Independent School Management, April 2024

INDEPENDENT SCHOOL MANAGEMENT

Selling your school to a commercial operator

Help with finance for heads

The Independent Schools Inspectorate's new framework

Implement a sustained school development programme

The issuethorny of fees

Are your fees about right?

Welcome to the April 2024 edition of Independent School Management. Thank you for your continuing support for the magazine; it really is appreciated.

The level at which you set your school fees is a critical decision to make. Are you charging too much? How resilient are your parents to a huge increase? The latter, of course, is the question being asked up and down the country by our schools. Anecdotally, there are several schools that are confident that their parents will be able to bear the brunt of Labour’s (probably) imminent VAT imposition on fees, while other schools are hoping to absorb some of its impact by only passing on, say, 5-10% onto parents’ bills. Many fear for their existence.

OPTIONS?

In the past, there have been several examples, including at St Joseph’s College in Reading, where fees were cut as a strategic exercise. It had been identified that the local market was being outpriced by the school. Coupled with an investment in the fabric of the school, the decision proved to be a success as a huge rise in pupils ensued and the school was rejuvenated. Simply put, if you cut the amount you charge in school fees but, as a consequence, increase demand by a greater proportion, you receive more money overall.

Other schools have chosen to increase class sizes that were too small previously and so were economically unsustainable. While some parents and even teachers often find it hard to fathom, there is little evidence of a correlation between class size and performance, up to a certain level. Is your school fully subscribed, or can you add a few extra to classes?

Perhaps having more parents at your school could spread the risk of losing some of them to potential unaffordability after the imposition of VAT?

There is also an important question to be asked about why fees are charged at a particular rate and whether the education provided and the fabric of the school offers sufficiently good value in return. Low-cost schools are fairly rare here but there is one in Northumberland that is charging fees that are even lower than the state per pupil funding. Its creator explains the rationale in this issue. But it also raises the question that, if fees are lower in the first place, is adding VAT not so huge an imposition to a parent’s budget?

FUNDING STREAMS

Schools also need to manage scholarships and bursaries more carefully. Some have been giving away too many, making them (potentially) financially unsustainable. However, funds ordinarily diverted into those pots should be retained as a buffer against the financial challenges of VAT on fees. Savings can be made, of course, through controlling expenditure, for example in IT and through outsourcing. Some schools now charge for extras such as off-timetable subjects, or control timetable allowances to reduce the need for extra staff. While all of these things on their own may only make a small difference, as a whole they can help save a school by making it become affordable.

WHAT WILL BE THE EFFECT?

There is still speculation as to how damaging the VAT charge will be to the sector. There are various figures being mooted that it will lead to the closure of between 50 and 200 schools. This won’t

be clear for another couple of years or so. However, school merger activity is in overdrive. We have introduced a new regular feature, Merger watch, which highlights some of the ongoing changes in the sector. While there is inevitably a time lag between the initial decision to merge and the announcement of the merger, having had to go through legal and due diligence procedures, this feature will still give some indication of how the sector is choosing to rationalise its numbers.

ALL ABOUT THE MONEY?

Elsewhere, we see how one founder of a successful schools group was inspired to launch his own: an education first, but commercially driven approach.

We also assess how trading subsidiaries should be a part of your school business and provide a scenario to help guide a governor in its management.

To keep up with the latest sector news and people moves, follow us on Twitter @IndSchMan

Andrew Maiden Editor, Independent School Management

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6-7 News in brief

8-10 Why do schools fail?

Selling your school to a commercial operator

11 Merger watch

Activity in the sector special focus

12-14 Upend the school fee model

Durham’s low-cost school

15-17 The price is right

A new approach to understanding fee pricing

18-19 Keep the money flowing

The impact of household cash flows

20-21 Advance warning

Fees in advance schemes

22-23 Trading places

Setting up a trading subsidiary

24-25 Trade mission

Considerations for trading subsidiaries

26-27 An inspector calls

The Independent Schools Inspectorate’s new framework

28-29 The right choice

Procurement of information communications technology

30-31 Available on request

Dealing with subject access requests

32-33 Priorities for bursaries

Challenges related to property management

34 The importance of oversight

Help with finance for heads

35-36 Bank deposits

The best rates

37-39 Final plans for net-zero

Achieving decarbonisation for the school estate

40-41 After the fall

Tips for preventing injuries from mishaps

42-43 Invest ethically

Schools as responsible investors

44-45 In the summertime

Hiring EU summer school staff

46-47 The money-go-round

Implement a sustained school development programme

48-49 People moves

50-51 The last word

Kate Martin, head of Mowden Hall School

News in brief

ETON COLLEGE AND ITS STATE PARTNER STAR ACADEMIES REVEAL PLANS

Eton College and its state school trust partner Star Academies have published their first joint research report, which focuses on high achievers failing to meet their potential.

They have agreed to open an education think tank to pool the expertise of both organisations to dismantle barriers to achievement.

Their first research report, undertaken by Public First and the Education Policy Institute, found that more than 5,000 young people a year achieved excellent GCSE results (at least an A or A* in English and maths) in 2013, but didn’t progress to get a university degree by the age of 25 – representing 9% of the highachieving cohort.

The study recognises that a university education isn’t the sole measure of success, with other opportunities available, including degree apprenticeships, higher technical qualifications and specialist vocational courses. It concludes that whatever options are pursued by young people, developing their academic talent improves life chances and brings wider social and economic benefit.

Star Academies' chief executive Sir Hamid Patel said: “Our partnership is an incredibly strong one, with foundations in both a shared vision for education and in tangible delivery. This can be seen in the work we are already doing together –developing our plans for three new sixth form colleges and working with partner schools – and in what we plan to achieve in the future with our new ‘think and do tank’.”

The Eton Star Partnership’s think tank, also branded as a ‘do tank’, will specifically focus on ways to ensure that as many high-achieving young people as possible access courses and qualifications allowing them to fulfil their potential.

It will commission academically rigorous research, conducted within and beyond its own organisations. Initially much of the work will be focused on the three towns that will be home to the new sixth form colleges being opened by the Eton Star Partnership in the

next few years: Dudley, Oldham and Middlesbrough.

LABOUR REFUSES TO EXEMPT ALL SEND PUPILS FROM VAT PLANS

Labour’s shadow education minister Helen Hayes has said that the party will not exempt all schools teaching children with special educational needs and disabilities from its VAT plans “to avoid a loophole whereby any school can claim that it is a special school”, The Telegraph has reported.

Speaking to MPs during a Westminster Hall debate, Hayes said Labour has promised to exempt fees for pupils with an education, health and care plan (EHCP), however more than 1,600 children in independent special schools don’t have an EHCP, which can take years to acquire.

The Independent Schools Council chief executive Julie Robinson said: “We are calling for an exemption for over 96,000 of our students who are receiving SEND support but who do not have an EHCP. Whether or not their independent school is designated as a special school should

be irrelevant to this. We are keen to work with Labour to make sure this exemption would be targeted at the families and children who need it.”

Neil O’Brien, the Conservative MP for Harborough, who had questioned Labour on its policy, said: “Parents of children with special needs work so hard and often have no practical choice except small independent schools to get the care their vulnerable children need.”

WORKS UNDER WAY AT BEDFORD GREENACRE

Building works at the new Bedford Greenacre Independent School site at Manton Heights are progressing, following the completion of a multimillion-pound funding deal in February.

The funding from HSBC UK, which was secured with the help of law firm Shakespeare Martineau, will support the development of the new 40-acre school, including more than 55 classrooms, a 3G football pitch and amphitheatre.

Groundworks, excavation, piling and concreting are all under way, with the project on target to receive 690 pupils, from reception to sixth form, in the 2024 autumn term.

Bedford Greenacre Independent School was created in 2021 following the merger of Rushmoor School and St Andrews School and currently operates across two sites in Bedford. The new school will replace the two sites.

Ian Daniel, headteacher at Bedford Greenacre, said: “The project is developing at pace; the car park for staff and the community is already in service and the modular structure will begin to take shape over the next few weeks.

“We’re thrilled with the positive

Simon Henderson and Hamid Patel at Eton College

Bedford Greenacre Independent School

reactions from our local community about our transformational project so far, and delighted to have reached the all-important milestone of funding completion.”

WELSH SCHOOL OFFERS BEST VALUE FOR MONEY

St Michael’s School in Bryn, Carmarthenshire, has been named The Telegraph’s best value for money independent school for 2024.

The value for money analysis compares fees charged by schools with their results at GCSEs and A-level to judge the highestperforming schools for the best price. Fees for the 2023-24 academic year were judged against summer 2023 exam results.

Fees at St Michael’s School for sixthform pupils start at £14,490 a year for day pupils. At least 79% of pupils secured top grades at both A-levels and GCSEs.

Last year’s winner, the £14,676-a-year Withington Girls’ School in Manchester, came second. Last year St Michael’s School was the runner-up. Withington pupils achieved A or A* in 74.3% of GCSEs and 89% of A-levels.

Manchester Grammar School, with day pupil fees of £15,180 a year, was placed third.

CASTLE SCHOOL RESCUE PLAN FAILS

A plan to save a Welsh independent school from closure has failed, the Pembrookshie Herald reported.

Castle School, a co-educational private school for children aged three to 16 in Haverfordwest, Pembrokeshire, alerted parents in January that the school was having to close following the loss of key leadership team members, the financial and operational challenges of managing multiple school inspections, the unsuccessful transition to a new management model, and the school’s decision to close its sixth form and nursery.

Then the parents of a Year 5 pupil at the school, Dr Mark Boulcott, a retired army officer turned dentist, proposed a plan to save the school. This was subsequently deemed “untenable”.

In correspondence with pupils’ parents Boulcott said: “It is with regret that without immediate extensive capital

investment, something we do not have, school purchase resurrection or reorganisation is impossible.”

INDEPENDENT SCHOOL PARENTS ATTACK FREE SPEECH

Parents of pupils attending Latymer Upper School in Hammersmith, London attempted to stop Nigel Farage from giving a speech at the school, the Evening Standard reported.

The parents were reported to be coordinating their action via a WhatsApp group aiming at silencing the former Brexit Party and Ukip leader.

The invitation by the school’s John Stuart Mill Society went ahead however. The school commented: “We recognise the concerns our community may have, but we feel it is important our students are exposed to and have an opportunity to challenge a range of views across the political spectrum.”

Farage told the Evening Standard: “Wealthy London parents who work in the corporate world clearly want their children to be blinkered.”

SCARBOROUGH COLLEGE FORMS CRICKET EXCHANGE WITH KIWI SCHOOL

Independent day and boarding school Scarborough College in North Yorkshire has begun a cricket exchange programme with a top New Zealand school.

Whanganui Collegiate School was established in 1854 and is a member of The Headmasters’ and Headmistresses’ Conference. However, in 2012 it integrated into the state system after requiring a financial bailout from the New Zealand government.

The exchange saw two Scarborough boys

arrive for the winter term in New Zealand while Whanganui pupils will spend the next term at Scarborough College. The plan is to continue the scheme every year.

Nathan Valentine arrived down under from Scarborough and went straight into the nets joining the Kiwi school’s Cricket 1st XI as they trained.

Whanganui’s headmaster, Wayne Brown said: “I am delighted to share this exciting collaboration between the two schools that enhances our commitment to fostering global citizenship and character development among our students through the sport. This cricket exchange programme not only provides a unique sporting opportunity but also promotes cultural exchange, building bridges between young minds from different parts of the world.”

Scarborough College’s headmaster Guy Emmett commented: “Despite being far apart, this exchange embodies the essence of shared learning, cultural enrichment, and the unifying force of cricket. I look forward to our students having teammates from across the world during the exchange, but also in the future, beyond their time at our two schools.

Scarborough College’s Nathan Valentine on his first day at Whanganui Collegiate School

St Michael’s School

Why do schools fail?

Inspired Learning Group’s Amit Mehta questions whether selling a school to a commercial operator is seen as a failure

Schools are facing challenging times. Inflationary pressures have seen leaders having to make tough decisions to increase fees to remain viable. But we cannot continue merely passing on costs to hard-pressed parents; we need to become more efficient and more businesslike. Indeed, the likelihood of a new government suggests independent schools may lose their charitable status, exacerbating the urgency of finding new ways to generate revenue and remain open to the communities we serve.

Ten years ago, I began my journey of turning around struggling schools. In that time, we have acquired 17 independent schools and seven nurseries. With great pride, I can say that we have not closed a single setting, and all are excelling without external backing.

I have learned that all good schools flourish in similar ways. Successful schools find a tangible mission they can

work towards with passion, and retain a clear sense of identity that can withstand change, loss and acquisition. In this way, they mirror modern businesses. As we brace for change, it’s vital that we return to these basic principles, identifying our purpose and responding to the demands of our key stakeholders.

Struggling schools face myriad difficulties and we have seen many examples of trustees fearing takeover, governors making inappropriate investment decisions, and an increase in non-contact time as pupil numbers decline. All are symptoms of a reluctance to take early decisive, and sometimes, difficult decisions.

SOLID FOUNDATIONS

In 2014, my children lived through the most unimaginable period of difficulty any child can know. Nothing in life could have prepared them for the loss of their mother,

but I found some comfort in knowing that school was the one place where my children could find stability, consistency and certainty.

Our schools are the spaces we give to our children as they discover their strengths and learn resilience in a safe environment.

Amit Mehta

Inspired's Saint Felix School in Reydon, Suffolk

“A swimming pool is not a priority when parents are asking for new IT equipment – but we only know that by engaging with them.”

Schools matter, because they provide the regularity to shape a child’s fundamental assumptions about themselves and the world around them. It is crucial, therefore, that we build our schools with the care and purpose needed to take them through that journey, start to finish.

WHY I BELIEVE

SCHOOLS FAIL

Schools fail when they lose sight of their purpose. Parents acknowledge the challenge schools have in balancing

numerous priorities – and the time it takes to effect change. They want to be heard and to see the school is moving towards a vision they can understand.

At the heart of this is a clear mission statement. Competitive schools clearly understand who they are and what they represent. They acknowledge headwinds and make tough decisions. They model for the worst and aspire for the best, evolving where necessary without losing brand identity.

Schools must learn from the corporate world to align profitability with a brand that can endure. Business is not a dirty word; we can only continue our work if we are profitable. But this is only possible by delivering on a core promise to parents that we will give their children the best start.

Over the years, I have acquired several schools on the brink of closure. To close would be a badge of failure, but to ask for help from a commercial operator is not. The most common mistake schools make is procrastinating and leaving it too late

to reform internal practices, losing track of the plan and justifying poor budgetary choices without stepping back. Often, we see schools that are asset-rich yet cashpoor. But selling an asset and applying the cash elsewhere does not solve the problem.

WHAT WE HAVE LEARNED

Schools close when they stop talking to their stakeholders and understanding their needs. They fail when they continue making poor investment decisions without reference to a commercially viable plan. Charities might meet once a term, so decisions are delayed; a more corporate approach is to take action.

When we step in, we move fast. We begin by surveying staff and parents anonymously to assess their needs. We speak to pupils to quantify the gap between what they need and what we need to offer – and draw up remedial plans with both ambition and commercial realism. A swimming pool is not a priority when parents are asking for new IT equipment – but we only know that by engaging with them.

Pupils at Inpired's Yateley Manor School in Hampshire

KEY MESSAGES

• Learn from everyone: data is king. Before embarking on any big change, get the lay of the land by consulting with the people who will be most affected by any new decision.

• Work smarter: using a framework to set achievable goals within a determined time frame that you can measure gives you accountability and helps justify changes where they are needed.

• Work with your community: make the most of your assets by renting out spaces when students are not in school to use resources better and address the needs of current and prospective stakeholders.

• Know who you are: agree the basic values of your business and share them with stakeholders. A clear code of expectations keeps you accountable and helps your partners stay on track when seas are stormy.

• Be bold: try new things. A-B test small changes and measure the results. Make a strong offer to parents by changing their expectations of what a school can be, working with foreign partners, building courses for the world ahead and challenging stagnant practices.

“We hire our heads for their academic excellence and we run academies to enable them to develop commercial thinking.”

Strategy sessions bring it together, organised with urgency and regularity. We delegate clear responsibilities and set congruent goals. We carry out costbenefit analyses based on need, set clear deadlines, and hold ourselves accountable with termly updates in parent-facing communications and a longer-term strategic plan. When we deliver, we celebrate our success.

Schools that join a group benefit immeasurably from the efficiency of centralised functions such as recruitment, procurement, energy, insurance, and the ability to AB test and share best practice. But we will not interfere with a trusted identity by overwriting branding or undermining local community allegiances. The strongest asset a school has is the brand identity it has built over generations, becoming synonymous with the community it serves.

HOW WE GROW OUR SCHOOLS

It is challenging to learn a commercial mindset, but the leaders that survive periods of change have passion. Business acumen develops that passion into something with direction and strategy.

