Why is there high demand for UK satellite schools?

It’s easy to see why UK private schools want to expand internationally, but what’s in it for investors, asks Gwen Byrom
20th January 2020, 1:11pm

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Why is there high demand for UK satellite schools?

https://www.tes.com/magazine/archive/why-there-high-demand-uk-satellite-schools
International Schools: Why Do So Many Businesses Want To Invest In Uk Private Schools Expanding Abroad, Asks Gwen Byrom

There’s no question that over the past 10 years or so there has been a veritable explosion in the number of British independent schools operating their brand overseas.

From the early adopters, who made the first tentative forays into the market, to the huge chains that are now emerging from deals struck with business partners for multiple schools across several countries, to the second wave of schools that have seen the benefits reaped by the early adopters and have decided that they, too, should be part of the international game, it is clear that there is a huge appetite for a British education overseas.

Indeed, the market for international schools (including those from the US, Canada and Australasia) is predicted to hit $89 (£69) billion by 2026.

It’s easy to see what’s in it for UK independent schools: the opportunity to add a secondary income stream at a time when we are pushing hard to maintain and increase the provision of bursaries in our schools is one reason. The fact that the majority of such schools have no substantial endowment or wealthy alumni to support this important aspect of our work is a driver. I have no doubt that the challenges of the Teachers’ Pension Scheme employer contributions hike is driving some of the second wave of schools, too - in some cases purely so that they can survive. The challenges facing independent schools in the UK that have been regularly aired are not likely to lessen any time soon, regardless of the colour of government, and ultimately we do have a responsibility to our parents in the UK to remain financially viable in order that we can keep to our core business of educating their children.

UK private schools expanding overseas

What about the businesses that partner with schools, though? 

Partners come in all shapes and sizes, from multinational corporations to smaller family businesses. They may have extensive experience in building and operating schools already or none at all. They may be in the property business and able to draw upon their contacts in order to build your overseas school or they may even be a construction company with their own capability in your country of choice. They could be a technology business with no experience at all in either operating schools or in construction. They may be none of the above.

What, then, is driving them to seek a UK partner and go into the education business?

Finance-backed multinational corporations can be looking for a stable, scaleable investment that offers some financial protection in an economically volatile market. Property developers may be looking to build a school in order to support the sales of properties in an existing (or proposed) housing development. Businesses may also be looking for a philanthropic project that will help them to gain government approval for other plans. Finally, individual businessmen may be seeking to replicate the education they benefited from themselves, perhaps as a boarder in the UK.

In all cases, a successful school (note the caveat here) represents a stable income stream, since there will always be a population in need of an education and in countries with a burgeoning middle class the demand for high-quality independent education grows rapidly. Partners simply need to hold their nerve during the tricky start-up phase when money goes out and little seems to come back, until they reach break-even point and move into the black. This might, in the early stages of planning, seem straightforward, but the harsh reality of the expense involved in building a high-quality school from scratch can soon start to bite.

What of the families who choose to buy into a new school? A British independent school education does imply several things, all of which are eminently marketable to families overseas. It’s not necessarily their name: even schools with a relatively high profile in the UK can have little to no visibility overseas. There are only a handful of schools that could be identified by name in an international market.

If the name of the school isn’t a driver, what is?

The appeal of a British independent school education is in part the opportunity for immersion in the English language, as a preparation for life in an increasingly globally connected world. The qualifications gained, be they GCSE, A level or the IB Diploma, are internationally recognised, adding to opportunities for global mobility. Then there is the appeal of a school that invites you to consider its expertise and success in securing entry to Oxbridge and Ivy League universities.

And finally, there is the lure of a holistic education and the development of character, resilience, confidence and creativity; soft skills that can give a child the “edge” in a competitive education (and job) market. 

Of course, this is a very brief overview. In coming weeks, I will be exploring the world of partner relationships and the challenges for school leaders and teachers of developing a British-style education in a way that is culturally sensitive and addresses the concerns of families that the education journey they have embarked upon might not deliver on its promise. I will also look at the potential benefits to the home school of having “sister” schools around the world.

It is safe to say, however, that schools embarking upon a partnership to open even one school overseas will gain a great deal from what is a challenging, eye-opening and frustrating but also exhilarating process.

Gwen Byrom is director of education strategy at NLCS International

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