The COVID-19 outbreak is placing a significant amount of pressure on the independent school sector.
With many fee-paying schools already struggling, the concern is that pandemic will push some schools over the financial edge with pupil number recruitment for September the main challenge. Most independent schools have had to offer fee reductions for the summer term, and this lost income will, in many cases, not be matched by a reduction in costs. Independent schools can furlough staff under the Coronavirus Job Retention Scheme, and many have taken advantage of this opportunity, however the savings here often do not cover the lost income because of the need to keep teachers on in order to continue providing remote lessons and other educational support.
Longer term the risk is that some pupils won’t return, particularly boarders from overseas, and the usual recruitment process for the new in-take in September has been severely interrupted making it much harder to market and ‘sell’ the school to potential pupils.
Loans are potentially available to independent schools under the government’s Coronavirus Business Interruption Loan Scheme (CBILS), but applications are not straight forward and trustees need to be sure repayments can be afforded. An option for some could be to convert investments or even surplus property to cash.
The Independent Schools Council website contains lots of useful information for schools as they seek to support the national education system response to COVID-19.
UHY have produced various publications to help their clients through COVID-19, please see our dedicated COVID-19 webpages here