What does the future have in store for schools?

02 October 2023

We’re living in times of extraordinary change.

Three schoolchildren at desks wearing Virtual Reality mask headsets

The war in Ukraine continues, the world economy is still struggling in a quicksand of high interest rates, inflation, and supply issues, and climate change is at the forefront of many minds – even if the government’s precise response appears at times to be a moveable feast.

Add in demographic transformation, the lingering threat of COVID, and the rapid pace of AI and tech development, and it can look like an unsettling picture. That’s without entirely unforeseen events – such as the sudden discovery of crumbling Reinforced Autoclaved Aerated Concrete (RAAC) in many UK schools.

Political headwinds

Nor can we discount the evolving political scene, which seems likely to impact the finances of many independent schools. It’s vital that senior leaders take time to consider the impact of these and other issues because children – and their schools and education – may bear much of the brunt.

There’s little that individuals or businesses can do about international geopolitical events. But we can certainly develop strategies to minimise our exposure to them, as well as define the triggers for action.

A proper, rigorous approach to risk management may even allow schools to turn some of these difficult situations to their advantage – there are opportunities here, as well as threats.

Climate change

Sometimes the responses are obvious and immediate: there may be no RAAC concrete in a given school’s main buildings, but it’s important to check any additional buildings constructed from the 1950s to the 1990s, when RAAC was commonly used in flat roofs and occasionally floors and walls.

However, it’s likely that climate change poses a far greater risk, especially where buildings are hundreds of years old. If, as the government suggests, we are entering a period of extreme weather events, a more imaginative approach over and above the regular inspection and maintenance programme is advisable.

What can schools do to protect their estates against flooding, or to cope with extremes of temperature or more frequent high winds? Plan ahead, anticipate small problems before they escalate, and the cost savings could be considerable. And cost savings are likely to be top-of-mind in the years ahead.

Financial concerns

The number of international students at UK schools increased by some 1.6% to 25,469, according to the ISC Census 20231.

This is welcome growth when homegrown parents are struggling with stubborn inflation (the cost of private education leapt by 5.6% this year2) and are increasingly borrowing to pay fees: specialist provider Premium Credit recently released figures3 showing that demand for its School Fee Plan product rose by 84% in 2022 over the previous year.

But there are warning signs in the detail: numbers from the ‘main source countries’ of Hong Kong, China, and Russia all declined, and an Economist piece in June 2023 revealed that ‘traditional private schooling is in decline [a]cross 30-odd members of the OECD’4.

This is against the looming backdrop of a 2025 general election, which looks likely to end in a victory for Keir Starmer. Labour has said it will add VAT at 20% to school fees5, which may render them unaffordable for some people.

It might appear a perfect storm – a possible loss of revenue, just as costs are rising. But it’s a trigger which should drive a set of key actions: what can schools do to trim those costs, and demonstrate value for money? Can they increase their customer base by finding ways to attract students from new territories and demographics? And what strategies might they develop to combat second order effects, such as increased stress, sickness, and departure of teachers under pressure to do more with less?

Sunshine ahead?

It’s important to note that there are bright spots on the horizon. We’re on the cusp of incredible technological change which will allow schools to deliver a lot more bang for the parental buck.

It’s too early to say for sure how tech such as augmented reality and artificial intelligence will develop in the educational context, but it will certainly have an effect; it’s as inevitable as the change from slate and chalk, to pen and paper, to classroom computing.

It’s a positive message: the evidence from major trials by economists at the Copenhagen Consensus Centre shows that children using tablets with educational software can learn in one year what normally takes three6. The question is: what can schools do to seize the clear opportunities as they emerge?

Now is the right time to investigate those questions, employing a strategic risk management process to game all the reasonable possible scenarios, and nailing down response plans.

Read more detailed Enterprise Risk Management advice.

Sarah Pearson, is Head of Enterprise Risk Management, at Ecclesiastical

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