It is the time of year when schools are thinking in earnest about setting their fees for September, married against the need to keep staff salaries competitive as well as the impending, and as yet unknown, VAT conundrum.
Each institution will have to consider with care its own unique set of circumstances to complement the national picture across the sector, yet the need for Boards to strike the right balance between positivity and pragmatism has perhaps never been sharper. Not only is the figure itself important – but also the mode of its communication. In my experience, an empathetic (but unapologetic) tone and sensible timing of a letter to key stakeholders will go a long way towards addressing any concerns that may be harboured within a school community. A vacuum of silence is not helpful and it is common enough leadership theory to recognise that ownership of your own narrative is critical; idle gossip or speculation will otherwise all too quickly fill the void. If parents or prospective families feel over-burdened prior to a VAT announcement then they will likely vote with their feet, either by hastening their exit or delaying their entrance respectively. Equally, if a school’s teaching and support staff believe they are undervalued then morale may evaporate quickly and translate negatively to other stakeholders.
A lot of Heads and Bursars have asked for my advice in respect of predicting the average fee rise across the independent sector this year – and I get the impression that schools are watching each other even more hawkishly than usual to ensure they do not become an outlier in the market. My best guess in answer to the original question is around 5%. This statistic is logical because it will track the national fall in inflation, enable staff to receive a (modest) pay rise and protect the likelihood of a school’s need to act in defence of a substantive VAT policy in the not-too-distant future.
The recent launch of an MTM White Paper on the subject of fee resilience in the light of VAT, as well as our recent webinar featuring David Woodgate, CEO of ISBA, are both available via the MTM website. They contain excellent, practical advice for Boards or school leaders and represent a sound investment of one’s time. In short, the takeaway message is: “Do something!” This is not a moment for schools to be passive.
For bigger organisations, there is an opportunity to either consolidate income and expenditure or expand their business models via a buoyant Merger & Acquisition market. For smaller, stand-alone schools, the use of accurate data to inform crucial strategic decisions is paramount. The net result is that with such a platform, outcomes can be determined from a position of information. Conversely, without a credible bedrock of substance to draw upon, pivotal conversations will be taking place in a Board Room equivalent of Russian Roulette – and the odds of that deadly game are not dissimilar to the predicted ratio of independent schools that may close in the medium term…
If you would like to have an initial confidential conversation around your school strategy, please get in touch with Duncan on 01502 722787 or via email at duncan@mtmconsulting.co.uk.