Friday, August 01, 2008

Britain: Smaller private schools at risk of closure because of credit crisis

Independent schools are at the risk of closure because parents can no longer afford the fees, education experts have warned

It came after two schools were forced to close, becoming the first high-profile victims of the credit crisis. One school shut altogether while a second has been forced to call in receivers, who are attempting to sell it to a new buyer. Both were members of the prestigious Girls' Schools Association, the group representing Britain's top single-sex schools. Wispers School in Haslemere, Surrey, will not reopen after the summer holidays, blaming financial pressures and a drop in demand for all-girls' education. And Wentworth College, Bournemouth, will shut next week, citing the "current economic climate, linked with a short term fall in pupil numbers".

Last night, experts said the schools' closures were likely to be the "first of many" as the independent sector is squeezed by the financial downturn. All bar one of England's top 20 private schools raised fees above inflation this year, according to one report, prompting claims that some schools were "underestimating parents' sensitivities to fee increases".

Sue Fieldman, regional editor of the Good Schools Guide, said: "These are the first ones to close for a while but I think we may see a string of them. Girls' schools are particularly vulnerable. "Of course, the top schools remain very strong, but the middle-ranking and very small schools may suffer. "Some of these only need to lose two or three pupils a year and it is going to start being very difficult to stay afloat, particularly in the present climate."

Wispers, an all-girl boarding school, announced it was closing at the end of the summer term after 60 years. The school, for 11 to 18-year-olds, charged up to $42$42,000 for boarders and $26,500 for day pupils - with 72 students registered last year. It was known as a strong academic school, sending all pupils to top universities, including Oxford and Cambridge. In a statement, John Parker, president of trustees, said: "We are saddened that the difficulties facing small schools in budgeting for ever increasing costs has resulted in this decision to close. "Wispers' small size has been one of its strengths but its size also makes it vulnerable when single-sex girls' schools are under increasing pressure from the trend towards co-education and when the demand for boarding is in decline." The school will use the sale of its assets - thought to be worth $8m - to create an educational trust, providing bursaries for girls from deprived backgrounds to attend other fee-paying schools.

Wentworth College, for 144 pupils, founded in 1871, was placed in the hands of receivers Grant Thornton this week and will be officially closed on August 4. The girls' school, which charged $32,350 for boarders and $20,850 for day pupils, had been due to admit boys for the first time from September to boast numbers. In a statement, Grant Thornton said it was hoped it would reopen if a new owner was found. "The cost base of the school has risen and management sought to address this by expanding pupil numbers," the firm said. "However, given the current economic climate, linked with a short term fall in pupil numbers and limited availability of funding, the board of governors took the decision to place [the school] into administration." Parents have been advised to find alternative schools for September.

Between 2001 and 2006, average school fees across the country rose by 39 per cent - compared with an 18 per cent rise in average earnings. The Independent Schools Council said the rises were due to staffing costs. Vicky Tuck, principal of Cheltenham Ladies' College and president of the Girls' Schools Association, insisted these were "isolated" cases. "My conversations with fellow heads in GSA indicate that recruitment is going very well," she said. "We have all got parents who are taking all sorts of contingency measures to pay for education. "They want independent education and many recognise they have to go without certain things as a result. "

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School choice doing well in welfarist Sweden

Schools run by private enterprise? Free iPods and laptop computers to attract students? It may sound out of place in Sweden, that paragon of taxpayer-funded cradle-to-grave welfare. But a sweeping reform of the school system has survived the critics and 16 years later is spreading and attracting interest abroad. "I think most people, parents and children, appreciate the choice," said Bertil Ostberg, from the Ministry of Education. "You can decide what school you want to attend and that appeals to people."

Since the change was introduced in 1992 by a center-right government that briefly replaced the long-governing Social Democrats, the numbers have shot up. In 1992, 1.7 percent of high schoolers and 1 percent of elementary schoolchildren were privately educated. Now the figures are 17 percent and 9 percent.

In some ways the trend mirrors the rise of the voucher system in the U.S., with all its pros and cons. But while the percentage of children in U.S. private schools has dropped slightly in recent years, signs are that the trend in Sweden is growing. Before the reform, most families depended on state-run schools following a uniform national curriculum. Now they can turn to the "friskolor," or "independent schools," which choose their own teaching methods and staff, and manage their own buildings.

They remain completely government-financed and are not allowed to charge tuition fees. The difference is that their government funding goes to private companies which then try to run the schools more cost-effectively and keep whatever taxpayer money they save.

Bure Equity, listed on the Stockholm Stock Exchange, is the largest private school operator in Sweden and is expanding rapidly. In the first quarter of this year, net profit for its education portfolio rose 33 percent to $3 million. Such profit-making troubles Swedes who don't think taxpayers should be enriching corporations.

The Social Democrats strongly opposed the change as anti-egalitarian, but when they were re-elected to power in 1994, they found it was so popular that they left it in place, though they imposed a lid on fees.

Barbro Lillkaas, a 40-year-old accountant, is considering putting her child in a private school, and has no problem with the profit motive. "If you run a good operation then you make a profit. But you won't get any students if you are bad," she said. "You have to do a good job to get money; that is even more important for a private school."

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