How to check if a school is strong financially?

[examprepper]

Hi, we are looking at a couple of fairly small schools for our youngest DC, who has mild SEN and is less academic than our older ones who went the traditional 11+ Indie route. They have the pastoral and individual approach we are looking for and a wider list of gcse options.

We wondered what checks we can do about about the financial stability of the schools, given reports we have read in the media about the likelihood that a decent proportion of independents may not make it through the covid period, having been impacted by a collapse in the overseas boarding market etc. One school has such boarders, the other doesn’t.

Are schools required to report accounts anywhere? Any other tips?

Thanks

[hermanmunster]

it is a very good point and TBH I am not sure how you find this info, it would be highly commercially sensitive and if it was very readily available then it could cause problems for the schools as it would "get known" that there may be problems. Often financial mutterings are only heard just before the final crash

There have been some real surprises with schools having to close for lack of money - mainly from lack of pupils and limited reserves. One thing that has struck me is those with huge grounds / old buildings / fancy facilities +++ that need maintaining - this is much more expensive than those with limited sites / more modern buildings etc are more at risk as the fees need to cover much more. Also very small schools (number wise) can run into problems very easily - I saw a small prep go under when just a couple of families decided to move on and the intake was lower than expected - they needed a least 80 to keep going and once people heard of the problems they started looking elsewhere.

Interesting about the boarding as I suspect the boarding side often supports the rest of the school and requires staff to live on site etc etc - if the numbers diminish there it can get very much more expensive to maintain.

Not much help I am afraid, someone else might have more idea about what can be found out.

[Stroller]

Crystal balls are hard to come by. However, here’s a local newspaper account of the demise of one such school. Based on that, you could watch indicators such as a dwindling number of pupils, staff turnover (not always a bad thing or for bad reasons, but constant churn is noteworthy), read any third party inspection reports, published notes by governors or parent bodies about what’s going on, including fundraising efforts and reasoning.

How many forms are there per year group? One form entry is almost certainly less resilient than two form entry - that’s just simple economics.

Is the school wrapped up in a charity structure? If so, read whatever they file critically with an eye for substance rather than marketing.

Does the school have any additional ‘safe’ income, e.g. from commercial agreements that allow part of the premises to be used at off-peak times for other purposes?

Try to find and listen to parents who use the school (online if necessary). How happy are they? Do they reveal any hint of the school being under financial pressure? For the school mentioned in the article I linked to, the demise was clearly foreshadowed for several years. I saw it coming despite having zero involvement with the school itself. Some foreshadowing can be self-perpetuating, but that doesn’t mean you’d be wise to ignore it.

[hermanmunster]

Interesting article - curiously have seen the name change happen before as they attempt to relaunch but it fails. Another thing to look at is proposed mergers, can mean neither school is surviving well. Malsis tried to link up with Giggleswick but think Gigg ran a mile when they saw the accounts.

[ToadMum]

My old school closed in July 2019 after 145 years of existence of the original school (there had been a merger, but a century or so ago and only with the school over the road). It has apparently been bought by an organisation intending to reopen it, but the intended date (this September) didn't happen. Not sure whether 'understandably', or hmm..., if you see what I mean.

It had gone through a rough period, numbers-wise, when a new HT started in my last year there, following on from a beloved and much respected one, but obviously weathered that storm. However, when a group of us went back for our 40 year reunion in 2018, we were perturbed to hear of the huge drop in numbers (even with it having become fully co-ed ) and the state of repair of some areas - I believe that there were reasons other than 'security's for us not being allowed access to major parts of the building which contained the former House accommodation and facilities for some of us).

Very much more locally to where I live now, the '3 to 16' private school we looked at, albeit not very seriously, with DD for year 7 closed with literally no warning - to current or 'incoming' parents- at the end of the summer term 6 years ago.

[examprepper]

Thanks all, some good points to investigate and think about.

[PettswoodFiona]

• If they are a limited company then your first port of call is Companies House https://find-and-update.company-informa ... ce.gov.uk/" onclick="window.open(this.href);return false;

• If they are a charity then you look on the Charity Commission https://www.gov.uk/find-charity-information" onclick="window.open(this.href);return false;

The issue is that sometimes a private school is owned by a holding company or a company or charitable insitution outside of the UK. The website of the school should give an indication of who the ultimate owner is. The individual school may look very precarious but that may be because the holding company siphons off all the profit as that is how the structure of the wider organisation works and it doesn't mean the actual school is making a loss. It can be very hard to understand the full picture, but that is what you have to try and build a picture of including the school and its wider network.

Where they are part of a Trust, it can be very difficult to determine as the Trust will have its own (usually Charitable) reporting requirements, but transparency about an individual school may be hard to determine.

Having looked into this a number of times one of the key factors I've found is whether the school owns their grounds or rents them. This seems to affect to a great degree their ability to weather negative financial situations. This isn't something that is usually made clear on Companies House (although they do list all the mortagages or liens they have out) or on the Charities Commission. When I was investigating I only knew more about the ownership as I spent £3 on a Land Registry check, which when investing £12k+ per year seems a fair investment.