Hard times or great expectations?

In the same way that the nation awaited statistics to confirm we had officially entered the recession we all knew we were heading for, so now do we also have official confirmation – from the 2009 ISC census - that independent schools have entered a period of negative growth in pupil numbers, albeit by a small amount.

Combine this with all the other challenges the sector is facing, such as uncertainty over charitable status, demographic changes, university discrimination against private schools and – to continue the Dickensian references – it seems a Bleak House.

Much of the commentary refers to the downturn as cyclical. Recovery will come, it is only a question of when. Schools tend to follow the economy at large, with a time lag. But it is also true that organizations going into the downturn will look rather different when they come out on the upturn. The important issues for schools are whether they are entering a cyclical, temporary, change; or structural, permanent changes.

Means of protection from the effects of cyclical change in most organizations are similar. Key performance indicators - for schools, the ratio of fee income to staff costs, pupil numbers and enquiries, and, of course, cash flow, all need to be watched closely. Short term problems can be addressed by increasing class sizes, deferring projects and closely controlling the level of fee remissions. Relationships – with bankers and parents – will need to be managed carefully, but if changes are seen as temporary, this should not be impossible.
The difficulties arise when there is structural change taking place that may be hidden by the cyclical changes. Addressing a longer term decline in demand for a type of school requires both bravery and time. Schools are notoriously slow to either accept their problems or address them. Governors, like Mr Micawber, often hope that ‘something will turn up’.

All independent schools must currently be considering whether they are facing cyclical or structural change and how they should react. Both present opportunities for change for the better. Adapting to expectations should prevent a falling on hard times.

These, and other related issues are being discussed at the ISM’s Essential Briefing on 30th June.

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Date: 05-05-2009