Private schools will find it “more difficult to justify higher fees” because of falling inflation, the chief executive of Britain’s leading independent schools body has said.
David Lyscom’s comments, made in an interview with the Financial Times, will put pressure on private schools to keep fee rises low this year.
They will also comfort parents pressed hard by the credit crunch – and by high fee increases in previous years. Mr Lyscom is chief executive of the Independent Schools Council.
The average cost for day schooling at ISC members was £3,159 ($4,667) a term last year. Recent annual increases have tended to be significantly above the economy-wide rate of inflation. The ISC prefers to use the narrower education price inflation measure as a yardstick, which for the past two years has exceeded ISC school fee increases.
The fall in inflation caused by the credit crunch will help rein in private schools’ costs.
Mr Lyscom said: “Clearly with the rate of inflation coming down, it makes it more difficult for schools to justify higher fees.
“They are responding to a market and what parents are looking for.”
Commenting on whether schools could keep down costs through pay freezes, he said: “With inflation coming down, this may be an area that would be possible”.
The chief executive also warned that smaller fee increases could make it harder for some schools to spend more on bursaries. They are under pressure to do so, to meet the new “public benefit” rules requiring charitable private schools to help poor people.
Mr Lyscom explained: “Say, for example, if you want to build your bursaries up to a certain level, and the only method open to you ... is to take some of your current income and use that to spend on bursaries, then obviously if you’re being constrained on the income side, it makes it more difficult to do that.”
The bulk of Britain’s leading private schools are charities.
Reflecting on possible solutions if the credit crunch hit pupil numbers, Mr Lyscom, a former diplomat, warned of the limitations of one option widely discussed by private schools – taking on more foreign pupils. He said: “There are opportunities to go overseas ... but only up to a certain point.” For example, “you don’t suddenly want a hundred Chinese students flooding into your school because that would cause a huge problem”. Mr Lyscom said: “It would pose huge burdens on the school, it would present social problems ... Having blocks of students from a particular place who may or may not speak English, that could be a problem.”
But overall, Mr Lyscom presented a cautiously optimistic forecast for British private schools. On the one hand, “anecdotal evidence suggests there are more parents turning to schools to see what [financial] assistance is available”.
However, looking ahead to the school year starting this autumn, “there doesn’t seem to be a decrease in applications at the moment”, and there has been “a lot of interest in open days”.
He concluded: “There are no indications that September is going to be a disaster. We’ll just have to get there and see what happens.”
However, “there may be more difficult times coming.”
Geoff Lucas, secretary of the Headmasters’ and Headmistresses’ Conference of the most famous private schools, presented a more bullish picture on Friday. Speaking to the FT before Wednesday’s results of a members’ survey into applications for this autumn, Mr Lucas said “all our evidence” would counter the “doom and gloom” of media reports that private schools had been hit hard by the credit crunch.