Page 10 - Independent Schools Magazine
P. 10

How low can fees go?
Henry Briggs, senior partner at the Birmingham of ce of chartered accountants Haines Watts, is a former school governor with expertise in advising and supporting both independent and state schools. Here, he comments on recent proposals for a low fee school model.
Professor James Tooley of Durham University’s Education department has recently announced plans for a proposed pioneering low fees private school in the city.
This will strike a chord with many cash strapped parents who are
keen for their children to have the bene t of a private education,
but cannot meet the level of fees charged by most private schools
in the UK. The demand for such a scheme is undoubtedly there, which makes it worth further careful examination.
His initial eye-catching claim is that it can be delivered for a level of fees that is below the £3,000 per annum mark. How can this be done?
His proposed Durham school will offer a ‘no frills’ education, without costly facilities or extra curricula add-ons. The premises will be a disused Church. Teaching costs will be kept low, but staff will still be offered a full teachers’ pension.
It is the case that a school seeking to keep costs to a minimum is more likely to do this from a fresh start and zero based budgeting, only taking on costs it needs, rather than inheriting buildings and staff that come with historical costs attached. All Bursars know
that reducing existing teaching costs is painful, time-lagged and incurs its own additional ‘one off’ restructuring costs.
The use of redundant churches – and sadly there are many across the country – is initially appealing. But do they really lend themselves to being school premises? They are centred on a large open space, are historic buildings with inevitable planning restrictions; dif cult to adapt for functionality and costly to light and heat.
Free schools, the most recent signi cant example of new school start -ups, are often set up with the attraction of using redundant buildings. Professor Tooley would do well to note that experience has been that their initial buildings cost alone has been, on average, twice the  gures initially anticipated. His previous experience of a private school start up, at Grindon Hall, has since converted into a Free school.
The comparison of his low fee private school model with free schools is a valid one. It was originally anticipated that free, independently governed schools would both challenge and indeed adopt schools at the struggling end of the private fee paying school
spectrum. Such schools generally fail because fee paying parents
can no longer afford the fees, or see them as bad value for money, the catchment has changed or there are internal management and educational problems.
Free schools are initially better funded by the DfE than converter Academies, but it is worth looking at the costs and income for these. From my  rm’s recent, but as yet, unpublished survey from our own clients’ Annual Accounts returns for 2016, Academies total income per pupil for primary schools was just shy of £6,000 p.a.; for secondary schools £7,000. For LA maintained schools the  gure is lower at £5,400. Independent day schools stand at £8,700 p.a. The costs per pupil are less than this, but roughly leave a 5% surplus; a minimum
for building any kind of reserves for capital and working capital requirements for the future.
Schools that do not make provision for weathering any potential set-backs are unlikely to give the stability and continuity that is required to see pupils through their time there.
Many fee paying schools have spent decades building up backing and support to help subsidise
Mallard commented: “It was a great pleasure to be able to welcome Justin to the College to speak to students about the world economy, business, and  nancial education, essential for preparing students for their lives after Sixth Form, and is increasingly a central element of the curriculum at College.”
Cheltenham College is one of the  rst schools to launch a mini-MBA programme, which provides an overview of the skills required to set up and run a successful business.
pupils from homes that cannot afford the full fees. Figures indicate that the lowest achievable level of fees in a private school which was not heavily endowed, would be
at least twice the level quoted by Professor Tooley. The only way they could be near to his headline level would be by doubling class sizes or employing an unbalanced low cost staff room, or both. This could only adversely affect the standard of education offered to the pupils.
What appears on  rst sight to be
a good idea is full of potential  aws. But then, if the road to
hell is paved with good intentions, the paths to the insolvency practitioners’ doors are strewn with good ideas!
One wonders if the families his school is wishing to support, might be tempted by the opening offer - only to  nd that later on they face escalating fees that they cannot afford. Their choice then would be to return to the state sector where the educational offer might be better; particularly in a city so full of excellent educational establishments such as Durham.
There is an extensive programme of talks and workshops by outside speakers, and personal  nance sessions are provided within the wellbeing programmes for each year group.
Financial planning
One of the best known names
in investment management and media personality, Justin Urquhart Stewart, alongside  nancial planning company Pierce eld Oliver, paid a visit to Cheltenham College, Gloucestershire, to talk
to Sixth Form students about the importance of  nancial planning, as well as touching on the world economy and issues for 2017 such as BREXIT and Trump.
Justin, who won the ‘Best Industry Commentator’ from the City of
London Wealth Management Awards, and who is a frequent commentator on television and radio, said: “Despite many efforts
for attaining higher educational standards to prepare young people for a dynamic career, many let teenagers wallow in  nancial ignorance. This is irresponsible of us, and must be addressed. Failure to do so will hamper not just their future but that of our economy as well.”
Head of Economics and Business at Cheltenham College, Dr Graham
10 Finance

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