RECESSION BATTERS BRITAIN’S SMALLER PRIVATE SCHOOLS

LONDON — Freya Hogan would love to return to her school in Ashford, near London, this month after her summer break, but Freya, 16, and about 240 fellow students from St. David’s School for girls have been forced to find another school.

After 293 years, St. David’s, one of Britain’s oldest independent schools for girls, closed down in July after it ran out of money. “There were lots of tears and temper tantrums among the pupils and anger among the parents,” said Freya’s father, Chris Hogan, who runs his own technology company. “It was a sad sequence of events and traumatizing for the girls who had to scatter to the four winds.”

St. David’s, housed in a historic building on a 12-hectare site with its own lake and tennis courts, is among an increasing number of private schools here that have been forced to close or merge as a result of the recession. The Independent Schools Council’s most recent figures showed that six of Britain’s more than 2,000 private schools closed in the year from January 2008 to January 2009, and the number of students attending them, about 670,000, fell for the first time since 1994.

Many larger independent schools here, the famed “public schools” like Eton and Harrow, still have long waiting lists and are expected to weather the economic downturn without difficulty. But many of the smaller private schools are coming under pressure because with average annual fees of $19,650, their finances can be threatened by the loss of just a few students. Andrew McEwen, director of International Education Systems, a group that manages and advises schools worldwide, estimates that about 20 private schools have closed or been taken over in Britain since the beginning of the year.

“It’s been a difficult year” for private schools, said Sue Fieldman, author of “The Good Schools Guide,” an independent survey of schools in the country. “Previously, schools were putting up fees, but now they can’t do that. Parents are no longer impressed by swanky swimming pools. They are under financial pressure. Unless banks are lending more, more schools will need to close.”

In the boom years, schools could survive because of reputation and in spite of flawed financial planning and a lack of proper management, McEwen said. St. David’s trustees, for example, lacked a sense of urgency and ignored the school’s financial problems for too long, said McEwen, whose company considered acquiring the school earlier this year but could not reach an agreement. The school’s administration did not return calls seeking comment.

Hogan, who was a member of the school’s parents’ association, remembered how C. Hoare and Company, a small British private bank, asked St. David’s to repay a loan of about $2.5 million shortly after the collapse of Lehman Brothers in 2008. While the trustees scrambled to come up with the money, trying unsuccessfully to sell part of the school’s land to raise money, some parents set out to find new schools for their daughters, further complicating the financial picture.

“In the past, such schools would go to the banks to survive, but now with the credit crunch there’s no other place to go to,” McEwen said. “Now banks rather don’t lend than risk the reputational damage when they would have to close down a school.”

At the Bolitho School in Penzance, Cornwall, parents dug deep into their own pockets when HBOS, the troubled British lender that merged with Lloyd’s last year, called in an overdraft two days before Christmas. To keep the school with 336 boys and girls open, parents raised $825,000 among themselves that they lent to the school for five years at a 5 percent interest rate. St. Catherine’s Preparatory School in Cheshire was less fortunate, closing in December, while Wentworth College in Bournemouth announced in March that it would merge with another school. Some private schools have been forced to reduce their staffs or delay building-restoration work.

Many private schools are run as charities, and these now face the additional worry of new rules from the government’s Charity Commission requiring all charities to prove that they are making a substantial contribution to society or risk losing their charitable status and the tax breaks that go with it.

For independent schools, this means offering student grants, making their facilities available to the community or teaming up with state schools on some projects. The commission does not expect the rules to threaten the survival of any school, but some industry experts voiced concern, and two schools have already been told they need to do more.

“This could not have come at a worse time for schools,” Fieldman said. “They not only have to get their finances together for themselves but now also for the commission. For some smaller schools, this could really be the last nail in the coffin.”

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