The financial challenges facing independent schools are multifaceted.  Rising teachers’ pension costs, the cost-of-living crisis, and shifting demographics are already impacting financial resilience.  Add to this the proposed introduction of VAT on fees and removal of business rates relief and the need to develop a clear strategic response has never been greater. 

Our work supporting schools with financial and strategic planning focuses on three areas: 

  • Cost optimisation and efficiency 
  • Maximising student recruitment and retention 
  • Revenue diversification. 

In this article, we talk broadly about these topics and, to conclude, pose some questions to consider that might assist with planning discussions. We would be pleased to discuss any aspect of our work and how we might support you more directly. 

Cost optimisation and efficiency 

Understandably, schools are looking closely at their resourcing and staffing structures to identify potential efficiencies and/or alternative models. Ensuring that the cost base of teaching and support staff is in line with pupil numbers and current and projected income is a complex and multi-layered task. This can often mean planning for growth in some areas while seeking to reduce costs in others. 

So, how do you prioritise spending in the right areas and identify areas where change is necessary? A critical first step is defining key strategic performance indicators (KPIs), for example, target pupil numbers, staffing costs, cash generation, etc. This will provide a framework against which scenarios can be evaluated.  Then, gather sufficient data to provide a detailed picture of current resourcing. This can then be mapped against the agreed strategic priorities to ensure that operations align with the overarching strategy and are appropriately resourced. The exercise will identify where areas are over or perhaps under-resourced, and the assessment of different scenarios against the defined KPIs will determine how operations might need to adapt to meet the agreed parameters.

Of course, unlocking efficiencies is as much about process and skills as actual staffing numbers. Establishing teams to consider specific areas of the operation is often a successful means of identifying how things can be done differently and achieving operational efficiencies. Furthermore, involving staff in this way can be valuable in managing the school through any required change. In our experience, a third party facilitating these discussions, highlighting best practice and supporting the identification of options can also help senior leaders navigate this path.

Maximising student recruitment and retention 

Drawing on our sector-wide research, undertaken over many years, we know that parental satisfaction is directly correlated with advocacy. Meeting the expectations of parents and other stakeholders is crucial to a school’s ongoing success, and this has never been more important. Suppose a school does not fully understand what stakeholders value and what they consider critical priorities; there is a significant risk that any changes made in response to the potential introduction of VAT on fees could negatively impact student retention.  These changes could also undermine the school’s current positioning, adversely affecting recruitment. 

Our experience shows that parents welcome the opportunity to share their opinions and are generally understanding of the pressures that schools are facing. Our affordability surveys are designed to help with scenario planning. For example, the analysis helps identify which segments of the parent body could be at the greatest risk of leaving if VAT is introduced and provides a steer as to how to mitigate this.  Furthermore, the insight generated by research moves you away from anecdotes and provides data to inform your response: understanding what changes parents might consider acceptable helps you to develop plans to mitigate retention risks and will inform your marketing and admissions strategies. 

We often refer to marketing and admissions as the engine room of fee generation.  Ensuring your marketing and admissions strategies are aligned and optimally configured for current and future recruitment cycles is key to providing an effective return on investment. Yet it is not uncommon to find siloed working, where the time to ensure processes and systems are aligned with best practice becomes increasingly impeded by day-to-day demands. Taking a step back to look at these areas is a vital part of optimising student recruitment. 

Revenue diversification 

In a recent survey we conducted, many schools identified fundraising as an area where they need external help and guidance. So, here we focus on revenue diversification through fundraising. However, we acknowledge there are other opportunities to diversify income (from enterprise activities to international expansion opportunities) that can support financial resilience over the medium to long term. 

We firmly believe that all schools can fundraise, and if you are not doing so already, you may wish to consider how you might generate much-needed additional income in this way. Whether you have a development team or not, you will need three things:  

1. A compelling, inspiring, and watertight case for support

This is why potential donors should make your school a priority. It does not need to be complete—the best cases for support evolve over time and often benefit from donors’ input and insights—but it must be authentic, strategic, and clearly articulate the impact donations could have.  

2. A focus on major gift fundraising 

The cost-of-living crisis means greater sensitivity is required when asking your community for additional funds. Therefore, we recommend a focus (or increased focus) on major gifts fundraising: the quiet, well-researched, considered individual approach to a small group of carefully curated individuals or organisations in a position to support with substantial donations. All schools can do this, whether or not they have a dedicated development team.  With a disciplined, focused approach, major gifts can be secured.  For schools new to major gifts, a small amount of specialist support can enable you to understand and succeed in this area.  

3. Research to provide deep knowledge of your potential supporters and how to engage them 

Who are your potential donors?  What are their interests and motivations? What do they think of your school?  How connected are they to the school?   Might they be interested in supporting you?   

Surveying your community will provide essential insights about both the collective community and individuals to inform decisions, help you understand the fundraising potential and generate opportunities to begin discussions about ways to support you.  It will eliminate the risk of assuming, guessing or only listening to the ‘loud minority’ and provide the evidence to ensure that all events, communications, and activities are focused and intentional. 

In summary, sustainable strategies involve a holistic approach that balances financial stability with educational quality. Open communication with stakeholders, including parents, staff, and alumni, will be essential for effectively navigating these potential changes. 

Some questions to consider: 

Value-Based Decision Making  

    • How can we prioritise spending based on educational impact? Can non-essential costs be trimmed without compromising the quality of education? 
    • Do we know what stakeholders value and what they would prioritise when deciding to join our school?  Do we know what current parents will value and prioritise in evaluating whether to remain at the school? 

Cost Optimisation and Efficiency 

    • How can we balance short-term cost-cutting measures with strategic investments that yield benefits over time? 
    • Have we conducted a thorough cost analysis? Where can cost savings be achieved without compromising quality? Can supply contracts be renegotiated? What can be done to optimise energy usage? Can any support and administrative processes be streamlined? 
    • How can we leverage technology to improve efficiency and reduce operational costs? 

Diversification of Revenue Streams 

    • How can we diversify our income sources beyond fees?
    • Are there opportunities to offer additional services (e.g., summer programmes and facility lettings) that generate revenue without compromising the core educational mission? 


    • Are there opportunities to collaborate with other schools or educational organisations to share resources and pool purchasing power? 


If you would like to understand how we can support your school in any of the areas covered in this article please get in touch to book a call with one of the team.