With half term fast approaching, it felt like a good time to revisit the evolving UK education landscape. I last wrote about the independent education sector in our Restructuring in the Independent School sector: what does the future hold? publication. At the time, the impact of Covid-19 was at the centre of the pressure being placed on independent schools. Fast forward 18 months and the pandemic seems all but forgotten, with businesses across the UK now facing a new wave of economic uncertainty.
Since the 2008 financial crisis, there has been a raft of consolidation in this sector as a large number of schools have recognised the benefit of being part of a wider UK or International Group, with the advantages of increased financial and operational support. There are around 2,500 independent schools in the UK, which play an important part in the country’s education system. As we continue to enter an increasingly uncertain political and economic climate – the moving parts of which seem to be changing on a daily basis - the drivers for consolidation are likely to continue, and as such there will be a number of schools that would benefit from reviewing their own situation and working out how they will be best placed to ensure their long-term success.
Good financial and operational forecasts enable senior leadership teams and governors to understand their precise current and future financial and operational strengths and weaknesses. Reviewing and challenging these forecasts enables leadership teams to formulate a plan to ensure that challenges are met, strengths are capitalised upon, and as such the longer-term success of the school continues.
Schools have a relatively high degree of operational and financial predictability, so preparing reliable, medium and long-term forecasts and plans can be a relatively straight forward task that can help set-up a transformation or turnaround strategy, possibly including merger or sale, which could also provide a stronger base to leverage and increase pupil numbers from, whilst also taking advantage of improved economies of scale.
Against the ever-changing economic backdrop, adaptation and resilience are key to the best outcomes for this sector. Those that monitor, forward plan, and take corrective action will stand the best chance at ensuring a sustainable future.
“Good financial and operational forecasts enable senior leadership teams and governors to understand their precise current and future financial and operational strengths and weaknesses.”