We hire our heads for their academic excellence and we run academies to enable them to develop commercial thinking. This creates supportive environments that empower them to make mindful decisions about future challenges, including how to build up reserves. We support our leaders

to think as chief executives and to care about their school as a business.

We support schools on the path to profitability by anticipating future demands and expanding their provision and facilities. We work with local businesses and international partners to deliver a unique offer that responds to need. We source specialists in emerging technologies who can add immediate value to classes with vision that truly serves our pupils.

THRIVING WITHIN A COMMERCIAL GROUP

We can grow without losing the sense of who we are. Leaders should justify commercial decisions with data that addresses demand. But they must take these decisions with ambition, reinforcing the school's identity and values to build an environment that celebrates young people.

Charitable status has come into question with the looming prospect of a Labour government. Many schools are now considering alliances, or joining a commercial group, for the first time. There is understandable anxiety, but uniting around common principles is not a failure if we keep sight of our purpose and let go of outdated traditions. Success is delivering for our students. Failure is when schools hold on for too long to outdated thinking and are forced to close. That catastrophic loss to the continuity of learning affects pupils, families, staff and the community.

My children are now young adults. They will soon embark on the next stage of their education at university. School has been a constant for the majority of their lives, through the highs and lows. As a parent and entrepreneur, I know children are our future. Taking bold decisions ensures that every child attending school is given the opportunity to learn in a safe, encouraging and inspiring environment for many generations to come. This is what our schools stand for, with the children at the heart of everything we do.

Amit Mehta is chief executive of Inspired Learning Group.

schools

Merger watch

Law firm VWV’s Siân Champkin introduces a new regular feature on merger activities in the sector

2023 represented a particularly busy year for school mergers and acquisitions, with consultants seeing an increase in transactions on which they advised. This is, of course, only one part of the picture, but given we represent one party or the other on a majority of the independent school transactions it does give a firm flavour of the activity in the sector.

From initial signs, it looks like 2024 will be busier still, with a large number of ongoing transactions and many more in the early stages. In particular we are seeing a significant number of strategic acquisitions by senior schools to secure their prep market (locally and beyond) in a number of transactions of this nature and in some cases a concerted and premeditated move towards the growth or establishment of a schools group.

We saw a number of interesting matters last year, including the acquisition of the commercially operated Hampshire School in Chelsea operated by GEMS being acquired by charity The Francis Holland Schools Trust. The chair of governors commented: “The acquisition enables us to expand the junior school to two form entry, providing additional high-quality space for our junior pupils and at the same time allowing the senior school to develop yet further.”

We believe cross-fertilisation between the commercial and charitable parts of the sector will continue bringing opportunity on both sides to build a more robust and commercial minded sector going forward into potentially turbulent times. We would expect to see joint venture structures (such as that we advised on between Wychwood School and E3 Capital) to be explored and considered further to consolidate and expand that cross-fertilisation.

The acquisition of charitable schools by commercial groups continued to be a strong theme in the past 12 months and we see no signs of this abating in the months and years to come, with a number of instructions of this nature being ongoing and in the pipeline. Increasingly we are experiencing governing boards

exploring this from a position of strength rather than distress. We expect to see a number of transactions in the coming months where charitable boards have taken a strategic decision to detach the operation of the charity from the operation of an independent school by the sale to a commercial third party, leaving a significant financial legacy that the charity can continue to use for charitable purposes outside of the direct operational elements.

A look back at 2023: key facts

47 K12 independent schools transactions of which:

• 13 sell-side,

• 10 buy-side,

• 16 merger,

• 8 other structure, and

• 9 had an international element.

Some transaction highlights:

VWV advised that last year it was involved in 25 other ongoing or confidential projects as well as six aborted transactions which were also confidential.

Client Project Sell-side/ Buy-side/Merger

Beeston Hall School Merger with Prep Schools Trust Merger

Blackheath Prep Merger with Eltham College Merger

Clifton College Merger with Tockington Manor School Merger

Education in Motion Acquisition of Sherfield School from GEMS Buy-side

Forfar Acquisition of Springmead School Buy-side

Francis Holland School Acquisition of the Hampshire School from GEMS Buy-side

Globeducate Acquisition of Boundary Oak from Buy-side Quo Vadis (as co-counsel with Weil)

Kingshott School Merger with Mill Hill School Merger Manor House School, Little Bookham Merger with Effingham Schools Trust Merger

Rookwood School Sale to Inspired Learning Group Sell-side

Ruthin School Sale to Ruthin Education Sell-side

Sherborne Girls School Merger with Hanford School Merger

St Andrew's School, Woking Merger with Halstead School Merger

St. Joseph's-in-the-Park Merger with Mill Hill School Merger

Sunninghill Prep School Sale to Inspired Learning Group Sell-side

Surval Education Limited Acquisition of Webber Independent School Buy-Side

VWV.

Siân Champkin is a partner at

Sian Champkin

Upend the school fee model

They said it couldn’t be done. When we first mooted the idea of a low-cost private school in England, every commentator said we wouldn’t be able to make it work. Well, we’re proud to say that the Independent Grammar School: Durham (IGS:D) has successfully completed its fifth year.

Although we started even lower, the school’s fees are now £3,900 per child per annum, which is a quarter of the average annual fees in independent schools (£15,655), and about half of the average per capita funding in state schools (£7,450) across England. We don’t receive any subsidy from any source, neither state nor private, and we don’t have any bank debt, but nevertheless on these low fees we are able to post a small surplus. People ask how it is possible for us to do this. From our side, it makes us wonder where all the money goes in other schools, both private and state.

There were two main motivations for me to team up with Chris Gray, codirector and principal of Independent Grammar School: Durham (and also with economist Dr Barrie Craven) to bring into life the reality of a low-cost private school for England.

First, was the extraordinary evidence of the movement in developing countries of burgeoning low-cost private schools – something I’ve been researching for 20 years. In urban sub-Saharan Africa and South Asia, for instance, the vast majority – 70 to 80% – of poor children are in extremely low-cost private education, with schools fully funded by parental fees.

“I was bombarded with messages from major media outlets, newspapers, television and radio, wanting to know how the school was doing.”

Children in these schools outperform those in government schools and are the preferred choice of families on the poverty line. Parents are voting with their feet to avoid state education, and this movement of low-cost private education is the result.

The question arose: why was there no similar educational entrepreneurship in England?

The second motivation arose out of our conviction that private education is a superior option for everyone. But the stark reality (as I note below), was that private education was only affordable to the wealthy.

Why was there this disconnect between what was desirable and the reality?

REACTIONS

Once we’d found our building, in a converted church in the centre of Durham, we held meetings for prospective parents in the long lead up to the school eventually opening – it took well over a year (465 days) to get Department for Education registration. There was a great deal of enthusiasm from parents at those early meetings, who really understood the possibilities and potential of having a ‘third way’ choice between state schooling and expensive private education. But as the days and months dragged on as we waited for permissions, parents drifted away. On our first day, we had only four pupils. On that day, I was bombarded with messages from major media outlets, newspapers, television and radio, wanting to know how the school was doing. When I didn’t answer their calls, they wrote negative comments anyway. Never in the history of human education, one could say, with apologies to Winston Churchill, had so much been written, by so many, about so few.

If prospective parents were initially enthusiastic, the teacher unions were vociferous in their opposition throughout (although they’ve gone markedly quiet now that we’ve been proven to be successful). For the open evenings, parents had to run the gauntlet of the

teacher union pickets. The unions, it was reported by The Guardian, said it was “impossible to provide a quality education on such a low budget”. They foisted glossy leaflets on prospective parents, saying that we would cruelly deprive the children of essentials such as hot water and central heating.

Indeed, the teacher union leader, Kevin Courtney, joint general secretary of the National Education Union, opined that it was “unbelievable” that you could run a school at the proposed low fees. Well, unbelievable or not, we’ve done it.

No doubt Courtney was relieved when the DfE reminded everyone that our school, like all new independent schools, would be “inspected during its first year of operation”, and that if standards were not being met, the government would take “appropriate action”. That would surely see us off.

We were nervous. Not passing an Ofsted inspection, of course, would mean closure, for it would be hard to convince sceptical parents of our virtues if we had even failed to convince Ofsted. But we passed the first Ofsted inspection with flying colours: Effectiveness of leadership and management? Good. Quality of teaching, learning and assessment? Good. Personal development, behaviour and welfare? Good. Outcomes for pupils? Good. Overall? Good.

James Tooley on the philosophy, history and outcomes of the launch of a low-cost school in Durham

James Tooley

low-cost schools | special focus

“Overall, the learning environment at our school “is rich with relevant and exciting activities.”

We had cofounded our critics. Prospective parents could be reassured, as could potential investors. You can indeed run a good school for 50% of the per capita cost of state schooling.

HOW THE SCHOOL IS DOING

We started the school with four pupils, and it is now at capacity with more than 100 pupils, from reception to GCSE classes, with a waiting list. As we move to new facilities in a disused Methodist church which we’re converting into a school, just outside Durham (in an old mining village called Esh Winning, subject to DfE approval), we’ll be able to double in size.

The school passed its second Ofsted inspection late last year, again with ‘Good’. It may be worth quoting excerpts from the report, because it is as independent a judgement as you can get. We are a “small and welcoming school”, the inspection report reads, in which our pupils “enjoy learning in a calm environment”. Our school “is inclusive and nurturing”, a place where children “feel safe” and where they can develop “positive and good-natured relationships with staff and each other”. Student behaviour is exemplary, with “few incidents of poor behaviour”: Pupils are “polite and respectful”. Bullying “is not tolerated”.

As far as the curriculum is concerned, Ofsted reported that it is “ambitious”, but that “staff have high expectations for what pupils can achieve”. Classes are small, with pupils given “extra adult support when needed”. The school ensures that “all pupils, including those with special educational needs and/or disabilities (SEND), can access the curriculum”. These pupils “receive appropriate support”, including “extra personalised or small group learning”.

Indeed, one of the teacher union claims

against us in the early days was that we would not be providing SEND. On the contrary, we have six children with education, health and care plans and 15 on the SEND register.

And we have a “range of enrichment activities and clubs” outside the main curriculum, including our specialities in music and gymnastics. These show in microcosm much that you need to know about our school: with modest resources and of course no specialised gym, but oozing with high aspirations and great enthusiasm from our exceptional coach, our children won first place in the North of England Gymnastics Under-16 and Under-13 competitions.

At IGS:D, says Ofsted, we place “high priority on teaching pupils to read”, through our “strong focus on the development of phonics for reading”. Our pupils “read often for pleasure and as part of their wider learning”. So positively have we awakened the love of reading in the children that the inspectors observed that children “talk with genuine enthusiasm about books and authors they enjoy. They appreciate the range of books they can choose to read in school.”

Overall, the learning environment

special focus | low-cost schools

from state schools rather than other private schools.

“So we are getting there – certainly taking private education away from the elite only, and bringing the price down to make it accessible to middleearning families.”

at our school “is rich with relevant and exciting activities”. Personal development is a key focus, with the morning assembly supporting “relevant aspects of the curriculum that promote personal development”, including “equality and diversity”.

Moreover, the teaching staff “are positive about working at the school. They feel valued and enjoy working with their colleagues. They say leaders are considerate of their workload and welfare”.

Finally, “parents and carers are very complimentary about the school. They appreciate the regular meetings with staff and the range of support the school provides for pupils”. Very importantly for us “typically, most say that they ‘can’t recommend the school highly enough’”.

In other words, the Ofsted inspectors reiterate what we are continually hearing from parents, that our school is working extremely well, and providing a far less expensive option to them than other private schools, but an experience that is much better than they ever went through in state education – for the majority of our parents transferred their children

THE PROSPECTS FOR NEW OFFERINGS IN THE FUTURE

It was never our intention to open just one school. Now that the Durham school has bedded in, we want to open further Independent Grammar Schools in the Northeast of England, to offer more parents a high-quality, affordable option, beyond their current choice of not quite good-enough state schooling or prohibitively expensive private schools. We know that our model works and we are keen to extend it to new settings. Finding the right building to rent is the key challenge here (our model is one of leasing rather than owning buildings, so that valuable capital isn’t tied up anywhere else than in delivering education). And we’re always interested in hearing from potential investors to help us extend our reach.

HOW AFFORDABLE IS IT?

How affordable are our fees? One way to look at this is to examine what economists call ‘discretionary income’. If parents pay for school fees, then these will have to come out of discretionary income, which takes gross family income and subtracts taxes and the amount required for necessities such as food, clothing and housing, as well as costs such as school uniforms and books.

Latest data shows discretionary income of about £800 a week for the average family in the richest income quintile, £250 for the fourth quintile and around £70 for the average family in the middle

quintile. Currently, average private school fees are around £300 a week (dividing £15,655 by 52), that is, they are completely unaffordable except to those in the richest income quintile in the UK. Our fees of £75 a week are just about affordable to families in the median quartile and affordable to a family in the fourth income quartile.

So we are getting there – certainly taking private education away from the elite only, and bringing the price down to make it accessible to middle-earning families.

Since we got started, quite a few budding educational entrepreneurs have been in touch with us, to find out how we are making this work, with ideas of emulating the affordable model elsewhere in the British Isles. And we’re aware that a parallel alternative movement is emerging in the US too. In large part, this is because of parents’ experiences of lockdown: many didn’t like what they saw of the workings of what the Americans call ‘public’ schools, that is, state schools, attended by their children, and so have turned to a large range of alternatives. These vary from homeschool academies or co-ops, to hybrid schools (where children attend two or three days a week and are homeschooled the rest of the time), to micro-schools (small low-cost private schools, rather like ours). We’re pioneers in this country, but certainly feel part of a growing movement. The prospects for affordable private education in England have never felt stronger. Professor James Tooley is vice-chancellor of the University of Buckingham and chairman of the Independent Grammar School: Durham board.

The price is right

Many significant factors, such as the Covid pandemic and the cost of living crisis have already prompted independent school senior management and governors up and down the country to focus on plans for futureproofing their schools. But now the sector faces further unprecedented challenges. If not already, a key agenda item for all board meetings this term should be a robust discussion about how to mitigate one or more of the obvious financial threats to independent schools, especially the much-mooted addition of 20% VAT on fees, which seems an inevitable consequence of a Labour government being elected. How far can schools simply pass on this extra burden to parents, and still justify the further fee increases required to balance the books elsewhere?

It is evident that larger schools, or those that are a part of a bigger group, may be more fiscally sustainable than smaller, stand-alone schools. Nonetheless, irrespective of where their school sits in the pecking order, it is vital that leaders carry out appropriate due diligence to better understand the dynamics that, to put it in the languages of economists, a spike in costs may inflict upon their current, and potential, customer base.

It’s worth noting that the full impact of most current threats is unlikely to be felt for three to five years. This is because most families with children already progressing through the independent school system will do their utmost to retain continuity of education for their

“It’s worth noting that the full impact of most current threats is unlikely to be felt for three to five years.”

child, while new joiners will think twice before committing to that journey, and probably delay the starting point for their child as long as possible, unless there is a particular reason to move quicker, such as for wellbeing or academic reasons. However, discussion and planning needs to start immediately.

THREATS

In no particular order, the following threats should be high on the risk register of all well managed and governed educational institutions. Some are ones affecting all parts of society, while others are more specific to the independent schools sector.

First, and perhaps most obviously, is the fragile state of the economy. A well-publicised cost of living crisis driven by rampant inflation, coupled with soaring energy costs, has hit families hard. Additionally, interest rate rises have affected homeowners across the age and income range, especially for many families about to come off fixed rate deals, who will be panicked by the difference in their monthly outgoings, despite the likelihood that interest rates may now have peaked and better deals may soon be available.

Compounded by the ongoing uncertainty of Brexit and the legacy of Covid, there are lots of political and economic questions that remain unanswered. A direct consequence of this is that fewer families are committing to the expense of a private education for their child until there’s greater clarity for the longer term.

Whatever your political persuasion, it’s hard to argue against the increasing likelihood of a Labour government. Its most recent manifesto and other pronouncements have seen them once again kicking around the private school political football. While, veiled or otherwise, immediate threats to strip schools of their cherished charitable status seem to have receded, research published by the Independent Schools Council (ISC) estimates that

approximately a quarter of independent schools could shut their doors as a result of policies proposed by Labour being enacted.

More specifically, there’s a very real prospect of VAT on fees being introduced in the medium term, and possibly being announced in the first budget of a new government, as an easy promise to keep. As the Independent Schools’ Bursars Association and ISC have regularly warned in their conferences and mailings, the political arguments surrounding independent education are ideological and consequently all counter-arguments, no matter how logical or grounded in data, are less likely to be effective in overturning such a policy. And the debate on charitable status will not simply go away, even if Labour has pulled back on it for now. It could well be reopened once it feels comfortable in power, especially if it has a sizeable majority.

