A Guide To School Mergers

Introduction

A recent and growing trend in the independent school sector is one of schools exploring the possibility of mergers with other schools. The reasons for this are many and varied but may include the following:

• Operating margins are low, so pupil numbers are critical. Fixed costs are escalating and to counteract this, schools are increasing their fees. If the fees remain above inflation levels for any sustained period, this in turn could threaten pupil numbers, especially in the strained economic times in which we find ourselves. A merger should achieve higher pupil numbers and reduce costs ratios.
• School premises are always in need of renovation, maintenance and improvement and are a constant drain on resources. Although the Charities Act 2006 relaxed the rules slightly relating to the spending of permanent endowment (of unincorporated charities), it may still be preferable to realise the asset value of one school's property and use part of the