Post-pandemic strategic risk

Post-pandemic strategic risk

Guy Biggin, Partner, Social Purpose and Non Profit Organisations
Post-pandemic strategic risk

As we emerge from the COVID-19 pandemic schools must take the opportunity to consider strategic risk and how they are going to address those risks.

Like all businesses, schools are currently facing significant inflation risk. Specific areas that schools need to consider include, the minimum wage being increased from April – this will impact the staff cost base not only for those at the minimum wage but also for the levels above to ensure that wage differentials remain intact. The minimum starting wage for teachers being introduced by the Government, utility costs, food costs, building and maintenance costs as well as the risk of business rates relief being removed. These are all real risks that will increase the cost of delivering education in our schools.

Income risk has also been impacted by the pandemic. Pupil profiles are changing. Domestically there has been a very clear move from state schools to independent education following the huge success of the independent schools on line offering. UK boarding is changing with more and more schools investing in flexi and occasional boarding to meet the opportunity from parents new working lives enabling them to move away from London and closer to some of our regional schools. Internationally, the Chinese education reforms announced over the summer banning private companies offering tutoring. 

The impact of that on the wider private education sector has meant our schools are looking at exploring new geographies to draw new pupils from.

These risks are the catalyst for strategic planning. Schools need to consider what they must do to address these risks. Simply cutting cost or increasing fees is not sustainable. Schools must look at income diversification to manage the risk of increase costs. Mergers and acquisitions should be considered as part of this thinking. There are some schools already planning ahead and seeking new income streams, working partnerships and finding creatives ways of doing things differently. This strategic thinking needs to permeate the rest of the sector. 

One thing for certain we must understand our strategic risks and a change in mindset is needed to start thinking as a business which runs a school rather than a school that’s in business. 

Independent Schools Newsletter - Autumn/Winter 2021

Insights and updates for the schools sector.

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Guy Biggin
Guy Biggin
Partner, Social Purpose and Non Profits