There’s the rising cost of remaining in the Teachers’ Pension Scheme to consider. The financial reality could make doing so prohibitive for all but the minority of independent schools, although there’s considerable potential for disruption to staff morale (and thereby a knock-on effect to parents) if the consultation process for withdrawal from the scheme is not conducted in a professional, sensitive and timely manner.

Duncan Murphy sets out a new approach to understanding fee pricing in independent schools

Duncan Murphy

Looking at demographics, the current low birth rate will affect intake into reception, and recruitment into younger year groups, until 2032. Put simply, there will be significantly fewer children to go round in what is already a marketplace with plenty of providers. And in state schools, this means that the perception of larger class sizes might not be as powerful an argument for parents who are weighing up a move into private schooling.

Finally, the diversification of independent schools’ business models is a major contemporary trend. Things such as the expansion of provision at the lower or upper end of the age range, revision of admissions policy to reflect a growing SEND market, international franchising, moving from single-sex to co-education, and the M&A market are all incredibly buoyant. While these are positive developments, it does open up the potential for schools within close proximity of one another to step on each other’s toes.

A NEW APPROACH

We would argue that the time is ripe for a complete shift in independent schools’ thinking, and a move towards embracing modern practices of price management. At present, their thinking might be better described as approach-avoidance – heads in the sand. While independent schools are existentially dependent on fee revenues, any increase is communicated to parents with the tone of apology. This discomfort when facing the reality of price-setting has left the sector far more vulnerable to shocks such as an incoming Labour government than it need be.

“We would argue that the time is ripe for a complete shift in independent schools’ thinking, and a move towards embracing modern practices of price management.”

A specific fee elasticity report compiled by MTM offers a general overview of how schools across the UK may fare in the face of the threats outlined above, together with a bespoke analysis of data for each school set against the socioeconomic profile of its historic and current catchment areas, projected birth rates and number of competitors.

Using a sliding scale, each school’s senior management and governors can review a number of possible options for sustainable fee increases, backed by qualitative and quantitative data, in order to reach an informed understanding of the options available to them. We believe the security that evidenced fee elasticity research can provide for independent schools is an important component of business development for the sector at such a time of economic and political volatility – and can be used as a key plank in building a strategy based around behavioural price management.

CURRENT PRICING PRACTICE

Current pricing practices in the UK independent school sector was summarised by Independent Schools Plus as follows: “Historically, when setting their budgets schools calculate their costs... and then balance their budget by... increas[ing] their fees; but now this is so much more difficult. Schools have got to keep their fees as low as they possibly can as parents, facing many of the same pressures, can’t afford a material increase.”

This approach amounts to what academics and practitioners refer to as a ‘cost-plus’ pricing method. Prices are set so as to cover the costs of product or service delivery and the profit margin the provider wishes to make per unit sold. In a not-for-profit context, the aim is not to generate profits per se, but to create a surplus that can be put into reserves or reinvested into activities in support of the organisation’s mission. Consumer behaviour only enters the process as an afterthought at best – be wary of setting too high a price that drives customers away.

While academics and practitioners of price management acknowledge the importance of cost analysis in a pricing

process, they are quick to point out that cost analysis alone will not lead an organisation to sustained success: Hermann Simon and Martin Fassnacht have stated: “Products are [often] conceived, developed, and then priced on a cost-plus basis... As a consequence... some products are developed but... flop when they are launched. Ideally, companies should flip this flow around... The question ‘what should the product we just developed cost?’ [should be] replaced by the question ‘how much should the project we plan to develop cost?’ based on what buyers are willing to pay for it.”

For independent schools, whose revenues are almost entirely driven by fees, understanding what drives parents’ willingness-to-pay is a tremendous competitive and strategic advantage. But this can only happen if senior management and governors stop simply accepting the idea that parents can’t or won’t stomach fee increases as an article of faith. The degree to which fee increases will affect enrolment is an empirical question, and one that has been answered by market and economic analysts in a variety of different contexts – including the UK independent education sector –for some time now.

PRICE ELASTICITY OF DEMAND

The price elasticity of demand (PED) measures the sensitivity of demand to price changes. The least-inelastic items are those that are very hard to do without (electricity, petrol, housing) or are considered a staple item (eggs). By contrast, the most-elastic items generally consist of entertainment, leisure and travel experiences – things that people tend to consume less frequently.

Using proprietary data on school fees and administrative data on school enrolment and quality, we employ dynamic panel methods to estimate the price elasticity of schooling. Our estimates suggest that a 10% change in fees results in a 4.4% reduction in enrolment, all else held constant, and a 15% change a 6.6% reduction, which equates to 36,580 pupils.

While this 15% increase in fees would

“While it may be that keeping fees low is a reasonable course of action for some independent schools, the empirical evidence suggests that this may be one option among many.”

see turnover appearing to rise by 8.37%, given that the fee increase is a direct tax, the revenue therefore generated for the school is calculated as follows, resulting in a decrease of 6.6%.

The range of estimates of PED for private school run from –0.19 to –0.49. This means that demand for private schooling is as elastic as demand for beer and may be as inelastic as demand for electricity, roughly speaking. While it may be that keeping fees low is a reasonable course of action for some independent schools, the empirical evidence suggests that this may be one option among many.

DEMAND ELASTICITIES OF PRODUCT CHARACTERISTICS

While we cannot provide an extended discussion on this point for the sake of brevity, we will point out that there are often other demand-relevant characteristics for which one may wish to obtain a demand elasticity estimate (for example, quality).

Here, we measure the percentage change in demand in response to a 1% change in the characteristic Z. In the education setting, an important characteristic could be teacher-pupil ratios. Understanding the degree to which the market values smaller class sizes (as embodied in the class size elasticity of demand) can provide guidance for independent school leadership looking to understand how best to improve market position.

TOWARDS BEHAVIOURAL PRICE MANAGEMENT

First you need to brief and receive approval from your board. This request should outline the necessity and potential benefits of revising the current pricing approach, while emphasising that this initial phase is about gathering information and options, not committing to specific changes.

Then identify the strengths and weaknesses of your school. How do they compare and differ to those of your competitors? From this exercise, try to identify the most important dimensions of competition (price, test scores, teacher-pupil ratios, etc).

Research your target audience. From your assessment of market position, you should be able to define the segment of the market you best serve. Do you know what these parents are looking for? And what they value most?

Next, draft a positioning statement. This is a strategic tool that guides marketing and operational decisions, ensuring that all aspects of the school align with how it wants to be perceived by its target audience. It identifies your niche in the market and highlights what makes your school uniquely suited to serve it. The more clearly you identify the things that make you stand out, which parents value, the more effectively you can make necessary changes.

ANALYSIS AND STRATEGIC REVIEW

The next stage involves conducting a strategic review of school operations. You must assess whether anything identified above requires any changes to how you operate. For instance, you may realise that enrolment has been hampered by poor academic achievement relative to

competitors. As such, you would need to review educational resources (both teaching and technology). On the other hand, you may discover that what was once a highly-touted feature of your school – a flagship programme or activity – is not as valued as you thought, so you may decide to discontinue it.

You should also conduct a strategic review of your school fee structure. Analyse the fee schedule for different age groups to ensure that it aligns with your demand analysis. And review the school’s bursary policy.

IMPLEMENTATION

Finally, you need to implement a strategic price communications plan. You must develop a clear narrative that explains to parents why you charge the fees you do. In such communications, it’s generally advisable to avoid apologetic or defensive language. Instead, aim to be clear, transparent and confident, while still being empathetic and understanding of any concerns parents might have.

A bad example is something along the lines of: “We have tried to keep fee increases as low as we can, but the new Labour policy on VAT has forced our hand. We will try to help as many families as we can, but please understand that bursaries are limited.”

Instead: “In response to the recent changes in VAT policy, we have adjusted our fee structure to ensure that we continue to provide the highest standard of education. We understand that any fee increase can be a concern. As such, our bursar’s office is always available to discuss bursary options and requests for financial assistance etc.” is so much better.

Duncan Murphy is the director of education for MTM Consulting.

special focus | cash flow from fees

Keep the money flowing

Stewart

Ward examines the impact of household cash flows on your school’s cash flow

During these uncertain times, schools must safeguard their income. Collecting school fees in a timely and efficient manner is a top priority for bursars and finance teams to maintain a steady cash flow; failure to do so can lead to long-lasting negative consequences.

School fees can be a significant expense for parents, especially with the current high cost of living. Careful budgeting is necessary to fund a child's education at an independent school. The cost of privately educating a child from reception to A-levels is an average £355,516 in a day school rising to £514,594 if they attend a day school to 11 and then board.

AFFORDABILITY

What percentage of parents currently paying their children’s school fees are juggling their finances, or may struggle in the future? The numbers experiencing some challenges in paying may be higher than you think. The current economic environment is hitting parents hard.

Findings from the Independent Schools Index indicate that nearly a third (31%) of parents believe affording fees will become much harder in the future, while 28% believe paying fees will become slightly harder. This is a major consideration for independent schools throughout the UK. School fees are typically their primary source of revenue – any change in cash flow could significantly affect the way a school runs.

“Around half (48%) of headteachers, bursars and finance managers are very concerned about a rise in children leaving their schools because their parents can’t afford the fees.”

Consistent income from fees ensures financial stability, allowing schools to cover operating expenses, run smoothly, and flourish.

HOW ARE PARENTS COVERING SCHOOL FEES?

The Index findings indicate that 47% of parents admit to relying on financial support from family to meet school fees, with grandparents the biggest source of funding. Nearly four out of five (79%) who receive family support say grandparents help with some of the fees, while 38% say some help comes from aunts and uncles.

Pressures on household income creates tension and concern, particularly when it comes to funding big-ticket items like school fees. 42% of parents are paying in excess of 15% of income with some paying over 50%. 48% are paying somewhere between 5% and 15% of income.

SCHOOL CASH FLOW CONSTRAINTS AND PUPIL DEMAND

So what does this challenge on household cash flow mean for schools? Around half (48%) of headteachers, bursars and finance managers are very concerned about a rise in children leaving their schools because their parents can’t afford the fees.

Affordability could become a wider concern if political changes take place following the upcoming general election. VAT could be added to school fees

heaping more financial pressure on parents and on schools relying on this income.

Already, more than four out of five (83%) say their schools are spending more time chasing parents for payment of fees. The future demand for bursaries and hardship funds will not be able to fill the gap.

THE IMPORTANCE OF MAINTAINING INCOME FROM SCHOOL FEES

Financial stability is key to the day-to-day running of an independent school, but what else can be affected?

Quality of education – timely funding from school fees enables independent schools to provide the ongoing, highquality and comprehensive learning experiences the sector’s schools are renowned for. A robust and steady

Stewart Ward

“Spreading the cost of school fees over convenient payments is becoming a ‘go to’ option for parents.”

income from fees allows schools to invest in small class sizes, highly qualified teachers, modern facilities, technology integration, and enriching programmes, all aspects which attract future generations.

Autonomy and independence –independent schools rely on tuition fees to maintain their autonomy and independence from government funding or oversight. This financial independence grants schools the freedom to develop unique educational philosophies, curricula, and teaching methodologies tailored to their mission and the needs of their students.

Competitive advantage – a stable income from school fees allows independent schools to remain competitive in the education marketplace. It enables schools to attract and retain talented faculty and staff, upgrade facilities, offer scholarships and financial aid, and invest in innovative educational programmes and resources that distinguish them from other schools.

Long-term planning and development – reliable income from school fees allows independent schools to engage in long-term planning and development initiatives. It enables schools to make strategic investments in infrastructure, technology and professional development that support their mission and ensure continued growth and improvement over time.

These points will be familiar to you all. Maintaining income from school fees is crucial for the sustainability, quality, autonomy and competitiveness of independent schools, enabling the

cash flow from fees | special focus

fulfillment of educational missions and providing an exceptional learning experience for pupils.

These are all thought-provoking points and will resonate with leadership teams in different ways, but whatever your situation, school fees need to remain affordable to parents so valuable income to schools can be maintained.

HOW CAN THIS BE ACHIEVED?

Payment plans are an increasingly popular option among parents allowing them to pay annual school fees in convenient, more affordable monthly payments rather than having to meet the cost in one, large termly or annual lump sum. A 0% option can also be offered to parents.

Parents paying fees in instalments benefit from:

• Spreading school fees and extras like music lessons and school trips over monthly payments (up to 12 months), maximising their monthly disposable income.

• Certainty of outgoings with monthly repayments accurately tracking their termly bills.

• Competitive transaction fees.

• Discreet, simple, paperless online application with an immediate decision.

• No need to reapply each year. Once set up, an instalment plan can run automatically until parents choose to leave the scheme.

• Rates can be fixed for the academic year with no penalties for early exit; parents can leave at the beginning of any term. An instalment facility is also a smart way for schools to secure income too. Participating schools can receive fees in full at the start of each term directly from a lender, helping to maintain a strong cash flow.

Schools can also benefit from:

• Reduced administration and costs. Parents can apply directly to the lender.

• Reduced regulatory risk; the lender takes responsibility for regulatory compliance.

• Reduced bad debts and debt management costs.

• Potential to increase pupil access to your school.

• Improved cash flow freeing up cash tied up in in-house schemes to invest in vital capital projects.

• Opportunity to receive the academic year's full fee funding in one amount in either September or October.

PAYING SCHOOL FEES –THE FUTURE

Spreading the cost of school fees over convenient payments is becoming a ‘go to’ option for parents. It’s widely used from an affordability and efficiency perspective and for schools it provides a smooth, reliable, and regulatory-compliant cash flow. In the current climate, the parents we have spoken to are keen to better manage their finances and are interested in new payment solutions, even though they may be too concerned to tell the school.

The consequences of financial failure or underfunding are hard to contemplate for any school but must be considered. Creating a strong financial environment is critical – an outsourced school fee finance facility is a strong option to achieve this.

The Independent Schools Index is a School Fee Plan project that examines the economy and the impact it is having on how parents from across the UK pay for their children's school fees. Areas covered include the cost, financial pressure on parents and how they fund school fees.

“The consequences of financial failure or underfunding are hard to contemplate for any school but must be considered.”

Stewart Ward is director, education sector and head of School Fee Plan.

Advance warning

Susie Luckman says fees in advance schemes can help parents combat the VAT threat

With each new opinion poll and by-election result it’s clear that political change is coming to the UK and independent schools should be planning for a Labour government to come to power later this year, or no later than January 2025.

At the time of writing, one of the few clear policy intentions of the Labour Party is to remove the exemption from VAT currently enjoyed by schools and parents alike in relation to school fees. The stated political aim is to raise tax revenue and apply it to improve the statefunded education sector and there’s every indication that Labour is committed to this policy.

There are seemingly good arguments against the imposition of VAT, including that the tax revenue raised will be less than Labour expects and that there are hardly any examples elsewhere in the world where governments have chosen to tax the provision of private education. The Independent School Council continues to lobby on behalf of our sector, but at the time of writing there seems to be little hope that the lobbying will be successful.

PLANNING FOR VAT

Technically it is uncomplicated for a government to remove the exemption that is currently enjoyed. While nothing is certain in politics, it is recommended that independent school leaders plan for a future where VAT is added to school fees.

In this context, school leaders should

“While nothing is certain in politics, it is recommended that independent school leaders plan for a future where VAT is added to school fees.”

be taking steps now to understand what the impact of VAT would be on their business model. The removal of the VAT exemption that will require a 20% VAT charge to be added to fee invoices will enable schools to recover previously unrecoverable VATable expenses such that the net impact to the school business will be less than 20% – but the net impact rate varies between schools according to how much of their expenditure incurs recoverable VAT.

However, with parents facing a VAT charge and consequently higher costs to pay for the education of their children it is to be expected that pupil numbers will come under pressure, particularly at the usual entry points, so schools should also be taking steps now to build resilience and optimise the financial performance of their schools. With the support of VAT specialists, some complex tax planning may be possible for some schools – but with the new tax law yet to be drafted, no such schemes are certain to be successful.

FEES IN ADVANCE SCHEMES

Some parents will also be considering ways of potentially reducing their future tax bills. The same uncertainties apply to their tax planning, but one option for parents may be to pay fees for future years in advance and to do this now such that a ‘tax point’ occurs while the current VAT exemption still applies.

It is expected that a change to the VAT rules would occur quickly after a Labour government takes power, with VAT likely becoming applicable from September 2025. However, the window of opportunity to pay fees in advance on the basis of the current VAT exemption is likely to be much smaller than that, because a future government will have the option of making ‘antiforestalling’ legislation to take effect almost immediately after the results of the election are announced.

