Sarah Ediss FCA
- Accounts and Audit Partner
- +44 (0)330 124 1399
- Email Sarah[email protected]
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The Kreston Group recently carried out a survey to understand the impact of COVID-19 on the charity sector. Those surveyed included Independent Schools, which have been particularly affected.
Home schooling has for most schools resulted in fees discounts, particularly during the Summer Term 2020. Schools with boarding provisions and international students have seen the largest reduction of income and are still experiencing a slow upturn in international student numbers expected for the start of the 21/22 academic year, due to the lack of confidence in the travel market.
Whilst schools were able to claim for government support under the Coronavirus Job Retention Scheme, most experienced an increase in costs due to additional spend on ICT to enable lessons to take place remotely and additional PPE and cleaning costs to ensure staff and pupils remained safe on returning to school premises. More than 60% of those surveyed expect costs to continue to increase over the next 12 months.
We are now observing school executive teams and trustees move on from crisis mode and refocus on their long-term strategy. A few areas which are being discussed:
Both teaching and non-teaching staff are fundamental to the success of a school. Whilst a significant number of employees across the UK economy are now enjoying the benefits of more flexible working practices as a result of home working, this is unlikely to be possible for teams within an Independent School. Most commentators forecast a long trail of mental health issues arising from the pandemic and schools will be no exception, in fact they may experience greater issues without the agile working benefits. 55% of charities are looking to place more focus on this area and we expect that this will be an important part of Independent School’s strategy over the next 12 months.
Whilst trying to save costs, a number of schools said they have stopped all but essential repairs and maintenance. It may now be time to re-survey the condition of the school’s property and ensure that budgets over the next few years allows for the necessary premises upkeep and improvement costs to keep the school functional, safe and attractive to parents. Some schools which have historically maintained a boarding provision are carefully reviewing their strategy to consider whether this is still the right focus for the future. Others are considering whether there are options to generate cash from the sale of surplus land. It is important for trustees to explore all options and model these within their future forecasts.
Almost 50% of charities indicated that their technology was inadequate to deal with the challenges that the pandemic threw at them. Although we hope that schools will not be required to return to home schooling, the pace of change of technology is faster than ever before. For the young people educated by Independent Schools it will be essential that they are exposed to up-to-date hardware and software to build the skills they will need in the future world of work. This all comes at a price and schools will need to ensure they budget their technology expenditure requirements to keep up with the market.
A number of schools have taken out CBILS loans in response to the pandemic and we are now seeing bursars engage with the business bank managers to consider restructuring their financing.
We know from our experience advising Independent Schools that there is an encouraging picture of resilience and preparedness to face the next few years as the UK economy recovers from this crisis. We expect Bursars to approach the challenge being open to new ideas and we are sure that we will see increased collaboration between schools in the future.
You can download of copy of the survey here.
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