Public school fees 'risk pricing parents out'
Liz Ford
EducationGuardian.co.uk
Independent schools must cut their fees or face a drop in pupil numbers as parents are priced out of the market, warns a report published today.
Fees have become less affordable relative to average earnings, according to Mtmconsulting's Independent Education Sector Report 2007. Between 2001 and 2006, average school fees rose by 39%, compared with an 18% rise in average earnings. The average pay of managers and professionals - the main customers of private schools - has risen by only 15%.
The report says independent schools are especially vulnerable to downturns in the financial and business markets. More than half of private schools are based in the south-east of England and rely heavily on fees from pupils whose parents work in these sectors.
"If fee rises continue at their current rate, we believe the 14% of independent pupils from atypical households - broadly speaking non-managerial and non-professional households - are at risk of being priced out of the market. This is not to say the market will contract by 14%: some of these pupils receive concessions, and the parents of many will make other financial arrangements and/or sacrifices to continue paying the fees. But, unchecked, the present trend in school fee inflation is likely to lead to at least a 5% fall in pupil numbers," the report says.
"This figure would be higher if there were problems in the economy in general or in London's financial services sector in particular, rendering some of the less wealthy typical buyer groups also at risk."
The number of pupils attending independent schools over the past decade has risen by 5%, although most of the increase occurred in the first five years - since 2001-02, the figure has remained almost static. The gross income from fees has risen exorbitantly since 1996-07, reaching £6.5bn last year, a figure that has grown by 40% over the preceding five years and 39% over the five years before that.
Only a small group of schools will be able to increase future fees by more than the rise in average earnings, the report says. The rest need to abandon some of their "sacred cows", such as pupil/teacher ratios of less than 10 and "luxurious" facilities, or face a drop in pupil numbers.
More schools will join federations to help with costs and to pass their public benefit test - a legal requirement of schools that wish to retain their charitable status, the report says. Some forecasts suggest that one-third of private school pupils will be taught in schools in federated groups over the next decade.
The report also predicts a growth in the number of commercial groups running schools, such as Cognita, whose chairman is the former head of Ofsted Chris Woodhead. These groups, backed by private equity, are expected to educate more than 10% of independent school pupils over the next 10 years.
The report was dismissed by the Independent Schools Council (ISC), which accused it of taking "a melodramatic slant on what is, essentially, old news".
"Affordability is recognised as an issue by ISC schools, which endeavour to keep their fees as low as possible. Most costs are staff costs, which are directly related to rising costs in state-funded schools," said the ISC's chief executive, Jonathan Shephard.
"The fact remains: numbers in the independent sector have risen in 18 of the past 20 years. Costs are an important factor but are not the key or only driver in the choice of independent education. Parents choose independent schools because they provide an outstanding education for children at all levels of ability."