Fees in advance (FIA) schemes are not new. For decades, schools and families have made use of flexible fee-paying

options to help spread or consolidate school fees to fit with parents' financial situations. It is not unusual for parents and grandparents sometimes to want, and be able, to pay up front for future years education. The incentive to do so may be to reduce a future Inheritance Tax bill, or to provide the peace of mind that their children's or grandchildren's education has already been paid for.

Schools are likely to be minded to accommodate such requests – it helps with long-term budgeting to have commitment for future years education and, depending how the scheme has been set up, helps with cash flow – and schools will often therefore offer a discount to encourage fee payers to pay in advance.

However, existing FIA schemes –drawn up when the potential for VAT to be added to fees was not contemplated –may not be effective for current purposes. There are a number of features an FIA scheme should incorporate to give it the best chance of success at offering interim relief from VAT on school fees – and to be an effective and clear contract between the payer and the school, reducing the potential for future disagreements. These include establishing a clear ‘tax point’ at the point at which the funds are received by the school, the school having exclusive ownership and unfettered use of such funds and a clear contractual relationship with the payer. It need not be set at a high level, but it is also recommended

Susie Luckman

advance

“Care should always be taken when discussing with parents how a FIA scheme may be affected by the potential removal of the VAT exemption currently enjoyed.”

that a discount is applied to future fees to demonstrate that the incentive for parents to enter into the FIA scheme is not simply to avoid future VAT.

A modern FIA scheme should dovetail with the parent contract and take account of the broader aspects of school life, such as scholarships, absence due to sickness, discount rates, regulatory issues and statutory rights.

Care should always be taken when discussing with parents how a FIA scheme may be affected by the potential removal of the VAT exemption currently enjoyed. It’s important schools don’t promote FIA schemes to parents for

this one purpose, or over-promise their effectiveness at protecting against a change in the VAT exemption.

With an election due to be called this year, the window of opportunity for parents to pay in advance, potentially avoiding a future VAT charge, is closing fast. Schools can facilitate such arrangements, but care and thought is needed to ensure that an FIA scheme works effectively for both fee payers and the school and avoids the risk of future disagreement.

Susie Luckman is a legal director for law firm VWV.

Trading places

With growing economic pressures on parents paying school fees, schools need to maximise their income. John Foskett advises on setting up a trading subsidiary

You may be considering implementing a trading subsidiary, or possibly already have one set up at your school, but are unsure why it’s there. A trading subsidiary can be set up for several reasons including protecting your school’s assets from commercial risks or to shelter profits from non-charitable trading.

A trading subsidiary that was set up to minimise Corporation Tax could inadvertently lead to costly implications across other taxes, as well as opening up risks to maintaining strong governance.

WHAT DOES THE SCHOOL PAY TAX ON?

Due to their charitable status, the majority of independent schools have exemption from Corporation Tax on any income arising from undertaking their ‘primary purpose’ activities. These will be those activities set out in the charity’s objects. The charitable objects of the school may not have been reviewed for a number of years and could be restrictive in what is permitted, for example, being limited to a particular geography or class of beneficiary, so it’s important to check what falls within them before commencing a new venture.

Likewise, Corporation Tax is not due on income from activities that are ancillary to the primary purpose, such

“Due to their charitable status, the majority of independent schools have exemption from Corporation Tax on any income arising from undertaking their ‘primary purpose’ activities.”

as student accommodation, books, uniforms etc. In addition, income arising from property held by the school, such as rental property, will not be subject to Corporation Tax where the profits are reinvested back into the school’s primary purpose and while additional services (for example, the provision of staff) are not provided to the tenant.

Non-primary purpose trading turnover of up to £80,000 per annum can remain within the school without adverse tax implications, although there may still be risk management or governance reasons why the charity would want these activities to be ring-fenced into a separate company.

WHAT HAPPENS IF YOU NEED, OR WANT, A SUBSIDIARY?

An alternative way of trading would be to put in place a trading subsidiary that could carry out the non-primary purpose activities. The profit that the subsidiary realises from these can then be paid up to the school under charitable donation provisions. The trading subsidiary does not pay Corporation Tax on any profits donated to the school, and no Corporation Tax will be due from the charity on the donations that it receives.

WHAT ABOUT OTHER TAXES?

Although a trading subsidiary may result in Corporation Tax savings, the trading subsidiary will not benefit from all of the same charitable exemptions that the school currently does, such as in relation to VAT.

A charity is usually an eligible body for the provision of education and provision of sport for VAT purposes, therefore it can treat such supplies as exempt and no VAT needs to be charged on the income under the current rules. It is likely that schools will be required to account for VAT on fee income if the Labour Party forms a government and this may be legislated for by removing independent schools from the definition of an ‘eligible body’.

An off-the-shelf trading subsidiary is not generally an eligible body for the provision of sport or provision of education in the same way, meaning VAT normally needs to be charged by the trading subsidiary. Given that a usual example of trading in a subsidiary is the provision of sports facilities to third parties, which will likely be supplied to organisations and individuals that cannot recover VAT, there will be a commercial implication to moving these sorts of activities out of the school.

However, with proper planning it is possible to extend the VAT exemption to many of the income streams generated by a trading subsidiary. This typically requires a careful review of the subsidiary’s Memorandum and Articles of Association as well as how it is to operate in practice. Regular reviewing of what’s happening ‘on the ground’ is key here to ensure that the original carefully implemented planning has not been eroded with the passage of time and this often forms a central part of any HMRC compliance checks.

HOW WILL THE SCHOOL AND COMPANY INTERACT?

In order to protect the charitable assets, the trustees will need to be confident that there is a robust rationale for allowing the subsidiary to use the charity’s premises, staff, resources etc. This will mean that

John Foskett

“In order to protect the charitable assets, the trustees will need to be confident that there is a robust rationale for allowing the subsidiary to use the charity’s premises, staff, resources etc.”

consideration needs to be given to the school allocating and recharging relevant direct and indirect costs to the subsidiary, for example by entering into formal lease agreements for the use of property.

Charges to the trading subsidiary from the school for use of its facilities, staff and other assets are, by default, subject to VAT unless specific planning arrangements (such as dual contracts of employment) are put in place. This applies regardless of whether any profit is realised or intended. However, if a profit is realised, under the Corporation Tax rules this is likely to be taxed as nonprimary purpose trading profit in the hands of the school.

A potential solution to the additional VAT costs is to set up a VAT group

registration that includes both the school and the trading subsidiary. This would allow charges between the entities to be disregarded for VAT purposes. This needs proper consideration before implementing to ensure no unintended consequences arise, for example reducing the right of the trading subsidiary to recover VAT that it incurs.

While VAT has been a significant factor when considering whether to incorporate a trading subsidiary in the past, if VAT becomes due on school fees this will reduce its importance in this area as schools are likely to have a right to recover the VAT incurred on charges from the trading subsidiary. Although it is usually the Corporation Tax or risk issues that drive the use of a trading subsidiary, there may be particular instances where there are VAT benefits to using a trading subsidiary. Specialist advice should always be taken before implementing these types of arrangements.

ARE THERE ANY NON-TAX ISSUES?

There are a number of governance issues that must be considered before setting up a trading subsidiary and a few are noted below, although this is not by any means an exhaustive list.

The charitable donation payments from the trading subsidiary must be actually paid over to the school. Therefore, it is

important that the school and trading subsidiary have separate bank accounts so that the transaction can be seen to have taken place.

Under the Companies Act, it is unlawful to make distributions in excess of distributable reserves, therefore needing to ensure that the trading subsidiary has sufficient distributable reserves at the time the charitable donation payments are made. This has proved challenging during the lockdown period when subsidiaries have not been able to generate income and is an issue that can be difficult to resolve simply.

The Charities Act reiterates that the trading subsidiary must be financially viable in its own right: the school cannot support the trading subsidiary through donations, gifts or services in kind or by settlement of debts. Particularly during the initial set-up, how the subsidiary will fund its cash flow requirements will need attention to ensure compliance with charity law and to ensure you do not fall foul of unexpected tax consequences.

Not every school will need a subsidiary company but where you determine that you do, a holistic approach to its operation needs to be taken to ensure that charity law, tax and governance issues are proactively addressed.

John Foskett is a partner at business advisor RSM.

Trade mission

THE SCENARIO

Your bursar reminds you that you are a director of your school’s trading subsidiary. You realise that you have never been asked to attend any board meetings, which is surprising, especially given the subsidiary is involved in letting out the school’s facilities. The main hall is used by a kids’ dance club on Saturday mornings, the gym is let out to local business people over the holidays and the boarding house is used in the summer by a group of Italian students learning English. Some of the subsidiary’s activities don’t appear to be charitable but you’re not sure whether this matters. When you speak to the accountant on your governing body, she explains that there are often tax advantages to using a trading subsidiary, but their use (and ongoing operation) gives rise to various governance and compliance considerations.

WHAT SHOULD YOU DO?

Option 1

You chat to a fellow governor who is also a director of the subsidiary and, following a quick look at the recently filed group accounts for the school, you are both struck by how much the school’s fee income is supplemented by the funds raised from the subsidiary’s activities and agree that this income stream is critical to the school’s cash flow. You decide, therefore, to encourage the bursar to grow this income stream as much as

“Letting out facilities during the school day can not only change the atmosphere in a school but can also present some thorny safeguarding and security issues.”

feasible and to explore the option not only of letting out the school’s facilities during the holidays but also letting out vacant facilities during the weekends and school days.

You also spot from the accounts that it’s sometimes the school, as opposed to the subsidiary, which is letting out the school’s premises, including letting the main hall for business conferences. These conferences appear to be quite lucrative and you don’t think it matters whether it is the school or the subsidiary letting out premises – after all, they are both part of the same group and have the shared aim of supporting the school.

Option 2

You are not clear who has day-to-day responsibility for compliance matters in relation to the subsidiary and this isn’t something that has been discussed at governing body meetings. You fix up a meeting with the school’s head of estate management to get to the bottom of the matter.

Option 3

You speak to your chair and agree that the trading subsidiary should be included on the agenda for the next governor’s meeting so that the governing body can agree how it should be run and what its purpose is. You suggest that all the governors should be appointed to the subsidiary’s board so that everyone can be involved and understand the arrangements.

WHICH IS THE BEST OPTION?

Option 1

It is sensible and common to make use of a school’s estate to supplement its fee income. Care should be taken, however, to ensure that this does not comprise the use of the school by its pupils; letting out facilities during the school day can not only change the atmosphere in a school but can also present some thorny safeguarding and security issues.

In addition, where the use of a school’s

estate amounts to non-charitable trading activity, this can lead to a Corporation Tax liability. However, if the trading is undertaken by the school’s trading subsidiary, the subsidiary can make a tax-deductible gift aid payment to the school of the trading profits. There are also charity law and ring-fencing of risk reasons for housing trading activities in a subsidiary.

In this ‘option 1’ scenario, the school is letting out its hall for business conferences, a non-charitable trading activity, and it would make sense for this arrangement to be routed through the school’s subsidiary.

Notwithstanding the potential benefits of using trading subsidiaries, they do bring with them additional governance and compliance obligations, and the cost and resources required to meet these should not be underestimated. This is particularly the case where the total trading income anticipated for the year falls below the small trading threshold of £80,000.

Option 2

You are right to raise this matter of compliance but (from a governance perspective) this matter should, in the first instance, be raised with your fellow directors, and then with the bursar/clerk to governors, rather than with the head of estates management.

Alice Unwin sets out a scenario of possible responses for a governor to consider as a result of a school’s trading subsidiary

Alice Unwin

Option 3

“Welcoming external visitors and groups onto a school’s grounds has its financial and PR benefits, but care needs to be taken to ensure that appropriate procedures are put in place.”

Welcoming external visitors and groups onto a school’s grounds has its financial and PR benefits, but care needs to be taken to ensure that appropriate procedures are put in place, in particular with regards to health and safety and safeguarding matters.

In addition, any associated personal data collected by the school will need to be processed and stored in line with what are relatively stringent data protection regulations.

You are correct to ensure the governance and operation of your school’s subsidiary is in order and for the full governing body to understand the school’s relationship with its subsidiary. The two entities do, however, need to be independent from each other, in particular:

• The board of the subsidiary should not mirror that of the school, as the trading subsidiary’s directors have the same statutory duty to exercise independent judgment and act only in the best in interests of their company, as the governors do in relation to the school. The subsidiary should have its own cycle of board meetings, although it is sensible for this to coincide with the meetings of the school’s governors.

• The school should not subsidise its trading subsidiary; any funding of the subsidiary should be on an arm’s length basis with interest charged at market rates.

• The right for the subsidiary to let out the school’s facilities should be clearly documented in a licence agreement.

SUMMARY

Letting out school facilities can not only provide important income streams for schools but also contribute to public benefit plans. Notwithstanding this, unless both the governing body and trading subsidiary board put in place and maintain appropriate governance and operational arrangements, schools risk exposing themselves to negative tax and charity law consequences.

Given the ongoing affordability crisis and the VAT and business rates relief threats looming on the election horizon, schools are under more pressure to diversify and bolster their income streams. Trading subsidiaries play a key role here, but they need to be operated appropriately; now is as good a time as ever for your school to review its corporate governance arrangements and documentation with its subsidiary.

Alice Unwin is a legal director in the charities and education team at BDB Pitmans.

An inspector calls

Durell Barnes discusses the implementation of the Independent Schools Inspectorate’s new inspection framework and highlights what to watch out for

It is important to remember the function of an inspection framework.

It is there to provide assurance to government, to parents and other stakeholders that schools are complying with requirements and providing highquality education (in terms of teaching and learning, pupil achievement and wellbeing). It is also there to provide assurance to schools that they are being inspected against consistent standards and that the outcome of inspections –reports – provide a proper endorsement and recognition of the work undertaken by school governors, leaders, managers and support staff.

And at this particular moment, after Ofsted and ISI inspections were put ‘on pause’ for special training relating to mental health awareness, we should remind ourselves that inspection is not supposed to be about fear and that in an ideal world, inspection is something which is undertaken with schools and not done to them.

But inevitably, schools will want to put their best face forward and so I’m going to suggest some things which they might want to watch out for. And I’d argue that the inspectorate will want to put its best face forward as it implements the new framework – and there are some things the inspectorate might want to watch out for.

WELLBEING TO THE FORE

It’s worth pausing to remember the context of the new framework which comes in the wake of growing

“Inevitably, schools will want to put their best face forward and so I’m going to suggest some things which they might want to watch out for.”

Department for Education emphasis on wellbeing arising from significant societal trends including the issues arising from the Independent Inquiry into Child Sexual Abuse, Everyone’s Invited and Black Lives Matter.

Successive chief inspectors have worked with the sector towards the improvement of the inspection of wellbeing with the emphasis they have chosen to prioritise during their tenure: Dame Christine Ryan ensuring the rigorous inspection of safeguarding in schools, Kate Richards focusing on the voice of the child, and Vanessa Ward putting the 2004 Children’s Act definition of wellbeing at the heart of this framework.

There was an extensive consultation on the framework, as there is about to be on the complaints procedure, and during this the ISI outlined the values and principles which underpin the framework. These are not all new, but it’s good to have them clearly articulated. Where schools are most likely to feel the changes on the ground is in terms of manageability – they are required to produce much less before an inspection than they used to be (indeed the old ISI portal has been closed) – and in terms of collaboration – they are likely to find that school leaders can accompany inspectors on health and safety walks, or to lesson observations, or to be involved in work scrutiny. Anecdotal evidence (we rely on anecdote because the delay in publication of reports means that orthodox QA procedures are not yet in process) indicates that where teams are confident, the inspection experience is not dissimilar to previous frameworks, and inspectors are interacting extensively with teaching and support staff and pupils and engaging with a considerable range of documentation to ensure compliance both in terms of policy and implementation.

Where schools will see a significant difference is in reports. Definitive conclusion cannot yet be drawn as (at the time of writing) only a couple of dozen reports have been published. The

structure of reports was amended in light of the consultation with the sector. And we know that there are no ‘aspect’ judgements. So, no use of ‘excellent’ or ‘outstanding’ under the old headings of pupil achievement and personal development. However, published reports indicate that the word term ‘good’ is still prevalent, featuring on average nine times per report (usually in relation to achievement and progress). ‘Effective’ has become a common adjective, featuring on average 13 times per report – but no criteria exist for the use of these qualitative adjectives.

GETTING IT RIGHT

Compliance with the regulations is reported under each of the sections, rather than separately. Approximately one-fifth of reports published so far have regulatory failings, but it is evident that inspectors have exercised ‘proportionality’, that is, exercised leeway when minor matters have arisen which were easily rectified. However, such ‘near misses’ are recorded in reports and governors will want to continue to reassure themselves that leaders meet the requirements of Part 8 of the Independent School Standards Regulations (ISSR).

Strengths of schools are implicit in reporting, but the coveted ‘significant strength’ has been identified in only a few reports so far. This is causing some

Durell Barnes

alarm in schools within a sector widely recognised as among the beat in the world, and an impressive export for UK plc.

