MARKETING THE OLD SCHOOL TIE

Martin Vander Weyer examines the state of

private education in Britain and discovers a new entrepreneurial spirit in the face of adversity

A FUNNY THING happened at my last Old Boys' dinner. The Warden — a long- serving geography master drafted into the top job on the sudden departure of the previous head, who has since become a lorry-driver — tried to sound upbeat about the school's changing fortunes. The remark which particularly upset his audi- ence was, 'Let me assure you, the school is not going bust.'

To the young thrusters on my table, attuned to City double-speak, this could only mean one thing: the school was in deep trouble. Emotions ran high. A group of us retired to a club in Piccadilly to debate what should be done. By the time the whisky ran out, we had formed an emergency task-force under the leadership of a successful proprietor of Common- wealth law colleges; it included a computer specialist, a catering professional, a banker and, inexplicably, a Hampshire dentist.

We were, I think, intending to fly imme- diately to Scotland to rewrite the school's business plan and smarten up its advertis- ing profile. In the sober light of morning, of course, we did nothing of the kind, except regret our hangovers. The school, Glenalmond in Perthshire, has struggled through another year without the benefit of our advice, and has found itself a pro- gressive new Warden. But we were on the right lines: for all but the most famous handful of Britain's boarding schools, sur- vival has become a matter of entrepreneurial lateral thinking, of 'niche marketing' and repackaging of brand images. For those who get it right, it may be one of the great business opportunities of the 1990s.

`We class schools, you see, into four grades,' Mr Levy of Church and Gargoyle, scholastic agents, told Paul Pennyfeather in Decline and Fall, 'Leading School, First- rate School, Good School and School. Frankly, School is pretty bad.' In the Lead- ing School category these days only Eton is completely impervious to change, its lists as full as ever — even Mike Baldwin of Coronation Street wants to send his son there. Harrow and Winchester are recov- ering from minor downturns, whilst Radley has risen to challenge them. At the junior end, the smartest half-dozen Home Coun- ties prep schools continue to prosper on their traditional formulas.

But for the rest — the Llanabba Academies, the St Custards, St Trinians and St Cakes — recession, social trends and the tide of history are sending a chill through the cloisters.

`The tide of history' may sound porten- tous as a reason for declining numbers of dormitory occupants, but the ending of the Cold War has in fact dealt a serious blow to the system. Defence cuts and a narrow- ing of MoD rules on 'boarding school allowances' have reduced the number of servicemen's children at public schools from 22,000 to 16,000 in the past five years. Unlike the battle of Waterloo, mod- ern warfare will have less and less to do with the playing-fields of Eton.

Recession and rising fees, on the other hand, are perhaps not such a significant factor as they may appear, or at least not such a permanent one. 'I dread the begin- ning of term,' the 'financial controller' of a First-rate School said. 'Lines of parents moaning about their Lloyd's losses.' But independent education remains one expense for which large numbers of mid- dle-class parents are willing to make sacri- fices.

And whilst school fees (driven by teach- ers' pay costs) have risen much faster than the rate of inflation over the past ten years, real salary levels for the upper echelon of parents have also risen, and tax rates have fallen. To pay £2,000 of fees in the late 1970s when the top tax rate was 83 per cent required £12,000 of gross income, equiva- lent to at least £25,000 in 1993. This year's fees of £12,000 require only f20,000 of gross income at today's 40 per cent tax rate, and, despite recent difficulties, many more parents (including double-income professional couples) are likely to have that last tranche of salary to spare.

Nevertheless, many parents who started taking decisions about their children's edu- cation in the boom time of five years ago have over-estimated their own ability to pay. The independent portion of the total school population in Britain rose steadily throughout the 1980s, peaking at 7.5 per cent, but has shown a small decline in the past two years. The most dramatic change in the statistics, however, reflects a perma- nent evolution in social attitudes, exacer- bat‘d by temporary shortage of cash: the number of boarders has fallen by a quarter over the past six years. As the autumn term approaches, the number of trunks to be packed will have dipped below 100,000 for the first time in the modern era.

In the past, boarding schools were not so much chosen as predestined, sons following fathers to a refrain of 'What was good enough for me . ' and much reminis- cence about cold baths and canings. That attitude is now redundant in all but the most socially rigid upper-class families, themselves a dying breed. Nowadays, moth- ers tend to control the decision, and the children themselves are often allowed a vote: surveys show that in almost one in five cases the child has had the final say. Fathers, meanwhile, have become much more involved in childcare at home, long- term nannies are a thing of the past, and bourgeois family life is lived much closer together than in previous generations.

The result is that many public-school- educated parents no longer want to send their children away, and especially not to the sort of remote, uncomfortable, undis- tinguished academies they may themselves have endured. Of my own middle-class friends with small children, virtually all are determined to avoid state schools if they possibly can, but only one (an army officer) is determined that his sons should follow precisely in his footsteps. A few others admit to day-dreaming about Eton or Radley. The impromptu Glenalmond res- cue team was suffused with nostalgia for the old place, but not one member of it had seriously considered sending his offspring there. Practically everyone I know in Lon- don is interested only in independent day schools, debating ad nauseam the relative merits of Dulwich, Westminster and St Paul's.

This leaves hundreds of Good Schools and , other Schools facing a corporate nightmare: a dwindling market for new business, a rising level of bad debts from existing customers who can no longer afford the fees, high fixed costs, crumbling Victorian assets and competitive pressure to invest in new facilities (design and tech- nology centres have been especially fash- ionable) in order to stay in the game at all. Many have given up the struggle. The lat- est senior school to go under is Fort Augustus, an obscure Benedictine college on the shores of Loch Ness. South Coast towns like Broadstairs and Seaford, which used to be full of prep schools, now sup- port only one or two.

