Bursar’s Review Autumn 2020 Sample

Finance 7 @the_isba Autumn 2020 Verify the attractiveness of your school’s unique selling points Be clear about the types of parents you are targeting Boards should focus on the internal and external risks their schools face This article outlines the pressures, the probable timescales for the effects of each and some of the counters that schools and their governing boards could consider to ameliorate the effects that these factors will have on their estimated short, medium and long-term financial scenarios. The independent school sector has been affected in various ways by the ongoing COVID-19 crisis. The sector will survive the pandemic and be resilient enough to also adapt to others which appear but the sector will be in a different configuration, shape and serving a much changed and financially pressured parent body in the short and medium-term. It would be incorrect to think that when the COVID-19 crisis ends all will be well. The second crisis is Brexit, the full effects of which are yet to be felt. The sector’s responses to the two are being planned and created against a hostile political environment which exists at both ends of the political spectrum with Labour’s (paused) campaign against public schools and Mr Gove’s quote that “independent schools should become the eccentric choice for parents”. In short, the sector will continue to be under domestic political pressure, no matter which party is in government and this will be overlain with shifting financial pressures from uncontrolled and continuing strategic health and macroeconomic events. This short article outlines the pressures, the probable timescales for the effects of each and some of the counters that schools and their governing boards could consider to ameliorate the effects that these factors will have on their estimated short, medium and long-term financial scenarios. Macroeconomic backdrop In January 2020 the UK economy was due a reduction in its fortunes and observers were exercised trying to work out what that might be. The speculation ended abruptly as the effects of the COVID-19 pandemic became apparent and economic activity dropped very significantly from late March 2020. The need to preserve the nation’s health by ‘locking down’ had a planned detrimental effect on GDP which dropped by 20.4 percent (ONS April to June 2020 figure). As a slight compensation, CPI inflation reduced to 0.8 percent having risen from 0.5 percent in April 2020. The debate of balancing the nation’s health versus economic activity continues and this, driven by the changing rates of infection of the pandemic, will continue to allow or restrict activity and, therefore, will be one significant factor in shaping the speed and duration of the economic recovery. Independent school finances – pressures, challenges, risks and potential gains over the next five years