THE RIGHT ORDER

In terms of the priorities of inspectors, when schools are seeking to put their best face forward, there are certain things they should watch out for.

First, the changed focus on leadership and governance. It’s important to acknowledge that the ISI has, after the consultation, confirmed that it fully appreciates the distinctions between the functions of leadership and management on the one hand, and governance on the other. But it’s also important that school governors and leaders appreciate that the whole inspection is undertaken through the lens of Standard 8 (the quality of leadership of and management in schools). If you were in any doubt about that, let me tell you that in the reports published so far ‘governor’ or ‘proprietor’ appear on average 11 times and ‘leader’ or ‘leadership’ appears on average 55 times. The framework is explicit: it “places the responsibility of the school’s leadership and management and governance to actively promote the wellbeing of pupils at the centre of ISI’s evaluation of the school”; and don’t forget that, as under previous regimes, “leadership and management refer to leadership throughout the school and does not refer only to senior leadership”.

Management of risk is a major focus –‘risk’ appears on average 10 times in each of the reports published so far, but there are some phrases that all schools should note and think on: “Leadership must safeguard and promote the wellbeing of all pupils through effectively identifying risk of harm and take appropriate action to reduce risks which are identified” and “Leadership should have the appropriate skills and knowledge to ensure that they appreciate the prevalence of potentially harmful behaviours and therefore do not consider avoidable harms unavoidable”.

CULTURAL LIFE

As heralded by the ISI, there is an explicit focus on the culture of the school. In training materials we are steered directly to research emanating from Harvard on “what makes a good school culture” (put simply, it is about the aims and ethos of the school, how they affect decision-making and what the impact is on the ground). By the way, this is not the only ‘set book’ which appears in the framework and schools should familiarise themselves with this and the others –we haven’t had references to anything other than statutory documentation before. They include What makes a good culture? from the University of Harvard, The Good Childhood Index, published annually by The Children’s Society and the Gatsby Foundation’s Gatsby Benchmarks, as well as The Magenta Book, published by HM Treasury – but I have yet to meet anyone who has read this.

PUPIL VIEW TOO

Another subtle change is the explicit promotion of a particular approach:

“The inspection framework promotes the active seeking of pupils’ views as part of the day-to-day life of the school”. Schools are getting much better at securing the views of pupils (and other stakeholders, including parents and teachers) and at sharing them with governors, although they are not always as good at evidencing what they do as a result or feeding back to those consulted. It is evident from reports that the ISI commends schools which base action plans on ‘dynamic’ self-evaluation which has included consultation of pupils (and parents and staff).

Schools seeking to put their best face forward will recognise that while outcomes for pupils are the inspectorate’s main focus, reports are written with the inputs into these at the fore, that is, judgements are about whether governors and leaders act effectively to ensure regulatory compliance, including in terms of pupil achievement, and the wellbeing of pupils.

THE RIGHT LOOK

As I stated earlier, at the outset of a new framework, the inspectorate will want to put its best face forward too. We can see that clearly in the way in which the new chief inspector at Ofsted is operating in his new role. The ISI will want to think about whether it is reasonable to identify only rarely ‘significant strengths’ in such a successful sector. And it will be important to ensure that no additional requirements which go beyond what is necessary to comply with the regulations ‘creep in’, for example, as a result of recreation and health being part of the inspection framework. The ISI will want to preserve the primacy of the judgements of its highly qualified and experienced inspectors on the ground (who should in my view be named on reports as they are with Ofsted). It will want to make sure that reports, largely stripped of anecdote and judgement words, are meaningful and helpful, especially to parents.

It is also important that the ISI doesn’t become too distanced from its schools. There is no apostrophe in Independent Schools Inspectorate because the inspectorate does not belong to the schools. And the inspectorate must be independent and able to inspect without fear or favour. But as the wellbeing of pupils is the key priority of the inspectorate and of the schools, they should be working in conjunction. That doesn’t just mean that the inspectorate should be listening, although that’s important and it’s great when it does. But it should, above all now, be approachable and willing to assist schools in ensuring that it is doing what’s required. Much thought about how to do that is required given the withdrawal of the regulatory commentary and the helpline for schools.

Durell Barnes is head of governance and compliance at educational consultant RSAcademics.

The right choice

Schools, in common with other organisations, depend on good information and streamlined workflows in order to carry out their work effectively and to help staff make better decisions. In the drive for more efficiency and effectiveness, good technology can bring huge benefits – but also huge risks. Finding the right software solutions – and the right suppliers – for your school can be a challenge. However, with the right approach to technology procurement, you can avoid the pitfalls and make sure you get the most from your investment.

IT’S NOT REALLY ABOUT THE SOFTWARE

The key to successful software selection is to realise that the software itself – what it can do and how it works – is often less important than the choice of supplier (or ‘implementation partner’). Of course, functionality, performance, ease of use and many other technical considerations are important and you will need to take them all into account. You also need a strong governance framework and a business case that articulates the expected benefits. However, in the end it will be the quality of your relationship with your supplier that will determine the success – or failure – of the implementation. A good supplier can make a poor system work for you, but even the best software will be ineffective if your supplier doesn’t understand you or your requirements.

In fact, software selection should be seen not so much as a conventional exercise in procurement but as a test of a supplier’s approach and ability to work effectively with your school. It’s more like a collaborative partnership than an armslength, transactional purchase of goods and services – and the level and style of due diligence needs to reflect that.

A MORE ADAPTIVE APPROACH

Particularly when it comes to large software solutions, like a school Management Information System (MIS), the hard reality is that many of

these projects fail to deliver the required benefits. This isn’t because suppliers are malevolent or go out of business during implementation or because the software doesn’t actually work, the real risks are that the supplier you choose doesn’t understand or value your business, or that the way it works doesn’t fit with your organisational culture. So, how do you avoid those risks in your software selection?

The answer is to find ways to bring your potential suppliers as close to you as possible – the opposite of most procurement processes, which keep suppliers at arm’s length. You need to invite the suppliers you’re really interested in to spend more time with you, talking about what you are trying to do, so that they can understand your requirements and so that you can get a sense of what it might be like to work with them.

Try to resist the temptation to outline all your functional requirements at the outset. Experience shows that what you will really need from a new system – whether a school MIS, finance system or any other type of IT solution – tends to become clearer once you’ve learnt more about it (or, indeed, have started to see it taking shape during an implementation). Most suppliers today welcome an invitation to understand more about your objectives, the challenges you are seeking to solve, and the improvements you want – but they can only do that by engaging with you properly up front. By moving from asking suppliers to respond to prescriptively-written requirements specifications, to engaging them in meaningful solutions-focused dialogue, and by focusing on the ‘what” rather than the ‘how’ in any brief you give to them, both you and the supplier will get more from the process.

A structured evaluation process, with clarity around your objectives/high-level needs and budget, and sufficient rigour when it comes to matters such as due diligence and obtaining written proposals remain important, of course, We’re not advocating here for ‘doing everything verbally’ or letting the sales people take control of the process, but moving more

towards an approach where a long-list of potential solutions is whittled down quickly through a process of a ‘light-touch’ brief which focuses on your challenges and aspirations, with early two-way dialogue with suppliers about their potential fit. This enables more effective use of both your time and the supplier’s, The supplier gets to spend less time responding to lengthy tenders or briefs that it’s unlikely to win, and you more quickly ‘get to the point’ with the suppliers that really are likely to be a good fit.

The process can still comply with any procurement rules you might have – it’s still perfectly compatible with obtaining ‘three written quotes’ or suchlike. However, by shifting where you focus your time and efforts during the procurement process, you give yourself the option of spending more time on deeper

“Most suppliers today welcome an invitation to understand more about your objectives, the challenges you are seeking to solve, and the improvements you want.”

Paul Sypko outlines how to achieve effective procurement of information communications technology software in schools

Paul Sypko

conversations with the ones that are likely to be the better fit. Our experience is that suppliers prefer this approach, too. It gives them the opportunity to differentiate themselves by showing the value they can bring, over and above what you might otherwise ask for. It enables them to bring their own ideas and solutions, giving you a feel for how they really tend to work in practice (rather than mere confirmation that – on paper, at least – they’re able to satisfy a prescriptive set of requirements); and they get to spend more of their time showing you what the solution would really look like for your school in practice, so that you and they both know whether it’s likely to be a good fit, before they invest considerable amounts of time in writing a detailed proposal or tender response.

MAKING IT REAL

Depending on the likely contract value, you can often persuade prospective suppliers to demonstrate their systems based on your own business processes or desired ways of working. This is a great idea – generic demos are often helpful, but nothing engages users and ‘brings a system to life’ quite like seeing it used to do exactly what you will in due course want it to do. This type of activity needn’t be complex or time-consuming, though it will involve the suppliers – and you – in a bit more effort than a conventional demonstration.

These seven simple steps can lead to a successful software selection:

Step 1. Set up an appropriate governance framework. Software selection is a project and you need an appropriate framework to manage it. Make sure you involve the right people – a common reason for software projects failing is that assumptions are made about what people need or want, and they fail adequately to engage the people who will later have a say in whether it’s been successful or not. Engaging users in the procurement process is as much about change management and securing their engagement and commitment to what follows, as it is about assessing options.

Step 2. Establish the rationale. You need to be clear about the business benefits of the proposed investment.

Step 3. Identify the key business processes to be supported and confirm the scope. The main purpose of any new system is to support your business processes, so it’s crucial to be able to define those.

Step 4. Prepare an outline brief and invite a long-list of potential suppliers to say how their software might support those processes and what that might cost. Rather than keeping them at arm’s length, invite them to discuss your objectives and even show you, generically, the software – albeit with the understanding that they’ll still need to give a short written response to your brief.

Step 5. Based on the information gathered during the previous stages, shortlist the suppliers down to, say, just two. Invite them to come and present to you; ask them to show you how the software could work in your particular school and how it would help you to achieve your objectives. Structured demonstrations, based on your own specific documented processes, can be hugely helpful with this. Invite them to come in and ask questions as they prepare for the demonstrations; encourage users to spend as much time with the suppliers as possible so that you can check how well you work with them.

Step 6. Take up references and carry out due diligence.

Step 7. Finalise your choice and – at that point – sit down with the preferred supplier to agree your detailed requirements and the associated contract. This more adaptive approach certainly involves more time and effort – but is worth it in the end.

Paul Sypko is a partner at business management firm Adapta Consulting.

Available on request

Last summer saw a slew of headlines linked to information being obtained via subject access requests (SARs). Whether it was Nigel Farage’s request to Coutts, the shadow education secretary’s repeated requests to the Independent Schools Council, or Nadine Dorries’s refusal to resign until she received a SAR response from the government, the use of a SAR (or at least its media exposure) seems to be on the rise.

The statistics published by the Information Commissioner’s Office (ICO), the regulator for data protection, seem to back this up. From April 2022 to March 2023 the regulator received 15,848 complaints related to SARs. This accounts for 37% of all data protection complaints received by the ICO and includes complaints made about how independent schools have dealt with SARs.

When I speak to school staff about their experiences of dealing with subject access requests there can be little positive to say. A frequent word I hear used to describe a SAR is that it is a “nightmare”. I can see why. By the time a school contacts me for advice they may have gone to great lengths to retrieve a colleague’s data that has been requested. They may have started to trawl through reams of school records and emails or are dreading the prospect of doing so.

Not only that, but SARs can be illtimed. They are often received when a school already has plenty on its plate dealing with the same colleague who, for instance, has also raised a grievance or issued a tribunal claim. It may also

“When I speak to school staff about their experiences of dealing with subject access requests there can be little positive to say.”

be received just before or during school holiday periods.

BACK TO BASICS

Let’s take a step back to understand what a SAR is. It is a request made by any individual to an organisation, including schools, for access to their personal data that may be held by the organisation.

SARs have existed in data protection law for decades but the UK General Data Protection Regulation (UK GDPR) and the Data Protection Act 2018 have strengthened this right of access. Requestors no longer have to pay to make a SAR and there is more focus on organisations being open with individuals about their data rights. This may explain why SARs are on the increase.

Nowhere is this rise more apparent, at least anecdotally, than when it comes to requests for staff or HR data. Readers may be aware of colleagues past or present asking their school for their personal data. This could be HR records, sickness and attendance records and performance and disciplinary records. It also extends to CCTV footage, internal school emails and social media messages, to name a few examples.

Schools can also receive requests from job candidates, particularly those that didn’t get the job and want to dig into why not.

ICO GUIDANCE

In light of the number of ICO complaints it’s perhaps unsurprising that the regulator has said that employers regularly misunderstand the nature of SARs or underestimate the importance of responding to requests, and that organisations which fail to respond to SARs promptly, or at all, can be subject to fines or a reprimand.

To support employers to respond to SARs from current and former members of staff, and to address the high number of complaints, the ICO has published guidance for employers (tinyurl.com/ yxxcuza2) on dealing with SARs.

The ICO guidance is in a Q&A format

and refers to (and reinforces) the relevant parts of the ICO’s detailed subject access guidance (tinyurl.com/5dw8cpjn). Some of the more pertinent topics in the ICO guidance, as far as schools are concerned, are set out below.

RECOGNISING AND CLARIFYING REQUESTS

The ICO guidance reminds employers that there are no formal requirements for a valid SAR. They may be made verbally or via social media and don’t need to include the words ‘subject access request’ or a right of access. It could be as simple as a request for their HR file or, and this is an example used in the guidance, “Can I have a copy of the notes from my last appraisal?”

A request can be made to anyone in the school, but it’s best practice to have a designated person to deal with it and staff should know who this is so requests can be passed to that person as soon as possible.

Regardless of how it’s received, schools have one calendar month to respond, but where it’s a complex request a total of three months can be taken, if necessary.

The ICO is clear that employers can ask staff to clarify the scope of their SAR, particularly if it is necessary to interpret the request in good faith and where the organisation holds a large amount of information about the member of staff,

Paul Watkins proffers advice about how to deal with the growing phenomenon of subject access requests

Paul Watkins

for example, if the requester has been employed for many years.

REFUSING TO RESPOND

A request can be refused in its entirety, or a reasonable fee can be charged, where it is “manifestly unfounded” or “manifestly excessive”. Put very simply, this is where requestors lack any genuine intention to access their data or it is a repeated request. The ICO guidance gives an example of a manifestly unfounded request as one where an employee makes a SAR but offers to withdraw it in return for a payment.

It can be difficult to meet this criteria and any refusal to respond should be backed up with evidence. The ICO can understandably be reluctant at times to accept arguments made on this basis.

This is not a straightforward area of data protection law and it will need to be carefully considered as requestors not getting any of the information they have requested are far more likely to make a complaint to the ICO.

WITHHOLDING INFORMATION

Where schools are required to respond to a SAR, the requested information must be searched and collated for review. This is not to say that all the information collated may need to be disclosed. The ICO guidance sets out some of the exemptions which would permit schools to withhold certain information from employees, including where it contains: • Other people’s data (including witness

statements and whistleblowing reports). This covers where there is a ‘mix’ of personal data of more than one person. There is wide discretion for schools to determine what is reasonable in all the circumstances. When it comes to witness statements made as part of internal disciplinary procedures, schools will need to consider the reasonable expectations of staff, any assurances of confidentiality, and whether consent should be sought and has been refused, etc. This may result in some redactions to a witness statement or it may be withheld completely.

• Confidential references. Provided a reference is given in confidence, both references given and received can be withheld, as long as it relates to a person’s suitability for education, training, employment, volunteering, appointment to an office, or provision of a service.

• Management information. This includes information which, if disclosed, is likely to prejudice school activities, for example, where premature disclosure of redundancies as part of a school reorganisation could cause staff unrest.

• Negotiations. This includes information which could prejudice a negotiation such as when negotiations over a severance package are ongoing.

OTHER CONSIDERATIONS

Compliance with a SAR is required regardless of whether the requester has initiated a tribunal process or raised a grievance. Requestors must be allowed to

search for a ‘smoking gun’ but exemptions may apply to withhold certain information.

If a member of staff leaves a school the ICO is unequivocal that his or her right of access to the data “cannot be overridden” by a settlement or nondisclosure agreement. Limiting such rights under these agreements will be unenforceable under data protection law.

That said, we often advise schools that, although such provisions are unenforceable, they can act as a useful deterrent.

THE FUTURE

Data protection reforms are slowly going through Parliament which would allow organisations, including schools, to refuse to respond to vexatious requests – a welcome introduction if/when it comes into force. The Bill would also make it clear that only reasonable and proportionate searches in response to a SAR are required.

In the meantime, and before the next SAR lands in your inbox, don’t forget to review what you already have on your devices about your colleagues (and former colleagues) to make sure it’s still needed. Always keep in mind that anything you do record about them may be requested and this includes comments on personal devices or email/social media accounts used for school purposes.