For schools which are determined to keep going there are a number of possible strategies. The first choice is whether, like a bespoke tailor, to strive for the particular cachet which appeals to a diminishing but still well-heeled clientele, or to go seriously commercial and bid for a slice of a wider market. Radley is a clever example of the former: under its previous Warden, Dennis Silk, it became in the 1980s 'a highly suc- cessful repackaging of the public school myth, Greyfriars incarnate', according to a housemaster at a less successful rival. Simi- larly, Ashdown House in Sussex has bucked the trend simply by being a very good traditional boarding prep school.

For the majority, however, the talk is of `localisation', 'flexi-boarding' and, inevitably, the single European market. Two-thirds of public schools are now co- educational. Many have altered their age- ranges to coincide with the state system, so that pupils can sample the public school experience from 11 to 16 but complete their A levels elsewhere. Some schools now seek to capture their pupils at nursery age. Every variation of boarding and non- boarding arrangements is on offer, includ- ing weekly residence, occasional bed-and-breakfast or longer day-school hours for the convenience of busy working parents.

Schools like Cheam (Prince Philip's prep school) and Rugby have restored their for- tunes by integrating with the local commu- nity in order to keep numbers up — one third of Rugbeians now come from the Midlands. But the risk in this approach is that the schools dilute their traditional product to such an extent that they are no longer quite what they used to be. The social dimension', as one master delicately puts it, remains important; parents are more likely to want to pay £12,000 a year for the spirit of Tom Brown and Flashman than for the company of a carpark full of Coventry video-store owners on parents' day.

If localisation is taking schools down- market, 'Europe' provides scope for increased sophistication. Vacant sixth- form places are on offer to French and German teenagers whose parents would like their offspring to acquire the manner- isms of Mr Douglas Hurd. The new head- master of Ampleforth is described as `mustard keen on Europe': the possibility of networking with Catholic schools on the Continent offers him a marketing weapon to offset defections of traditional Ample- forth families towards Eton, which now boasts a vigorous Catholic chaplaincy of its own.

Lower down the age-scale, some private schools are making a feature of compulso- ry European languages from the age of six, or younger. Cothill House, a thriving Oxfordshire prep school, has set an even faster pace by buying a splendiferous château near Toulouse, where older boys spend two of their final terms.

The search for foreign pupils goes fur- ther afield. The Far East has been particu- larly heavily trawled — public-school entrants from that part of the world rose by 12 per cent last year. At certain times of the year, passport queues at Hong Kong's Kai Tak airport resemble Ronald Searle's gallery of headmasters in Down with Skool, chanting 'Wiens Sana in Cor- pore Sano' and Wilms in Arduis' through a cloud of chalk dust. 'In the name of "meeting possible parents", golf was played on the beautifully kept Fan Ling course . . . ' writes one headmaster in his glossy school magazine, failing to disguise a certain distaste for the whole exercise. `We welcome good students from abroad, no matter which continent they hail from . . .

Needs must, and foreign pupils can offer an extra bonus. `Teffler one bursar told me, 'Teaching English as a Foreign Lan- guage. Marvellous. If they don't speak it when they get here, we charge them an extra £258 a term.'

Glossy magazines, video-prospectuses, `roadshows', even advertisements in Hello! magazine, are all part of the new game. Many schools have entrusted their publici- ty image to external PR consultants, the ideal role for George Cole in a modern remake of St Trinian's. In a market where consumer tastes are changing but demand `If this place gets any cushier, Princess Diana will bring William and Harry.' for the basic product, independent educa- tion, is fundamentally strong, there is plen- ty of scope for entrepreneurial flair.

Perhaps the brashest example is Queen Ethelburga's College for girls, formerly to be found somewhere near Harrogate. Res- cued from terminal decline by an insurance tycoon who bought it at a knock-down price, the school has been moved to a luxu- rious 100-acre campus on which £7 million has been spent so far. Features of the oper- ation include an Equestrian Centre and a fleet of liveried minibuses to bring in day- pupils from neighbouring towns. The junior school accepts toddlers of either sex from the age of two and a half. Displaying both lateral thinking and economy of scale, the site is shared with an old people's nursing home under the same ownership.

Investing in independent schooling at this stage in the economic cycle could be an interesting long-term strategy. Even if numbers of conventional boarders continue to decline — one expert predicts further shrinkage of 40 per cent — parents will still pay through the nose for low pupil-teacher ratios, lavish facilities, what's left of the public school ethos, and an accommoda- tion arrangement which happens to suit the modern pattern of family life. Like any other service industry — hotels, airlines, private healthcare — success will come to those who focus their brand image on a carefully targeted market, sustain a reputa- tion for quality and keep a firm grip on their costs.

For investors who fancy their chances, the estate agents Savills say that there are plenty of school properties quietly up for sale, but that purchasers have to put their own capital up front because banks are extremely reluctant to lend to educational ventures — repossessing school buildings can be unusually embarrassing. Alterna- tively, reputable types (no Satanists or bogus wing-commanders, please) can apply to the firm of Ladbury Wilkie, a 65-year- old confidential agency specialising in sell- ing proprietary prep schools as going concerns. A profitable medium-sized one will cost you about £750,000, including goodwill based on a multiple of termly fees.

Britain's best independent schools will survive current social and financial pres- sures by a combination of institutional strength and individual management skill. Below the top level, a cutting out of dead wood is already well under way. Here and there, energetic new growth is beginning to appear. 'Like a lot of other English institu- tions,' observes a housemaster at one renascent Good School, 'we'll survive by cunning, by a sort of crab-like sideways movement which pretends not to be change.'

It is a sector to watch, as share tipsters say. Perhaps the Old Boys' task-force should have done more than just lament the short-term difficulties: with an eye to the future, we should have launched a take- over bid.