Bursar’s Review Spring 2020.

Feature Spring 2020 www.theisba.org.uk 10 This forms a vital part of creating long- term sustainability, but this should, of course, be completed with care. False economies, such as reducing repairs and maintenance budgets, can come back to bite in future periods. Alongside a focus on costs, schools should seek to maximise the return from all the assets held. Maximise return on assets Assets in the independent sector come in many forms. Some schools have impressive land and buildings, others substantial endowments, but all have the most valuable asset in common: their staff. Maximising the return on assets, be that ensuring that cash is held to gain maximum interest through to investing in training and development of staff, should be a focus for all schools. Schools should make a review of all assets held, assess the return being achieved in each case and see how and where yields could be further maximised. One vitally important point, for governors in particular to consider, is that in some cases it will be a financial return, in others it will be a non-financial gain that more efficiently, effectively or comprehensively meets the charitable objects of the school, maximising the positive impact for minimal input. Questions for boards and the senior management team ■ Does the school have buildings that could be rented out? Or surplus unencumbered land no longer required now or in the future strategic plans that could be sold without impacting operations? ■ Is the school maximising the return on intangible assets, such as brand and connections? ■ Is marketing aligned, to ensure the understanding and communication of the USP of the school is maximised? ■ Is the school maximising the potential return on assets held in cash and investments? ■ Does the school have assets that could be shared with local state schools? ■ Is the company structure tax efficient? ■ Is the staffing structure right for the pupil numbers? ■ Are excellent staff being recruited, developed and retained? If not, what is your school’s strategy to do so? ■ Do strategic plans, business plans and departmental action plans align to focus effort on achieving the same goals? One key way in which schools should seek to maximise their return on assets is to assess the school’s potential for income generation. Innovative income generation Independent schools continue to be funded in the main by school fees but trends towards other funding streams (particularly from international schools) can be seen across the sector. With innovation comes risk and governors must assess opportunities in a way that aligns with their responsibilities as charity trustees. But to do nothing also comes with the substantial risk of becoming old fashioned, redundant and out-paced by competitors. As part of overall strategic discussions, schools should be challenging themselves to consider: ■ What innovative income opportunities are available to us? ■ Could our brand be valuable as part of an international partnership? ■ Are we maximising the potential from our feeder schools? ■ Would a nursery further support our offering? And at the same time support our working parents? ■ Are we maximising our connections with our alumni? ■ Is a fundraising plan in place? ■ Could more be made from our commercial trading, lettings etc? ■ Are we maximising the income generation from all the assets we hold? This last question leads on to another key focus for schools seeking to adjust to the changing climate. Is the school maximising the positive education impact from the assets employed (from tangible fixed assets through to the staff)? Technology and innovative delivery The world has changed substantially in the past two decades and has seen leaps forward in IT that would have looked like science fiction to the generations before. But on the whole education has continued to follow a set pattern, because it delivers. But is now the time to review that holistically and determine whether technological advancements and changes in social patterns allow for a change in the structure of education provision? For example: ■ Does the school offer too many subjects at sixth form, could this be narrowed to those which bring the greatest good for the pupils and the wider society? ■ Are there untapped opportunities between neighbouring schools (independent and state) to offer subjects collaboratively? ■ Could any back-office functions be shared with neighbouring schools? Is there potential for economies of scale? ■ Does the school have a medium- term IT strategy, which will allow the right level of investment to maximise opportunities? ■ Could sixth form be offered with more of a university feel, with lecture theatres and tutor groups? ■ With universities having a broad set of entry criteria, can more vocational subjects be offered, such as BTEC? Benefiting those who do and those who don’t go on to further education? ■ Could IT be used more effectively to move away from homework and towards pre-lesson prep? The years ahead will undoubtedly present substantial challenges and opportunities for the independent school sector. Now is as good a time as any to pick up the pace of strategising and planning to ensure your school navigates around the pitfalls and finds strength and stability in the opportunities. Author Guy Biggin Partner, Crowe UK LLP Guy.Biggin@Crowe.co.uk www.crowe.co.uk