Paul Watkins is a senior associate at law firm Harrison Clark Rickerbys.

Priorities for bursars

1. PROTECTING ASSETS

The imposition of VAT on school fees is almost certain under a future Labour government, which is adding considerable uncertainty to the independent schools sector. Some schools are seeking to protect their assets by entering into property company/operating company (PropCo/OpCo) arrangements, under which a lease is put in place.

We would strongly recommend that expert independent property advice is sought on the detailed lease terms. These can have material implications for the value of the interests, control, securing mortgage funding and other such matters.

2. RELEASING CAPITAL

The need to invest in school facilities in order to enhance parent-appeal (with ever higher expectations) and attract and retain pupils is a constant issue at most independent schools. Inflation and budgetary pressures have affected some schools’ ability to undertake new building projects. However, there are a number of options for schools to realise capital from their estate to invest back into facilities.

Debt funding through secured lending founded on a realistic business plan remains the ‘go to’ for many schools. While the cost of debt has increased, there are still a number of lenders active in the market and we are beginning to see a recovery in the number of secured lending valuations being undertaken of schools. That said, the main clearers generally prefer to lend to their existing borrowers rather than lending to ‘new to bank’ school borrowers.

“Having a ‘red book’ valuation prepared by a valuation firm that is immersed in the schools market is key.”

We’ve seen a number of the challenger banks show increasing appetite to lend into the schools sector, although their margins (interest rates) tend to be more expensive than those of the top high street banks.

Having a ‘red book’ valuation prepared by a valuation firm that is immersed in the schools market is key.

Schools facing a refinance of existing debt in the next couple of years are likely to find that lenders will demand to see robust stress-testing of forecast cash flows to ensure that in the unfortunate event there’s a decline in pupil numbers (turnover), the school’s trading activity could still amply cover the repayments.

In addition, loan-to-value ratios have declined, at the same time as interest rates have increased; this means that it now costs more to borrow less. Schools which are already highly leveraged may struggle to refinance over the next couple of years.

A sale and leaseback is an established method of releasing capital from property, whereby the occupier would sell the freehold asset to an investor and simultaneously take a lease back for a fixed period of typically 15 to 35 years at a market rent. A ground rent disposal is a lower risk option for both the occupier and investor and can provide schools with long-term security of tenure with the potential to recover the freehold for a nominal sum after say, 50 to 75 years. The leaseback period in a ground rent deal is generally 100 to 150 years at a much lower, sustainable rent.

This can be an attractive funding option for those with weaker credit profiles/ covenant strength and those requiring a commitment to the property for the foreseeable future. That said, if a school is struggling, investor appetite might be muted. There would be virtually no investor appetite for a loss-making school.

Many schools may also have surplus assets that can either generate income or be sold to release capital. This may take the form of surplus land within the school estate, underutilised staff houses and/or surplus school buildings that you may be

able to sell or lease to another user.

Finally, there have been a growing number of mergers and acquisitions in the schools market in recent years. There are opportunities to explore mergers, joint venture or shared services opportunities to improve economies of scale, pool expertise and enhance market share in a more competitive market. A merger would offer the opportunity to reduce often expensive ‘head office’ costs, via reducing duplicated roles such as a bursar, marketing, payroll, etc.

We expect forward-thinking bursars will have already stress-tested forecast cash flows to account for VAT on school fees and the potential impact this may have on pupil numbers. Bursars and governors are likely to have considered or even approached other schools to discuss opportunities for mergers.

3. DIVERSIFYING INCOME

Buying or merging with a feeder school offers a good way to protect a future pipeline of pupils.

We are also seeing schools create nurseries (if they don’t already have one) to protect the pupil pipeline into reception. Furthermore, early years will not attract VAT. Introducing a nursery would boost income and also diversify income streams.

Very careful consideration would need to be given to the model of nursery, for example, term-time only, or full 51-week wraparound day care. We have seen schools

Morgan Allen outlines some of the challenges related to property and its management faced by independent schools and how they can be addressed

Morgan Allen

introduce a term time-only nursery and then struggle to fill places in catchments where parents require full wraparound day care instead, and then fail to transition to such a model successfully. A hybrid sessional nursery school and wraparound day care model is often inefficient.

We would strongly recommend to a school considering introducing a nursery that you obtain a report on the catchment analysis and population projections, to ensure a proposed nursery would have sufficient demand to fill places and to decide which type of model to adopt. We would be pleased to recommend a specialist for a catchment analysis report.

Fees for pupils with an education, health and care plan (EHCP) will not attract VAT. We therefore predict a huge surge in parents seeking referrals for EHCPs in order to mitigate the cost of tuition fees. Schools might want to consider bolstering their SEND departments in due course to meet this predicted increase in demand.

4. PROJECT MANAGEMENT

School estates are continually evolving in response to changing educational priorities, the need to replace outdated infrastructure, to create more flexible accommodation, or to add new facilities.

While new projects are exciting and are enthusiastically welcomed by governors, parents and staff, for the bursar they can be a time-consuming diversion from day-to-day responsibilities, particularly where they have little previous experience of running construction projects or the many decisions that are required.

In recent years we’ve seen an increasing number of independent schools appointing an external project manager to lead the process and to provide a single point of contact with the professional and construction teams, allowing the bursar to concentrate on strategic issues.

While projects vary in their complexity, in our experience the key issues of the moment can often be distilled into the following:

• Estate strategy: before embarking on any major capital project, it is important to understand how that project fits within the longer-term plans for the school, to ensure that classrooms meet the future needs of the curriculum, that obsolete facilities are replaced at the end of their life, and that the wider

infrastructure is sufficient to support future plans. The estate strategy should clearly set out the school’s vision for the future and the overall timeline and budget within which individual projects are to be developed.

• Governance: projects require input from an array of external advisors but also input from a cross-section of internal teams to include teaching, facilities and IT, together with governor support. Establishing a project steering group at the outset with representation from all, and input from the external project manager, is the right forum for key decisions and consistent reporting.

• Brief: the brief for any project should clearly set out the key deliverables, milestones, budget and programme. Crucially, it should help avoid ‘scope creep’ as the project develops.

• Programme timing: the majority of problems that occur on any project are due to unrealistic expectations about the programme, particularly with the length of lead-in and design periods. Schools have short windows within school holidays to carry out disruptive works in existing buildings and critical dates to hit with the start of term. Many independent schools are located in historic and listed buildings which adds further complications. A disciplined approach to programme management is needed at the outset.

• Budget: construction costs, as elsewhere, are currently at an all-time high and agreeing fixed price contracts is becoming more challenging. In addition to the build costs, there are also site investigations, professional fees, enabling works, temporary facilities and VAT which can add 40 to 50% to the overall cost.

• Environment, sustainability and governance: ESG is no longer just aspirational. Recent increases in energy costs, for example, are biting and parents and children want to know what schools are doing to address environmental concerns in their longterm planning. New projects also need to be sustainable in the widest sense by being flexible and accessible to all. One of the few positives of VAT being imposed on school fees is that schools embarking on capex projects would now be able to reclaim the VAT on the costs of

construction, thus reducing construction costs by 20%.

5. VAT

The imposition of VAT on school fees has the potential to affect independent schools across the country significantly. While the idea of introducing VAT on education has long been a topic of discussion on the political agenda, it remains unimplemented for now. However, a Labour government, and thus VAT on fees, is looking increasingly likely.

Plenty has already been written and debated on the impact of VAT on school fees, so we won’t debate it further in this article. In short, adding VAT to school fees is likely to have adverse effects on independent schools. It will strain many parents' finances, increase administrative burdens for schools, and potentially limit the availability of scholarships and financial aid. Policymakers would need to consider carefully the consequences of such a move on the education landscape in the UK before implementing any changes.

THE FUTURE

The next couple of years will be a bumpy ride for many, with the weaker, smaller schools suffering the most. Savings can be made on capital expenditure projects if VAT can be reclaimed. Business rates can be appealed; we have achieved substantial rates refunds for some of our school clients.

We predict a greater number of mergers and opportunities for the for-profit groups to acquire schools and for further consolidation in the sector. We are aware that many of the schools groups are being contacted by sometimes desperate bursars on a weekly basis. But with more opportunities, the groups are now more discerning about their acquisitions.

Values have dropped from the heady values of 2022 and there’s a greater divergence of prices being paid between the strong and weaker schools. Schools making a very substantial deficit might struggle to find a buyer at all.

We advise schools groups on acquisitions and/or valuations and can provide advise on the potential market for a school as a going-concern, if this is being considered. Morgan

The importance of oversight

In the challenging economic climate that we find ourselves in, it’s more important than ever that headteachers have a good grasp of their school’s financial position, performance and projections. This can be a daunting prospect for heads with limited formal training in financial management and so in this series of articles we will be providing guidance on the basics of financial management for heads. We start the series with advice about the head’s responsibilities in terms of financial oversight.

WHY FINANCIAL OVERSIGHT IS IMPORTANT

The past few years have been full of upheaval and change. Schools have had to deal with the impact of Covid-19 on both their operations and finances, and the economic environment has been unstable and challenging with the rising cost of living affecting both your cost base and your parents. The upcoming general election adds a further layer of financial complexity with Labour’s pledge to implement VAT on school fees. It’s vital for schools to be able to react quickly and decisively to the financial impact of external changes, and to do this the head, senior management team and board of governors all need to have a good understanding of the school’s financial position.

The school’s bursar is normally responsible for managing the school’s finances, and it can be an isolated role if support and oversight is not provided by the head and other members of the senior management team. As auditors, we often speak to clients about the importance of segregation of duties within financial processes as this reduces the risk of fraud and error. Most bursary departments have good segregation within their daily financial processes, such as processing payments, however it is often the bursar alone who is preparing termly management accounts and other financial management reporting. It’s important that you as head feel comfortable

reviewing financial reports so that you can identify where errors or omissions may have been made.

ACCURATE AND TIMELY INFORMATION

There are two key elements to financial reporting: the school’s financial position and performance for the year to date, and the budgets and forecasts for the months and year(s) to come. It’s rare that good financial decisions are made in haste and so receiving both elements of financial reporting in a regular and timely fashion is very important. Financial reporting is normally prepared in advance of termly committee and board meetings, however do ensure that you as head have sufficient time to review this information before it is circulated, and that you discuss it with the bursar so that you can ensure the information being presented reflects your understanding of the school’s activities and future plans.

Although financial information is generally provided to school governors on a termly basis, I recommend that monthly management accounts are provided to the senior leadership team for review. The lack of stability in the economy at the moment can mean that costs and income can change at short notice, and monthly reporting will mean that you can react quickly to any unforeseen developments.

THE CONFIDENCE TO CHALLENGE AND QUESTION

Don’t be afraid to question and challenge the information that you’re provided with. The bursar is often deeply involved in the detail and sometimes it can take someone standing back and seeing the ‘big picture’ to realise that something has been missed. Key areas to review in your budgets and forecasts are:

• Pupil numbers.

• Staff costs.

• Upcoming repairs, maintenance and capital works to the school premises. For financial performance, ensure that you have access to timely information

“The school’s bursar is normally responsible for managing the school’s finances, and it can be an isolated role if support and oversight is not provided by the head and other members of the senior management team.”

on overdue school fee debts, as these can quickly spiral out of control if they are not regularly monitored and chased.

MEET REGULARLY WITH YOUR BURSAR

And finally, many of the decisions that you make as head will have a financial impact on the school and for that reason I recommend that you have regular informal and formal meetings throughout the year with your bursar to ensure that your decisions and plans can be factored into their budgets and projections. This will help you to work together to deliver the school’s objectives in the most costefficient and impactful way.

Jane Askew is a partner with accountancy firm haysmacintyre.

Jane Askew opens a new series to help heads with a greater financial understanding of their school

Jane Askew

Bank deposits

In a new regular series, we provide the latest best rates for bank deposits. Ian Buss accesses those from deposit platforms, while MoneyFacts offers the best rates it has identified

At the time of publication, market sentiment is that we are likely to see a handful of bank rate reductions this year. This is shaping the interest rate environment for those looking at tying up cash deposits.

Those of you who have been keeping your eyes on rates will have noticed that 12-month fixed rates on offer for schools are now available paying around 5%. This is down from their peak, just a few months ago, of more than 6%.

Traditionally, instant (or easy) access deposits tend to attract the lowest interest rates, however, we are seeing a number of banks paying over 4% at the time of writing.

The majority of the market-leading rates are offered through deposit platforms. This allows a bank to maintain its current deposit rate strategy through its branch network while allowing it to be competitive to ‘rate hunters’ by offering exclusive deposit accounts that can only be accessed and transacted on through a deposit platform. The platform also

allows schools to open multiple accounts with multiple banks without providing any further ID and address verification once the platform is set up.

With schools generally having peak balances three times a year, a deposit platform providing an easy way to deposit cash on a short-term basis can make a significant impact on deposit returns.

Support, ideas and guidance on your deposit strategy, is available to readers of Independent School Management without charge via Ian Buss.

The example rates shown were correct at the time of writing (5 March).

Ian Buss is founder of Education Banking Consultancy.

* This is designed as a guide only. All calculations should be manually checked for accuracy. Returns shown assume interest rates do not change and funds are left for 12-months in total and exclude any potential compound interest. This is a small example of rates available.

Long-term fixed rates

Borrowing rates and availability of products are subject to individual credit ratings. Terms apply to all cashback arrangements.

Final plans for net-zero

Nigel

In this series of articles, part one discussed definitions, the difference between net-zero carbon and net-zero energy, and what this all means for independent schools.

Part two discussed decarbonisation planning for schools in more detail, focusing on a type of plan that has come to be known as the estate decarbonisation plan, or EDP for short. (I can’t help but think of the Terminator films when I hear the term decarbonise: I know why we use it, but visions of Arnie Schwarzenegger arriving on set and declaring ‘this campus has been selected for decarbonisation’ keep springing to mind.

In this article I hope to bring the subject matter to life by looking at some EDP snapshots and consider what happens next, after the EDP, when Arnie has been and gone.

A BRIEF RECAP

The purpose of the EDP is to determine a pragmatic, affordable programme of infrastructure projects that achieves the intended end-state – the net-zero school estate. The diagram below (featured in part 2) indicates what this programme might look like in theory:

Given that implementing the decarbonisation plan will entail significant capital outlay, at a time when funds are inevitably short, the trick will be to derive a programme of work that enables progress in the short term without jeopardising the long-term objective. Any short-term projects should be selected based on meeting two criteria: that they will be enablers for the longer-term projects and/or reduce operating costs. We can call this the enabling phase. It gives a school the opportunity to make a start on going green without needing to go into the red in the process. The major decarbonisation phase is when most of the expensive, disruptive projects will occur, the most significant being the conversion of the school’s provision of heating and hot water from fossil fuel systems to low-carbon alternatives.

There is deliberately no scale along the X or Y axes. The programme duration will depend on a range of factors, including when the existing heating plant reaches end-oflife, government-imposed deadlines for phasing out the purchase of new fossil fuel heating plant (currently 2035),

and – not least – the school’s capacity to fund the work. The current trend in the independent sector is for a programme of about 20 years. The Y axis scale will, of course, depend on the size of the school estate: small independent schools might be facing a total capex in the order of £2-3 million to become net-zero carbon; for the largest schools in the UK it will be some £20-30 million, or even more if the school also wants to become as energy self-sufficient as commercial good sense and the school’s real estate allows. In short, becoming net-zero is rather a big deal, and it merits a comprehensive plan.

INSIDE A SCHOOL EDP

Next, some examples of what this looks like in practice, using extracts from an authentic school EDP.

The chart below shows an extract from an EDP for a large day school in an urban setting, covering the enabling plan’s major projects (building names have been sanitised):

The school will be engaging in a range of energy efficiency and on-site power generation projects (all identified and examined in detail in the plan). The net financial impact of these projects will be as shown on the chart below:

Aylwin-Foster completes his series on how to achieve your school estate’s decarbonisation plan

Nigel Aylwin-Foster

In other words, once all these projects have collectively paid back (after a total of six years) the school will be making significant financial gains in operating costs. It all seems like a no-brainer, but it does matter that the various measures have been realistically costed and modelled and that the cash flow doesn’t exceed the annual limits set by the school; this is no place for wishful thinking.

The related main decarbonisation phase is shown in the chart below. Note that the school is not rushing into this work – there’s no need to do so from a compliance and regulatory perspective, while from the school’s commercial and cash flow perspective it makes sense to spread the projects over several years:

The general strategy in this plan is to match the phasing out of the incumbent fossil fuel heating plant with the principles and deadlines enshrined in UK government policy, combined with pragmatic use of the projected end-of-life of the outgoing plant. Likewise, electric vehicle (EV) charging points are to be installed in two tranches, to match the period when the school’s transport fleet is likely to be converted (in turn driven by when the EV market will achieve commercial parity with the internal combustion engine market). This all leads to a steady rate of change, rather than a blitz of projects over a short period, which in turn enables the school to get to a net-zero carbon estate within the cash flow constraints imposed year on year – in other words, to go green without going into the red.

