From one extreme to the other – the differing fortunes in the independent sector.
September 28, 2010
Nothing demonstrates more clearly the current situation in the independent schools market than two articles received in my InBox yesterday.
The first was an article published in The Daily Telegraph confirming a 6% increase in the number of pupils at age 16 being admitted to a fee paying school this year. Clearly this is in direct response to the widely publicised lack of places at the UK’s top universities. With places being fought over more fiercely than ever parents are responding by sending their children to fee paying schools in the hope that this will improve their chances of that elusive university place.
The figures published from a survey by the HMC (Headmasters & Headmistresses Conference) show an overall rise in pupil numbers at member schools of 0.49%. This included a rise of 6.3% at age 16, 2% at age 11 and 4.4% at 13. On that basis therefore somewhere there has to have been a decrease in numbers and that is clearly at the Pre-Prep and Prep schools.
Which leads me on nicely to the second article I received from the Funding for Independent Schools magazine. This is promoting a forthcoming event “The Future for Smaller Independent Schools – continue, change, merge or close?”
This is a well-timed and clearly popular subject (this is the second time the seminar is being run). The subject matter includes generating additional revenue, when merger is a good idea and safeguarding your reputation (a vital area). Interestingly there is one subject area not covered which I feel is a big omission – perfecting procurement. Generating additional revenue is all well and good but it’s a lot harder to do than cut costs, if it wasn’t then surely not all of these schools would find themselves in this position in the first place. Good procurement practices within schools can save significant sums, as we have seen at Minerva. Savings in excess of 25% are being realised on some significant categories of spend. I do think, therefore, they have missed something vital here. That said, I believe this should be an excellent seminar and hope that is of use to those schools who find themselves facing difficult times ahead.
In my mind the above two articles clearly show the stark differences in the fortunes of independent schools at the present time. Let’s hope that with the requisite professional assistance those with challenges can be supported through this period to survive and take advantage when the inevitable upturn begins.
Charities most affected by VAT increase.
September 20, 2010
Of course this is probably stating the obvious to anyone who works in the not-for-profit sector. Many are unable to reclaim most, if not all, of the VAT they incur. With VAT set to rise to 20% in January 2011 are there any actions that charities can take to minimise the impact?
The answer is, of course, yes. There are some actions which will slightly mitigate the increase and keep you within the letter and spirit of the legislation. Some may appear to be obvious but it is always worth a reminder:
- Ensure that you maximise any purchases you can make at 0% or the reduced VAT level of 5% – although with energy costs please see my last blog for a word of warning on this area
- Clearly if there is the possibility of bringing forward any large scale expenditure it would be prudent to do so
- Take advice – most accountancy practices have tax specialists so use their knowledge
- Take advantage of all available reliefs such as advertising services, approved alterations to listed buildings used for non-charitable purposes and new building construction for residential purposes to name but three
Where a supply spans the VAT rate date change ensure that your supplier is aware of the rules re apportionment to ensure that the VAT is charged at 17.5% to the greatest extent possible.
Thanks to my friends at both Baker Tilly (www.bakertilly.co.uk) and James Cowper (www.jamescowper.co.uk) for their newsletter updates on this issue.
- Yay! I've just won a pair of CB40 cricket tickets for the #rosebowl thanks to @thewowcompany They're at #BizSouth tomorrow, go see them!
- School Procurement News Weekly is out! http://t.co/YmsYN2aC
- A successful man is one who can lay a firm foundation with the bricks others have thrown at him ~David Brinkley <like this one. Very apt!
- Office wall starting to resemble a shrine to @nigelbotterill Thanx @ReallyFlyBiz for my new poster! http://t.co/yvkGJWWS
- "@thewowcompany: To celebrate #BizSouth at #rosebowl, we're giving away 5 pairs of CB40 tickets to watch @hantscricket. RT to enter"
- My #ff this week is @BravoBCoT for his great work in the education sector and for maintaining his sense of humour during our Twitter debate!
