What Price an Independent School Education in London?
As children head back to school after the long summer break, the family routine settles down once more, and thoughts turn to the coming academic year after the school fees have been paid.
The rise in the capital’s property prices has been the subject of cocktail party and dinner table talk for as long as most of us can remember. But more recently, parents have been expressing concern and puzzlement over “school fee inflation” in London, especially among those families who have older children and who have therefore been paying for education for some time.
The stark fact is that – as with property – the London school fee boom is fed largely by market forces, with rising demand on one side and limited availability on the other. The graph below shows the picture since 2011, and is based on data from the Independent Schools Council (ISC).
Over the period from 2011 to 2016, the number of pupils in London schools has risen by more than 14%. In this time, school fees in the same schools have risen by a little under 31% – the biggest rise being between 2013 and 2015, which saw a staggering increase of 17.4%. It’s worth remembering that inflation over this period has been generally very low – certainly under 10% overall – so this is a massive increase in real terms.
Schools themselves are waking up to these large rises and their implications too. Writing in the Sunday Times nearly two years ago Andrew Halls, headmaster of Kings College School in Wimbledon, expressed concern over the fact that local lawyers, accountants and serving officers in HM Forces had stopped sending their children to the school because of the cost of doing so. Since then there have been many others in the independent sector warning of the “unsustainable rise” in school fees, and concerned that schools are stoking a crisis comparable to that of the banking crisis of 2008.
Most recently, an article in The Tatler predicted annual fees of around £100,000 by 2013 for one well-known school just on the edge of west London and went on to quote many headmasters about the situation and what must and is being done. Clearly, those running the country’s great public schools are rattled.
Yet the situation for independent education in London seems somewhat separate from this lather of concern. A good proportion of London schools are businesses, and those which are not are increasingly being run in a business-like fashion. This means that as long as demand is there, the return on assets will be the top financial target, to be maintained by brand reputation in the form of excellence in academic, creative, sporting and other areas. With property being the prime asset for central London schools it is obvious that the market for education in central London is built upon the three pillars of London’s reputation as a global financial centre, a culturally-rich city and a safe and civilised place to live.
The expansion of London prep schools into the senior school market via properties in Mayfair and other premium areas of London is based on just this. So will London continue to thrive, and if so, for how long? Earlier this summer Brexit sent a shiver through the world, as the possibility of free movement with Europe and “passporting” for international banks could be at risk. If London loses its sparkle as a world financial centre one of the pillars supporting London’s independent schools will have crumbled, and the other two will have to take that much more strain. For the moment things remain uncertain, with some commentators expressing doubt over whether Britain will ever be able to extricate itself from the EU, and others expressing the sentiment that the UK’s rôle as a financial centre remains safe.
No matter what the great public (independent) schools do outside London, don’t expect much change in the rate of increase of central London school fees for the moment.
(Published 6th September 2016)