The overall plan finances are shown in the next two charts. The first chart shows how the net effect of the plan is to reduce operating costs steadily over the life of the plan:

compliant with forthcoming legislation:

CARBON EMISSIONS

So far we have not discussed the impact on carbon emissions. We should, but I’ve done it in this order quite deliberately, because the money must come first – we are, after all, trying to go green without going into the red.

The chart below shows the pathway to net-zero for the same EDP, compared to the counterfactual of maintaining the status quo and only taking any proactive steps to get rid of fossil fuel systems at the last safe moment. The implications are self-explanatory.

UK GOVERNMENT POLICY

So, what of the legislation? There have been some recent changes, but the latest key policy nuggets are shown in the diagram overleaf.

But, of course, this can only be achieved via capital investments and the key requirement from the school’s perspective is to ensure that capex in any given year remains within the intended limits. The next chart shows cumulative costs versus the counterfactual of doing the minimum to remain

The statements in red font merit elaboration. The government is trying to match the need for steady progress with a matching need not to incur undue waste by getting rid of perfectly good fossil fuel heating plant ahead of its end of life. The principle is that no heating plant should be removed before end of life (unless there’s some other good reason) but that from 2035, when fossil fuel plant reaches end of life or becomes due replacement, then that replacement must be a low-carbon alternative. Also note the statement in green font; the intent is that grid electricity and gas prices will gradually shift in balance over the next few years, such that heat pumps become commercially more attractive than gas boilers. While here, also note the statement about the national power grid – it has a government target to decarbonise. The implication is that schools don’t need to install lots of on-site power generation (and storage where relevant) in order to get estate

power to net-zero – the grid will do that for schools. However, as we’ve seen in the enabling plan extract above, there are sound financial reasons to embark on a programme of projects that will reduce the school’s reliance on grid power as far as reasonably possible, In other words, this is a financial play, not a net-zero carbon one.

SUMMARY

It should be obvious by now that achieving net-zero is a challenging endeavour. The key will be to determine the right pace. It needs to be consistent with both regulatory requirements and the annual cash flow constraints at the school. I believe that with sound and careful planning that balance should be achievable for independent schools in the UK, without needing to hear the dreaded T-word from Arnie.

BUT WHAT’S NEXT?

The EDP is part of a broader step-by-step riskreduction process required for decarbonising a school estate. Engineering and commercial logic suggests five steps, as shown below.

Readers may recognise a process similar in concept to the Royal Institute of British Architects process. It works well for individual projects or a grouping of projects (a programme). It is designed to flush out potential costly mistakes and dead ends, which can then be avoided. The idea is that each step is progressively more substantial, with the major expenditure not until

Step 5. A school only commits to the next step in the process once the preceding step has justified continued progression. Conversely, if a major hurdle is encountered that undermines the prospect of successful completion, then the process can be halted. For example, during Step 3 – project definition – it may become clear that in order to convert the heating to heat pumps the school estate will need an upgrade in power from the grid and that upgrade will be prohibitively expensive. Or, more likely, the upgrade cannot be done until a specific year in the future and therefore the heat pump project will have to be delayed accordingly.

The EDP serves as Step 2 in this process. It would be expected to follow on from a period of initial broad analysis and discussions between the supporting consultants and relevant school staff, under Step 1. The output from the EDP is the draft programme for the decarbonisation of the school estate across the entirety of the school’s heat, transport and power inventory, plus all the supporting detail to justify the programme. As we’ve seen, the draft programme contains a range of projects. The EDP should indicate the linkage between them, but each project will merit its own Step 3, 4 and 5. The diagram below illustrates how this might work.

In this example – from a different school’s EDP – the energy efficiency works, solar photovoltaics (PV) projects, EV charging point installations, and CHP (combined heat and power) project are all part of the enabling phase. They all reduce operating costs and save money relatively quickly, so there’s no reason to delay them – always provided that the annual capex can be kept within the school’s limits. The later projects are mainly concerned with heating plant replacement, as in the previous case study.

Nigel Aylwin-Foster is the business development director for school estate decarbonisation firm ReEnergise Projects.

After the fall

Craig McLaughlin provides tips for preventing slips, trips and falls in and around your school

Spring is finally tiptoeing in, bringing sunshine and the promise of warmer days. However, this time of year can also unleash surprise ice patches and torrential downpours, turning a school’s paths, walkways, car parks and playgrounds into obstacle courses.

As temperatures can still be low, especially in early mornings, and rainfall is still often heavy, the safety and security of pupils, staff and visitors is as important as it is in the winter months.

According to the Health and Safety Executive (HSE) 55% of all accidents in educational settings are caused by a slip or trip, with nearly 2,000 recorded last year. Slips and trips continue to be a risk in UK schools, as they are in any environment where people move around. While you may have made considerable risk management efforts to improve safety measures and reduce the occurrence of slips and trips, accidents can and will still happen. It is important for schools to remain vigilant and proactive in managing these risks to ensure the safety of pupils, staff and visitors.

During the colder and wetter months, the risk of accidents surges in education settings. RSA data shows a 34% increase in personal injury claims related to slips, trips or falls during the autumn and winter months. These incidents can result in injury claims, resulting in timeconsuming hassle and upset for schools.

“As temperatures can still be low, especially in early mornings, and rainfall is still often heavy, the safety and security of pupils, staff and visitors is as important as it is in the winter months.”

RSA data also reveals that 10% of slip, trip and fall claims within schools result in civil and/or legal action. Moreover, there’s the additional threat of reputational harm for your school, along with the potential for fines and prosecution, which shouldn’t be underestimated. Accidents on a school’s premises can easily become topics of conversation at the school gate and parent WhatsApp groups.

Slips and trips related to the seasonal changes present a unique challenge, especially when it comes to the safety of pupils. The constant movement of children make them more prone to falls, even without the additional hazards of plant debris, water, ice or snow. Their tendency to fool around and pay scant attention to their surroundings increases the likelihood of accidents.

This heightened risk extends beyond children to include all visitors and vulnerable groups, such as grandparents and individuals with limited mobility. Similarly, those carrying younger children may find it more difficult to maintain balance. Therefore, addressing the safety concerns associated with seasonal-related slips and trips is crucial for ensuring the wellbeing of anyone who comes through the school gates.

Six things you should have on your to-do list:

1. Flooring selections and maintenance: choose seasonal-appropriate flooring materials, regularly inspect and maintain them, and document this process as evidence of having done so.

2. Use non-slip measures: place non-slip mats in high-risk areas and put in place regular cleaning schedules. Display warning signs throughout potentially slippery areas, including kitchens, canteen/refectory areas, lavatories, swimming pools and sports facilities, wooden or decked areas and areas of increased footfall for parents’ evenings

Craig McLaughlin

risk management

HOW TO DOCUMENT AN INCIDENT AS A RESULT OF A SLIP OR TRIP IN YOUR SCHOOL

It is important to gather accurate and detailed information to ensure proper record-keeping and potential future reference. Here are some steps to follow when documenting an accident in school:

• Prompt response: respond to the accident promptly and ensure the safety and wellbeing of those involved. Provide any necessary first aid or medical assistance as required.

• Incident report form: These are specifically designed for documenting accidents in schools. The form should include fields to capture essential information such as the date, time and location of the accident, details of the individuals involved (including names and contact information), a description of the incident, and any witnesses present.

• Detailed description: provide a detailed description of the accident, including the sequence of events leading up to the incident, the specific location within the school where it occurred, and any contributing factors or hazards that may have played a role.

• Witness statements: if there were witnesses to the accident, gather their statements. Record their names, contact information, and their account of what they observed. It is important to document their statements accurately and objectively.

• Photographs or videos: take photographs or videos of the accident scene, focusing on any relevant factors such as the condition of the area, hazards or objects involved.

and seasonal plays etc.

Outside the school building, address slip risks from fallen leaves that become wet or have started to decay. They can hide any hazard that may be on the path or they themselves create a slip risk.

3. Walkway planning: well-conceived walkways play a crucial role in preventing accidents, especially during winter overcrowding. Encourage pupils to pay attention, minimise possible distractions (by appointing hall monitors or staff to watch) and clear routes and shortcuts of obstructions.

Outside, clear snow, ice and fallen leaves regularly to prevent slip hazards. Pay particular attention to drains and grates which become slippery when wet, especially when covered in moss or blocked with debris. These can be difficult to see in lower light conditions. Actively monitor the weather forecasts – if bad weather’s on the way, prepare for it.

• Medical treatment and records: document any medical treatment provided to the injured party, including the names of medical professionals involved, the nature of the injuries, and any recommended or administered treatments. Keep copies of medical records and reports related to the accident.

• Communication log: maintain a log of all communications related to the accident, including any conversations with the injured party, witnesses, parents or guardians, school staff, or insurance providers. Note the date, time and a summary of the discussion.

• Review and signature: review the incident report form for accuracy and completeness. Ensure that all necessary fields are filled out and that the information is clear and concise. Have the appropriate individuals, such as the injured party, witnesses and relevant staff members, sign and date the report to acknowledge its accuracy.

• Storage and accessibility: digitally store the incident report form and any supporting documentation in a secure and accessible location. Ensure that authorised personnel, such as the school bursar or health and safety officers, can easily access the records when needed.

• Follow-up actions: document any follow-up actions taken as a result of the accident, such as implementing safety measures, conducting further investigations, or providing additional training or support. Remember, it’s crucial to handle accident documentation with sensitivity and confidentiality, ensuring compliance with data protection and privacy regulations.

4. Clear signage and visibility: a lack of warning signs for wet floors or potential hazards significantly increases risk. Use clear signage and markings to indicate safe pathways both inside and outside the premises – and anticipate areas that could be a higher risk (such as slopes and grassy areas). Ensure outdoor areas are well-lit with clear signage to draw attention to potential dangers – inadequate lighting often creates shadows that allow potential hazards to lurk.

5. Education and awareness: it’s important to build a positive risk culture in your school. Educate pupils about potential hazards and establish a culture of safety among faculty and staff. Conduct slip coefficient tests, external safety reviews, and use temporary walkways with handrails where necessary. Encourage all members of your community to look out for hazards – can anything be

found on the paths or steps, including fire escapes that could cause an accident?

6. Risk mapping: implement risk mapping for both internal and external areas using models from organisations like the HSE. Using a mapped-out diagram of your site, mark all slips and trips reported in the past 12 months (or relevant period) with crosses. Engage with staff, parents, visitors and pupils to identify any near misses, and incorporate them into the chart. Decide what action needs to be taken and implement that action. And, importantly, continue to monitor it to ensure control measures put in place are working.

For more guidance on spotting hazards, assessing flooring, mapping and assessment tools – visit: hse.gov.uk/slips/ education/index.htm

Craig McLaughlin is the risk consulting casualty practice lead at RSA Insurance.

Invest ethically

Most investors and the investment industry no longer feel the need to ask “Do we want to invest ethically?” It should be reasonable to assume that we aim to act ethically in all aspects of our conduct, including managing investment portfolios. But the debate hasn’t stopped, it has just moved on. What’s changed, and what are school and charity investors talking about now?

There was a time when ‘ethical investment’ was shorthand for avoiding investment in certain companies because of the nature of the business they carried out. Tobacco companies have long since been excluded from most charitable portfolios, and some organisations would also have concerns around activities including alcohol, armaments or gambling for example.

However equating this approach, which is often known as negative screening, with a definition of ‘ethical investment’ has created a number of problems.

FROM THE START

First, some school boards would struggle to agree on what types of company should be excluded from investment. The question “Who’s to say what’s ethical?” has echoed down many a corridor. Admittedly it would often be asked by the most sceptical governor in the room, whose view was really that you shouldn’t be considering the ethical aspects of investing in the first place, and who hopes that pretending the topic is just too complex might help to close the

“There was a time when ‘ethical investment’ was shorthand for avoiding investment in certain companies because of the nature of the business they carried out.”

conversation down altogether.

In fact, it shouldn’t be that difficult to identify the types of business activity you might want to avoid on the basis that they conflict with your school’s aims or because holding them would pose too great a risk to the school’s reputation. The trick is to ensure that individual trustees/ governors remember they are thinking here about the school’s mission and values, not any other views or values that they might hold personally.

But it can be more of a challenge to ensure that your policy has the intended effect of protecting your reputation without excluding such a large chunk of the investment universe that your manager can’t find enough opportunities to put together a well-diversified portfolio. For example, it’s common for schools to want to avoid investing in tobacco, alcohol or gambling companies, but you wouldn’t necessarily want to rule out supermarkets or hotel and travel companies even though they also sell such products. The most common approach is to define the screen with reference to a ‘revenue threshold’ meaning that any business will be screened out if it derives more than (say) 10% of its total revenue from the activity in question.

Another practical issue to be aware of, as some high-profile charities have occasionally discovered to their embarrassment, is that it’s no longer safe to rely on any screening policy which applies only to direct holdings in individual company shares or bonds.

Almost all schools’ portfolios are in fact invested largely, if not entirely, through pooled investment funds. In recent years more attention has been paid to this area, including sometimes by campaigners who are keen to highlight any exposure that investors may have to the activities that concern them, even if only through indirect holdings within pooled funds. It could be hard to describe your approach as ‘ethical’ if your policy basically says that you’re happy to turn a blind eye to what goes on in the funds that you hold. So if you do have exclusion criteria, you

will probably want to ensure that these are being applied consistently across the portfolio, or at least acknowledge the reputational risk that you face if pooled funds are not screened according to the criteria set out in your policy.

IT'S NOT WHAT YOU DO, IT’S THE WAY THAT YOU DO IT

Among other changes in the investment landscape has been an increasing focus by regulators and other stakeholders on standards of company policy and behaviour across a range of environmental, social and governance (ESG) practices. In other words, this isn’t primarily about what sort of business a company is in, but about how it goes about that business.

Depending on how large they are and where they are listed, publicly quoted companies have to report on an expanding range of topics such as board and employee diversity, environmental impact and supply chain issues like modern slavery. Another reason why the term ‘ethical investment’ has fallen out of use is because it is now widely understood that it’s important to assess these factors, which reflect a company’s values rather than just its financial characteristics, when making investment decisions for all investors – not just those who may want to screen out certain business activities. When everyone is taking these behavioural values into consideration,

Heather Lamont describes how schools can ensure they are responsible investors as well as protecting their portfolios

Heather Lamont

can destroy shareholder value.

“Companies which have very poor standards of behaviour tend to underperform over the long term. They are also more prone to financial shocks and sudden reputational damage”

it doesn’t really make sense to think of ethical investment as a distinctive approach.

Why do these non-financial issues matter? There’s something of an overlap here between managing your school’s reputational risk – nobody wants to see a company in their portfolio hit the headlines as a result of a major scandal, for example – and managing financial risk. Companies which have very poor standards of behaviour tend to underperform over the long term. They are also more prone to financial shocks and sudden reputational damage which

Assessing these issues is therefore a key element of responsible investment management and good fund managers will do so as an integral part of their process.

ACTION, NOT TRANSACTIONS

Schools and other charitable investors are increasingly aware that investment markets and portfolios can only be as healthy as the environment and communities in which they operate, and indeed that the long-term sustainability of returns depends on there being some mitigation of systemic risks such as those arising from climate change, soaring global rates of obesity and poor mental health.

You can think all day about what’s allowed or not allowed to be held in your portfolio, but that won’t help to address wider real-world issues like these. Most investment decisions involve buying shares or other assets from other investors, or selling to them. These transactions don’t change the amount of capital that is allocated to the companies in question, whether you think they make

a positive or negative contribution to the issues you’re concerned about. Even policies that aspire to include ‘positive’ investments in the portfolio tend to have very limited impact on how the world works.

Many investors and regulatory bodies have come to recognise the importance of active stewardship – using the power of asset ownership to promote positive change in standards of corporate behaviour – to help reduce the threat from these systemic risks. A number of industry-led initiatives have already demonstrated that commitment and collaboration by investment managers who engage with companies, legislators and regulators on behalf of the investment community can indeed have a positive influence on company behaviour over time.

These challenges aren’t of concern only to a self-defined subset of ‘ethical investors’ – they need to be on the agenda of every responsible long-term investor, in the interests of protecting their portfolio for the future.

Heather Lamont is a client investment director at investment company CCLA.

In the summertime

With demand for summer experiences for local and overseas students back on the rise post-Covid, so too is the need of schools to explore options for the recruitment of overseas teaching staff.

