Late last month, the Mail on Sunday ran a somewhat hysterical article about the number of Chinese investors buying up UK independent schools, describing the post-Covid situation as a “feeding frenzy.”
The paper highlighted concerns about the Chinese Communist party taking over, describing “Beijing’s tentacles reaching into British classrooms.” A total of 17 schools, it said, are now owned by Chinese investors, with that number set to “sky rocket”.
I would argue that article’s sense of alarm is unwarranted. In fact, Chinese investors are of huge value, in that they are preserving the wonderful, historic schools that their previous owners could not.
The sad fact is, many of our independent schools have been badly run, cursed by a failure to embrace the business side.
Let me explain:
Back in 2010, a well-known school consultancy firm published an excellent independent schools marketing report that said schools need to do three things to survive: cut costs, explore federation or find a niche.
Schools that are doing well have cut costs and become lean as well as shoring up their funding by not relying on other income (other than fees). They have developed their facilities and estates for “lets” during the holiday time as well as their fundraising and development offices and alumni giving schemes very successfully.
And schools have indeed found niches: look at all the schools that trade on “signature” offerings, whether that be a golf or football programme, swimming academy, tennis academy, becoming a Steinway School, SEN focus or even centres of excellence in key subject areas such as STEM.
“Many schools are not run efficiently, in a business-like or agile manner and have therefore had to close over time.”
Schools have explored federation to survive. Look at the success of Woodard, Cognita, GDST. Laurus and many others. There is certainly safety in numbers and definitely economies of scale.
However, I think the consultancy in question missed out a vital fourth thing that needed consideration to survive: schools need to think, act, and work like a business. Many schools are not run efficiently, in a business-like or in an agile manner and have therefore had to close over time.
To be perfectly blunt, schools are managed by teaching staff who in the main have not experienced the cut-throat world of business where the reality is that you have to break even to survive and more.
“The culture has always been an old boys’ club and in many cases governors are from another century in their thinking.”
Independent schools are not like state schools, relying on government support, they are businesses and have to act like this. Their employees rely on this thinking for their jobs. Independent schools as I have mentioned in other articles move as fast as a tanker turning and it is achingly painful to watch sometimes. The culture has always been an old boys’ club and in many cases governors are from another century in their thinking and unfortunately have too much of an emotional connection to the school they went to and now govern.
The sector is slowly adopting a more business-like approach and it’s about time. Schools are focusing not on the numbers but on the revenue lines. They are becoming more customer centric. In the old days the relationship (parent and school) was one of parent-educator; now the relationship is of buyer-seller. Customer service is being seen more and more to win the sale and yes words like “customer” and “sale” are being used. There are still aspects that are old fashioned, especially regarding teaching and support staff and working practices. I suspect that schools will never really get to the Google or Branson way of thinking, but they are moving forward at least.
“Independent schools are great investment opportunities so it is no wonder Chinese investors are buying.”
In conclusion, done right, independent schools are great investment opportunities. It is therefore no wonder why Chinese investors are buying UK independent schools – they can see a great opportunity when it is available. Best of all it is well know that the Chinese have always loved the British Education system and consider our education system the best. This is why many of our schools operate as outpost schools and international schools in China (among many other countries in Asia and around the world).
Chinese investors are supporting our independent schools to explore federation and bring new life to these wonderful places. We should be grateful that this is the outcome rather than what might have happened: the rise of large hotels, theme parks or retirement centres – as has happened – with our amazing schools’ history gone.
This is the business of education.