Cash Strapped but Confident: Should Leaders be More Bull than Bear?

With limited cash reserves, Independent School Leaders are faced with an arduous task in the wake of COVID-19 as they balance the essential operations of solvency with investment in a world of muddier demographic and economic outlooks. Senior Leaders from across the country need not be reminded that the pre-pandemic situation was difficult enough for many schools with skyrocketing teaching staff costs through the TPS hike in an already competitive landscape.

Despite fears of a near 30% market wipeout, sector confidence has proven that perhaps the prospects of an industry downturn are stoic pessimism at best and short-term at worst. Indeed, school leaders surveyed in Autumn 2020 expressed reserved confidence which was rewarded in recent ISC census figures which showed a 1.3% drop in the overall student roll. Julie Robinson, chief executive officer of the ISC stated that these figures demonstrated that “pupil numbers did not significantly decline, contrary to some predictions”.

Looking back historically, we can find even more cause for optimism. The economic knock-on effect of the 1991 recession on independent schools saw them hemorrhaging over 11,000 students in the following 5 years. This was out-stripped by the 2008 credit crunch in the wake of which schools suffered 8 years of anemic recovery to recoup their pre-crisis intake. Against the expectations of many pundits in 2020, recent projections suggest that a strong economic recovery is already underway. Mirroring this market uptick is a more engaged parent population, which is an opportunity for a sector that can pride itself on service. As state schools battle the treasury to turn around learning loss, with headlines of resignations and meager funding commitments, a more aware parent demographic may seek solace in their local independent provision.

Hopeful noises on the home front echo an optimistic outlook for the sector’s economic opportunities from abroad. The global market for private education is both resilient and growing and if schools can remain competitive and attractive, maintaining access to this market should be a priority. Skeptics of this optimism will cite the fears made manifest in data, as Brexit and the restrictions on travel caused a sharp drop in interest from mainland Europe and China. However, even in this unprecedented period, shrewd school leaders have been able to offset this loss by focusing on growth regions such as Hong Kong and Nigeria.

Having your finger on the pulse of global security and economic growth is not only essential for new recruitment markets but should also be a focus for schools establishing international hubs. News of a stifling shift in CCP policy will do much to stem school appetite in China but a more sanguine approach to emerging markets could pay dividends to schools in the UK. Many leaders have increased their school's offering whilst gaining the first foothold in untapped locales such as Vietnam or Egypt.

Despite tough competition, the best resource for School Leaders has always been their peers. The sharing of best practices among school leadership helps to distribute the cognitive load of strategic management in the 21st century. Indeed, the herd immunity of both formal mergers and informal partnerships has been vital for many leaders in sustaining and cultivating their historic schools during the pandemic, and community should continue to be a priority for leaders as we emerge.