Are you concerned about the potential removal of private school charitable status?

It would be an understatement to say that education has faced challenges over the past couple of years and many schools have come up with innovative solutions to keep standards high, students engaged and parents happy. However, when looking at finances, the biggest struggle may still lie ahead.

Some 75% of UK private schools currently enjoy charitable status, however, there is a growing consensus of opinion that this position will come to an end in the short to medium term, meaning that VAT will become chargeable on school fees. A potential 20% rise in fees at a time when many families, irrespective of income cohort, are feeling the pinch from the ‘cost of living crisis’.

In January 2023 a bid to set up a select committee to consider reforming the charitable and tax status of independent schools and redistributing money to the state sector was defeated at the end of a caustic Commons debate. The motion was defeated by 303 votes to 197, divided the chamber along Conservative and Labour lines. Labour leader Sir Keir Starmer has stated that he will remove charitable status from independent schools if he becomes Prime Minister.

For private schools where there has been large capital expenditure in the past ten years, this could deliver a potential windfall, via recoverable VAT, but for a large proportion of schools, this would not be the case.

A potential 20% rise in fees at a time when many families, irrespective of income group, are feeling the pinch from the ‘cost of living crises could have dire consequences for many schools if contingency plans are not actioned swiftly.

A January 2022 census by the Independent Schools Council (ISC) reported a record number of 544,316 pupils at 1,388 ISC member schools, a rise of 2% on the 2020 figures. However, this figure indicates that growth is slowing and, in some regions, such as London, the rise was just 0.8%.

The rising fees threat comes at a time when some schools are reporting a drop in admissions of up to 25% year-on-year and competition for new pupils is becoming a business necessity. 

Has web traffic to your admissions page increased or reduced this year?

What does your pupil funnel over the next couple of years look like? One good indicator is to measure the amount of traffic visiting the ‘Admissions’ page of your website. How has this traffic changed over the past couple of years? Is it increasing or declining? How many of those visits are converting into quality enquiries? 

If the numbers are not showing an increase in line with your financial expectations, it may be time to consider an enhanced approach to your commercial marketing and a way to get ahead of any potential challenges. The Chain offers a free consultation and proposal to help you connect with your next generation of parents.