Independent schools are facing a combination of cost pressures

Independent schools are seeking expert advice on how to tackle rising costs which are putting pressure on their long term future.

Daily Business has learned that two schools are in active merger talks and more could follow amid a combination of rising rates bills, increases in contributions to pensions and a hike in pay to teachers in the state sector.

Private sector schools are concerned they may lose top teachers to the state sector whose teachers have just secured a compound pay rise of 13.51% over three years, equal to a rise of about £5,000.

A 40% hike in employers’ contributions to the Scottish Teachers’ Pension Scheme is forcing some private schools to consider pulling out.

They are also seeing their generous rates relief removed from April next year following a recommendation in the Barclay review. Only independent music schools and schools supporting pupils with special needs will continue to receive rates relief.

There is now talk in education circles that private schools will be forced to hike fees or cut staff, and that this is spreading to senior teachers and management.

“This is no longer about losing a groundsman or dinner lady. We’re talking about tiers of management being removed,” said one source. “One is looking to reduce three assistant heads to one.

“Independent schools feel they should get the best teachers but they may have difficulty matching what is on offer in the state sector.”

School managers and teaching heads will attend a conference in Edinburgh this week to discuss the cost savings, tax and legal issues facing the sector. It is organised by Navigator Law, which specialises in advising the sector, and will be chaired by John Edward, director of the Scottish Council of Independent Schools.

The squeeze on the independent sector in Scotland has also impacted south of the border where at least ten private schools are in talks with a school leaders’ union about pulling out of the Teachers’ Pension Scheme. One major chain is already set to move staff out.

The potential exodus could leave state schools facing further pension contribution hikes to fill a “black hole” in the scheme.

Employer contributions will rise from 16.4% to 23.6% in September and independent schools say the increased contributions could force them to close or raise fees. The Department for Education is now considering allowing private schools to leave the TPS “via a phased withdrawal”.

Alpha Plus Group has already indicated it will move all its 20 private schools and colleges, seven of which are already in a pension scheme with Scottish Widows, out of the TPS from September.

A spokesperson said the group did “not wish to pass on the increased costs of the mandated changes to the TPS to parents” – and wanted all staff in the same scheme.