Movers and shakers: two thirds of independent schools considering mergers and acquisitions due to financial pressures
- Three in five independent schools are more concerned about their finances than ever before, research by Ecclesiastical finds
- Three in five are more concerned about parents being unable to keep up with paying school fees than ever before
- One in five independent schools are currently going through a merger or acquisition
New research1 from specialist education insurer Ecclesiastical has revealed the independent school sector is under increasing financial pressures as two thirds (64%) of independent school leaders say their school would be open to considering a merger or acquisition in the future.
Independent schools are facing increasing financial pressures and school closures
Amidst political and economic uncertainty, the survey of 250 UK independent school leaders discovered three in five independent schools are more concerned about their finances than ever before (61%) and believe there will be an increase in independent school closures over the next year (58%).
School fees are a serious concern for independent schools. The research found three in five (57%) independent schools are more concerned about parents being unable to keep up with paying school fees than ever before.
Majority of independent schools are experiencing mergers and acquisitions
The research discovered one in five (20%) independent schools are currently going through a merger or acquisition, and two in five (38%) have done so during the past 12 months. One in ten (11%) of those surveyed went through a merger or acquisition more than 12 months ago.
Improved financial stability (44%), improved facilities (40%), and cost and resource efficiency leading to improved margins (38%) were cited as the top benefits of mergers and acquisitions for their schools. Closely followed by access to funding (35%) and access to more educational resources (33%).
Mergers and acquisitions fears
Dilution of the school brand and loss of school identity (42%) and loss of students from parents removing their children from the school (41%) were seen as the biggest risks of mergers and acquisitions. Resistance from staff, parents, and students (38%), cultural clashes between schools (38%) and mismanagement of financial integration (35%) were also cited as key risks for independent schools.
Laura Carter, Customer Segment Director at Ecclesiastical Insurance, said: “As one of the leading insurers of independent schools in the UK, Ecclesiastical is passionate about supporting the independent education sector. Our research has found the majority of independent schools are open to future mergers and acquisitions. Mergers and acquisitions can present opportunities and challenges for the independent education sector. It is important that schools considering future mergers and acquisitions review their liabilities and check they have the correct cover and risk mitigation in place. We encourage independent schools to think about the risks they may face and how best to protect their organisations for the future.”
Ecclesiastical Insurance’s Independent Schools Risk Barometer 2024 explores the top risks within the education sector and focuses on key areas of concern including mergers and acquisitions, mental health and safeguarding. It is the latest in a series of sector insights from Ecclesiastical Insurance, combining independent research with specialist knowledge from the insurer.
Ecclesiastical Insurance offers a range of risk management support and guidance to help independent schools manage the risks they face. For more information, visit the Ecclesiastical website for education risk guidance here.