Post-Brexit, when it comes to sponsorship of European employees, advanced planning is key as there are a number of considerations that should be taken into account to ensure a successful and timely recruitment process. Some common obstacles that can arise include issues surrounding a school’s ability to sponsor overseas nationals, considerations of employment start dates, time taken for Disclosure and Barring Service (DBS) checks, potential disruptions to travel itineraries and entry clearance issues. Without advance planning taking into account such considerations, recruiting schools face the risk of delays that could jeopardise entire summer programmes. Additionally, recruiters must understand the key visa provisions of the skilled worker visa route that is most commonly used for overseas teaching staff.

VISA REQUIREMENT

Any EU-based prospective employee will require a visa to work in the UK. With the short nature of summer school programmes, many schools assume the availability of short-term visa options for teaching staff. However, short-term visas for the UK generally don’t attract work rights. It is therefore vital that, before commencing with any visa process, schools and their potential employees

“It’s important to note that sponsoring a skilled worker involves costs for both the school and the prospective employee.”

consider permissions under various routes to determine the most suitable visa based on the work proposed.

THE SKILLED WORKER ROUTE

To work in the UK, non-UK nationals must obtain an immigration status that permits the actual work proposed, with the most common, and quite complex, route being the skilled worker visa.

Just as a school is required to hold a child student and/or student sponsor licence to enrol students, schools must hold a skilled worker sponsor licence to sponsor an overseas employee. A skilled worker licence can be either added as a ‘limb’ to an existing sponsor licence, or setup as a stand-alone licence. Before applying, a school should check to ensure the worker doesn’t already hold a skilled worker sponsor licence using the Register of licensed sponsors: workers.

If a school needs a skilled worker sponsor licence, it should assess the full costs involved to determine whether use of the skilled worker route is costeffective. It’s important to note that sponsoring a skilled worker involves costs for both the school and the prospective employee, along with a number of compliance regulations which the school must meet as part of the process. At the time of writing, the skilled worker visa application fee (cost to the prospective employee) ranges from £719 to £1,500, and the Immigration Health Surcharge (mandatory for a visa totalling over six months in duration) is now £1,035 per visa year.

In addition to the costs, schools should also take into account the current sponsor licence application processing time of four months.

Once a school has secured a skilled worker sponsor licence, they must then request the number of Certificate of Sponsorship (CoS) they require for the next 12-month period.

A CoS number allocated by a sponsor is required by the employee to make a valid skilled worker visa application and must be allocated before any such application

is made. A CoS can be assigned to the proposed employee up to three months in advance of his or her employment start date.

RIGHT TO WORK CHECKS

All employers must check to ensure all proposed workers have the right to work (RTW) in the UK. Not every immigration status provides sufficient work rights and therefore it’s important for the school’s HR department to be aware of this and ensure it follows the correct RTW process. Putting aside reputational damage, scrutiny by way of audits, and the risk of losing a sponsor licence, employers also face heavy penalties of up to £45,000 per illegal worker for failing to carry out required checks.

SPONSORSHIP PROCESS: TIMING, ELIGIBILITY AND COST

Even with a sponsor licence, schools must check whether the role they want to recruit for meets the skilled worker criteria and the minimum salary thresholds.

Minimum salary thresholds are a key factor in skilled worker sponsorship and add to the cost of hiring teaching staff from overseas. The teaching role must be paid at either the skilled worker minimum salary threshold of £20,480 per annum (due to rise to £38,700 from April subject to exemptions) or the relevant minimum rate for teachers in England, whichever is higher. It is recommended that where a school is unsure expert advice is sought to assist with salary calculations, especially given the recent and forthcoming changes in relation to minimum salary levels for skilled workers.

VISA PROCESS

Once a school is satisfied that the role on offer meets minimum sponsorship requirements, and a CoS has been issued, there are then a number of additional steps required as part of the visa process. Although the process is relatively streamlined for European nationals in

Jonathan Hill explains the key considerations when hiring EU summer school staff

particular, the school may be required to provide supporting documentation to the prospective employee.

European nationals with a chipped passport are able to make use of the UK Immigration – ID Check mobile application which allows for a fully remote submission in the employee’s own time, with no requirement to visit a local application centre. Upon submission of the visa application, the employee will need to provide supporting documentation which may include proof of the employee’s English language ability and a criminal record certificate.

English language proficiency can be demonstrated in a variety of ways which includes, being a national of a majority English speaking country, having a degree-level academic qualification that was taught in English, or through a Secure English Language Test (SELT) from an approved provider. It is important to note that if the employee studied abroad he or she will need to apply for confirmation that the qualification is equivalent to a UK

bachelor’s degree, master’s degree or PhD using ECCTIS (formally UK NARIC). Criminal record certificates are required in support of a skilled worker application for those working in education. If the employee is under 28 years old, he or she will need to provide a certificate from any country they’ve lived in for a total of 12 months or longer since turning 18. If the employee is 28 years old or older, he or she will need to provide a certificate from any country they’ve lived in over the past 10 years. Obtaining the required certificate(s) can take some time, especially if an employee has resided in multiple locations. Criminal record certificates must be secured no more than six months before the filing of the visa application.

DISCLOSURE AND BARRING SERVICE CHECK

Finally, upon securing the skilled worker visa and before commencing work in the UK, the foreign employee must pass a DBS check. As there are often delays due to lengthy processing times, particularly

“Even with a sponsor licence, schools must check whether the role they want to recruit for meets the skilled worker criteria and the minimum salary thresholds.”

during the summer, the DBS check can be requested prior to the individual’s arrival in the UK but must take place after the employee’s visa validity.

Due to the multiple steps, lengthy processing times and the number of required supporting documents, schools looking to recruit overseas summer teaching staff should begin planning as early as possible.

Jonathan Hill is a senior manager at immigration law firm Fragomen.

The money-go-round

Ian McLean explains how a sustained school development programme is more than just fundraising

Independent schools around the world have gradually embraced the development (or advancement) function as an essential component of school administration. While this has been well-established and accepted in the US for decades, many schools in other parts of the world are only just beginning to embrace the development function; more independent international schools are realising the benefits of a sustained development programme.

WHAT IS DEVELOPMENT?

The development office should advance the aims and ethos of the school it represents. It can achieve this by strengthening the ties between the school and its community, which should include alumni and parents (prospective, current and former). A variety of activities will support this aim, such as career networking groups, reunions, regional and special interest events and fundraising. Often in partnership with the alumni society, the development office should offer a range of opportunities for the community to give back to the school and to connect with one another.

DO WE NEED IT?

For many international schools, a development office may seem unnecessary, but others that have established one are reaping the benefits of closer relationships with alumni

“For many international schools, a development office may seem unnecessary, but others that have established one are reaping the benefits of closer relationships with alumni and families.”

and families. These benefits include in governance, recruitment, volunteer support and, of course, fundraising for capital projects or bursaries and scholarships.

The desire to establish a development office and appoint a development director is often motivated by the need for fundraising for a desired project, or the need to generate a growing scholarship fund. However, there’s much more to the function than simply fundraising, and if treated in isolation, fundraising will be much more difficult to sustain.

THE IMPORTANCE OF ALUMNI RELATIONS

A continuing and varied programme of alumni relations activity must be directly linked to the development office so that relationships are developed with alumni and families who have the potential and inclination to help in both the short- and long-term.

In an international school, this is not as easy, with many members of the school community moving on and often living and working in other parts of the world. However, there are benefits from engaging with those people who are keen to remain a part of the school’s future, as their enthusiasm will build a stronger school community and enhance the reputation of the school. There are numerous examples of this and, from my own experience in the international school setting, the engagement fostered with the alumni of Leysin American School in Switzerland provided the ideal platform for ongoing relationships and support. British boarding schools have developed this aspect enormously over the past decade.

Gaining financial support will often be the highest prized outcome of development work and so when approaching potential major donors, it’s important to remember that their support will also be sought by major charities for a variety of worthwhile causes. Unless the potential donor has maintained a relationship with the

school, or had the relationship nurtured, there’s little chance that financial support will be forthcoming.

A fruitful fundraising programme will be one that sits alongside a permanent schedule of relationship-building, which offers a variety of opportunities for members of the school community to engage. The office should have overall responsibility for alumni relations and also be linked to the marketing function.

THE FUNDRAISING MIX

There are three fundamental components to the fundraising mix. Establishing a regular (annual) giving programme should form the basis of a permanent fundraising culture. First, an annual programme will build a culture of both asking and giving, and will over time grow the participation rate and the levels donated. It will provide a mechanism to highlight school needs or desires and identify potential major donors. Reporting results regularly will generate a feeling of achievement and, while there are various ways in which an annual programme can be set up, it is advisable to begin by offering a wishlist of items or small projects that, if achieved, will make an immediate impact on the lives of the students.

Second, and at all times, the activity of the development office should focus on identifying those individuals or

Ian McLean

with external communities.

“Because of the transient nature of students and families in international schools, it’s vital that a culture is developed so that parent-giving is something that is well-understood from the outset.”

corporations that have an affiliation and propensity to support in a considerable way. To elevate these relationships to engagement, research will be required, followed by a strategic approach that will vary in each case. In the years ahead, corporate partnerships will play an increasing role in schools’ relationships

The third component is that of deferred gifts or legacies, where provision is made in a will for the school. This element of fundraising will arise, in most cases, from the relationship-building and acts of appreciation over the long term. Many development offices have established a legators’ society, gathered annually for a luncheon.

KEY ASPECTS

Aspects essential to the success of a sustained programme include:

• A whole school development plan, from the head and endorsed by governors, which inspires potential supporters.

• Donors will need to be assured that the school is financially sound and well managed.

• Potential donors will invariably require that fundraising is led by those who are respected within the school community and who lead by example.

• An accurate alumni database.

• A communications plan that places a strong emphasis on social media tools. This will re-engage former students and capture the younger alumni early on for a long-term association.

Because of the transient nature of students and families in international schools, it’s vital that a culture is developed so that parent-giving is something that is well-understood from the outset. A close relationship between the development and admissions office is vital and, where possible, should link the development director to the marketing and alumni relations role(s). This will pay huge dividends.

By concentrating on building longterm relationships alongside an inspiring school development plan, the funds will flow.

Ian McLean has been a development director at independent, boarding and international schools in the UK, Switzerland and Australia.

personnel

People moves

Dauntsey’s Dauntsey’s, a co-ed independent boarding and day school in West Lavington, Wiltshire, has appointed John Davies as its next headmaster from September, replacing Mark Lascelles who is moving on to become head of Epsom College.

Davies is currently the senior deputy head and vice-principal of Kingswood School, Bath, where he is responsible for the day-today life of the senior school, supported by a team of deputy and assistant heads.

Having joined Kingswood in 2017 as deputy head academic, Davies, among other things, led Kingswood’s academic response to the Covid pandemic, before taking up his current role. He is an experienced ISI school inspector, is a member of the HMC AI/EdTech Working Group and is the vice-chair of governors at

St Andrew’s Primary School, Bath.

Davies was previously director of teaching and learning at Abingdon School and assistant director of studies at Shiplake College, both in Oxfordshire. He read English language and literature at Oxford University and completed a master’s in educational leadership from Buckingham University.

Davies has experience refereeing rugby, football and, more recently, netball. He also plays guitar and percussion and his interest for the performing arts extends to a number of cameostage roles in recent school productions.

Newcastle High School for Girls

Newcastle High School for Girls has appointed Amanda Hardie as its new head.

One of 25 schools in the Girls’ Day School Trust, Newcastle High School for Girls is an independent all-through day school for girls aged three to 18, located in Jesmond and Sandyford in the heart of Newcastle upon Tyne.

Hardie has been at Newcastle High School for Girls since its formation in 2014, and prior to that at Church High School since 1997. She has been a long-standing member of the senior leadership team, most recently in the combined role of head of junior school and senior school deputy head academic. Hardie has been acting head of NHSG since September last year.

HMC

Philip Britton, head of foundation at Bolton School, has been appointed as the 2025-26 chair of the HMC.

Britton will step down from his role as chair of the communications committee and join the HMC board as chair elect in September.

Britton took a first in physics at Oxford and did teacher training at Cambridge. He worked as a physics teacher, head of physics and deputy head at Leeds Grammar School. He has been

John Davies

Amanda Hardie

a governor at Stockport Grammar School and is currently one at The Grammar School at Leeds. He became Bolton School’s head of foundation in 2021, having been head of the boys’ division at Bolton since 2008.

Taunton Prep School

Ed Burnett, senior deputy head at Taunton School, has been appointed headmaster of Taunton Prep School, to oversee more than 500 children across the prep, pre-prep and nursery sections of Taunton’s group of schools.

Burnett joined Taunton School in 2015. As deputy head pastoral and designated safeguarding lead he was responsible for the pastoral care of 1,200 pupils from the nursery through to Year 13. In recent years, he was senior deputy head responsible for

much of the day-to-day management of the senior school.

Burnett previously worked at Cranleigh School in Surrey for 14 years. There he was the head of rugby, head of department, and a housemaster. He also taught at an international school in Hong Kong.

Thomas’s College

Thomas’s College in Richmond, London has appointed Will le Fleming as its founding master.

The college is opening in September 2025 as a co-educational secondary school, offering day, weekly and flexi-boarding. It will initially open for Years 7 to 12, building up to a capacity of 630 pupils up to Year 13.

le Fleming is head of The Abbey School in Reading, an independent girls’ school.

Educated at Eton and Clare College, Cambridge, le Fleming has worked as a journalist and author. His teaching career began at St Paul’s School, where he became undermaster, before taking on a deputy headship at St Paul’s Girls’ School. He moved on to the executive headship of Fulham School before he took up his current role as head of The Abbey.

Philip Britton

Ed Burnett

Will le Fleming

The last word

Kate Martin is head of Mowden Hall School in Northumberland, a prep school of about 220 pupils aged from three to 13 years. She was born and bred in the North of England. She attended local state schools and studied sport at Northumbria University. She then completed a PGCE in secondary PE at Cheltenham and Gloucester College of Higher Education. Both of her parents were teachers; her mother was a head, and her sister is also a teacher, so it’s very much in her blood. She is married to Simon, and they have one son, Ted, who’s 13 years old.

What have been your previous roles, including in other sectors?

I initially started teaching in an 11-16 local authority school. After two years, I moved into the independent sector, and have since worked in a variety of schools, day and boarding, co-ed and single sex. Mowden is the only prep school I have worked in.

How many staff are there in your school?

We have about 80 members of staff.

What has been the biggest challenge so far?

Building pupil roll following a drop in numbers as a result of Covid. Exploring and developing external revenue streams has also been an interesting challenge.

What will be your probable next big challenge?

Categorically, the threat of VAT on school fees should Labour form the next government.

“We are a small school, and so a lot of our projects are relatively small, but one of the first external revenue schemes I introduced was a programme of baby swimming lessons.”

What’s the most useful advice you have been given? Always be yourself.

Who has been the biggest influence in your career?

There have been several people who have influenced my career and I have been fortunate to work with many talented people. Overall, my mother has been my biggest influence. She died when I was 19 years old. She became a head at a very young age and was so strong and impressive in the way she fought for her school and the children in her care. For her, being a head was the best job in the world – and I have so much respect for her.

Please relate a funny story from your career.

There are too many! I do remember going sledging late one snowy evening with a group of other young staff. I had the best

Kate Martin

run of the night, but ended up stopping at the feet of a housemaster, who very gently informed me that I was keeping the children in the boarding house awake! The other staff all ran away very quickly and I was not far behind them.

What has been the best moneymaking project that you have introduced?

We are a small school, and so a lot of our projects are relatively small, but one of the first external revenue schemes I introduced was a programme of baby swimming lessons. This has not only raised a significant amount of external revenue, but also worked well from a marketing point of view.

What has been the best cost-cutting project that you have introduced? Very simple, but we have worked hard to be more responsible about the small things in terms of energy saving.

What has been the biggest surprise you’ve had in school?

Every day can bring something new, which is why I love the job. It is often the small things that really make a difference. Seeing a child succeed in something, or supporting a parent who is struggling is incredibly rewarding. A parent recently very spontaneously asked me for a hug. It was because she was so thrilled at how well her children were doing at Mowden. This was a surprise, but also made me feel incredibly proud of everything that makes Mowden such a special school.

What has been your lasting memory so far?

I don’t really want to labour the Covid times, but inevitably they forge a lasting

memory for me. As a new head, making decisions that could potentially impact the health and wellbeing of others was a huge responsibility, but this taught me to trust my instincts and believe in myself.

Any hobbies or outside interests?

Fresh air. I love being outside. As a PE teacher, I was used to spending the majority of every day outside. As a head, I don’t. I think this is why I appreciate it so much more now.

What are your personal future plans?

I want to continue to develop as a head. Times are changing and the landscape will continue to evolve. The future will be challenging, but I am always up for a challenge.

“I want to continue to develop as a head. Times are changing and the landscape will continue to evolve. The future will be challenging, but I am always up for a challenge.”

Mowden Hall School