Two charities have announced plans to close private schools they own due to long-term financial challenges exacerbated by the introduction of VAT on school fees at the start of the month.
Maidwell Hall and Loughborough Amherst School last week said they had entered consultation on the planned closures with their respective staff.
Both schools said a difficult economic environment had been compounded by the government’s introduction of VAT on independent school fees, which came into force on 1 January, and the removal of business rates relief, which is due to take effect in April.
Unable to sustain a surplus in 10 years
Loughborough Amherst School, part of the Loughborough Schools Foundation charity, is a co-educational Catholic school with 284 pupils aged four to 18 years old.
In a letter to parents, Roger Harrison, the charity’s chair, said it planned to close the school at the end of the current academic year.
He wrote: “Despite significant financial support and sustained efforts to grow pupil numbers, the school has been unable to sustain a surplus throughout its 10 years with the Loughborough Schools Foundation.”
Harrison said the situation in which operating costs continue to rise has been “exacerbated by the recent autumn budget announcements”.
“The introduction of VAT on school fees and the removal of a sizeable exemption from business rates were confirmed, along with an increase in national minimum wage at a level above inflation and changes to employers’ national insurance.
“We have, therefore, and with regret, reached the point where it’ll be no longer financially viable to continue to run the school beyond the end of this academic year.”
He said the charity had made the decision “after exploring alternative options and undertaking detailed financial modelling”.
‘Macro-economic forces have become unrelenting’
Maidwell Hall, a boarding and day school for pupils aged four to 13 years old, faced insolvency in 2022 and was rescued by a merger with Uppingham School charity, which repaid a £504,100 loan for which the bank sought repayment.
In a statement, the school said it has been operating at a financial loss for many years and “adversely affected by external factors that have made it impossible” for it to continue.
Since the merger, Uppingham School has invested in Maidwell Hall, both financially and educationally but “the negative macro-economic forces have become unrelenting”, the statement reads.
“Within the independent sector, post-Covid-19, there’s been a marked trend towards parents choosing to send their children to school as day pupils rather than boarders which has reduced the income per child and thus increased the number of pupils necessary for the school to break even.
“Further blows came in the budget last November when the announcement of VAT on school fees and the elimination of business rates relief was confirmed, and the unexpected increase in national insurance was announced.
“This forced the trustees to recognise that the economic consequence was unavoidable – the school would need to close.”
Charity chair Barbara Matthews said: “The proposal to close Maidwell was made only after extensive consideration of other possibilities but there really was no evident solution to stemming the continuing financial losses and the need to increase from 160 to 250 fee-paying pupils.”
Related articles
