fewer than 20 activities, only 10 per cent reached a similar level, the Independent Schools Council survey showed. The difference was particularly marked for boys.
