The opening guest speaker at the joint IAPS/HMC annual conference in October this year will be Marc Randolph, the founder of Netflix. By mutual agreement my first question will be about taking decisions in times of chaos.
My word, has there ever been a time when that discussion could be more relevant? A perfect storm seems to have arranged itself to rain and blow upon us not just now, but for some time to come.
Rampant inflation, war in Europe, upwardly spiralling energy costs, union demands for higher salaries and, particularly in education, a government vacuum where ministers record their total time in office in hours rather than years. This all adds up to a chaotic picture indeed. We can throw the lingering effects of Covid-19 into the mix and, collectively, we have a cluster bomb of issues going off together in the budgets of schools.
“This all adds up to a chaotic picture indeed.”
The particular issue of energy costs is a major concern for schools and their significant rise has two effects. The first is that a really well managed school does not have much room for manoeuvre when it comes to reducing energy use in the here and now.
Most will already have LED lighting and appeals for staff to switch off lights, whilst sensible, will not alter the picture in a truly significant way. Plans will be in place to increase insulation and new boilers will be scheduled to replace old, but doing so is not cheap, nor done swiftly, even if schools wanted to do so.
The second is that every current, and perhaps more importantly, prospective parent is facing a squeeze on their domestic finances. Some might argue that it’s only the wealthy who can afford school fees and the inflationary pressures and energy cost rises will not affect them so significantly.
“Every parent is facing a squeeze on their domestic finances.”
But this misses an important point that, in many ways, it is the group who are only just able to afford school fees which keeps independent schools financially afloat. If that group becomes one which just cannot afford the fees then, cumulatively, this will see a significant reduction in pupil registrations.
The government’s action to limit the rise in energy costs takes the excess sting out of the situation but, for many, a doubling of bills in the last 12 months for this essential consumable still punches a large hole in a school’s budget. It is true some schools may be locked into a lower energy tariff negotiated before the increases accelerated, but time is running out on those deals and there seems no avoiding increases in the near future.
“A doubling of bills punches a large hole in a school’s budget.”
Independent schools know they cannot pass on all their extra costs to parents in fee rises but they sit between a rock and a hard place – if income doesn’t rise, then any surplus the school does make with a view to reinvestment in the school’s facilities, will be very largely eroded.
The truth is that, in some cases, this “perfect storm” may well push some schools over the financial precipice and some closures seem inevitable.