Independent schools will have to consider raising fees and reducing scholarships in order to cover rising bills and inflationary pressures, experts have told Tes.
Other options likely to be on the table include scrapping minority subjects and cutting staff discounts on school fees.
The prices of long-term energy deals being offered to schools have risen by more than 200 per cent for electricity and more than 270 per cent for gas, according to industry data.
But some private schools could be hit harder because they cannot claim VAT relief and because many operate in older, listed buildings.
Consultants have also warned that rising catering costs - caused by high inflation and higher food costs resulting from the Russian invasion of Ukraine - are also hitting the independent sector dramatically, particularly boarding schools.
But private school leaders have said they are “reluctant” to raise fees because of the wider economic pressures that families are facing.
Private schools facing rising costs
James Robson, founder of energy broker Powerful Allies, which works with 125 private schools, said many schools in the independent sector were in a “tricky place” at the moment.
He said many schools couldn’t control the price increases they were seeing, and some could do little in terms of energy reduction strategies because of the settings they are based in.
”They often have listed buildings or older buildings to work with, so energy use reduction can be extremely difficult for them,” he said.
He added: “If you’re in the state sector, you can apply to government if you need a new roof or new boiler, through the Condition Improvement Fund, for example, and those resources don’t exist in private schools.”
Talking about school catering, Chris Stanley, managing partner at ISCC, a catering consultancy that works with over 500 private schools, said that prices for grain and oil had gone up significantly and this had resulted in price rises for the sector.
He said many suppliers had upped their minimum order pricing, meaning schools may not be able to afford to order every day, and this could mean schools having to buy more freezer space or storage.
Mr Stanley added: “In the short term, schools can try and fix long-term deals to shield themselves and they might be able to lower costs by being smart with their cheffing - for example, they could move from chicken breasts to diced meat. There are cheaper alternatives.
“If [the price rises are] sustained then it becomes a problem and I have heard discussions about things such as fees going up. With Covid, for example, we thought that would be short-lived but it ended up being far more sustained than we initially planned.”
Speaking about the cost pressures that schools are facing, Barnaby Lenon, chairman of the Independent Schools Council, said bursars and governors would look at a range of options.
“Some will find ways of cutting costs, some will have to raise fees, and all will consider energy reduction policies,” he said.
David Woodgate, chief executive of the Independent Schools’ Bursars Association (ISBA), said that if the price squeeze is sustained, most schools will face a choice between swallowing the extra costs and passing them on to parents.
“I think a lot of schools can look at fee discounts and staff remission [discounts given to family members of staff]. We’re certainly seeing some schools where the percentage of free remission for staff members has come down. This will vary from school to school, but it’s something schools will look at,” he said.
“There’s the level of scholarships - these will be under the microscope, too. Also, there will be the question: can the school justify the costs of running a minority subject?”
Scholarships are generally awarded to students who show talent in a particular area - such as sport or music - and are different to bursaries, which offer means-tested fee assistance.
Mr Woodgate explained that teachers’ pension alterations were another cost that schools would look at.
“If your energy supplier passes on a huge increase in your deal, there isn’t a great deal you can do about that. You can’t really shop around at the moment. A controllable cost is teachers’ pensions”, he added.
Hundreds of private schools have already left the Teachers’ Pension Scheme (TPS) after the government raised the rate of employers’ contributions by 43 per cent in 2019. While state schools were covered for the increase by the government, private schools were not.
Schools reluctant to raise fees
Private school leaders have told Tes that schools are reluctant to raise fees to meet the cost pressures facing them.
Julie Robinson, chief executive of the Independent Schools Council said: “Like all schools at the moment, independent schools are experiencing rising inflation and utilities bills. They understand the need to ensure fees are kept down where possible and have to balance that against a range of current cost pressures.”
Christopher King, chief executive of the Independent Association of Prep Schools said: “Coupled with increases in national insurance and energy prices, the shortage of labour is inflating salary costs and increasing pressures on independent schools.”
He added: “The damaging effects from the pandemic have left minimal room for manoeuvre when it comes to reducing costs and effective financing, and whilst the wider economic context means schools remain reluctant to raise fees, the current cost pressures are not sustainable.”
Schools in the state sector have previously warned Tes that a perfect storm of financial pressures is going to put a huge strain on school budgets - and heads are warning that the quality of education and support for pupils will suffer.
