Many industries were affected by the Covid-19 pandemic and are still feeling the after effects of these years but we still don’t fully understand the outcomes and implications. 

One of the most important sectors in this category is the education field. 

University students and the cohorts who took their GCSEs through years 10 and 11 had their learning journeys and examinations disrupted at critical junctures and we’ve seen hundreds of stories from those involved about how they’ve been affected. 

But what about the education sector and the hundreds of supporting businesses who, through no fault of their own, faced an unprecedented situation?

Not just schools and colleges but tutors, nurseries, teaching supply agencies and many more. 

How is the education system dealing with the aftermath now they are all “back to school”?

Education business insolvencies 2019 – 2023 (to end of April)

2023 (to the end of April)20552461088

We’ve broken the statistics down by category within the education sector so we can see which have been worse affected than others. 

Immediately we can see that the number of insolvencies have consecutively increased in each year from 2019 onwards with there being a 45% increase in the overall number of educational insolvencies in 2022 from 2019. 

Other educational businesses saw the highest number which encompasses every business that isn’t a learning institution or direct support service as one – for instance this will include swimming clubs, cultural learning services and driving schools. 

2023 shows no sign of slowing down with there being an average of five educational insolvencies a week since the beginning of the year until the end of April. 

What factors caused these impacts?

As well as forced closures and additional financial strain caused by remodelling some areas to make them socially distanced and compliant, there are also some specific conditions that have disproportionately affected educational institutions and businesses. 

These include: 

  • Insufficient Funding

Many schools have found themselves struggling due to limited financial resources after receiving inadequate funding from government sources as well as general reductions to their budgets. This has led to difficulties in maintaining and upgrading infrastructure, purchasing educational resources, and offering competitive salaries to staff in a generally underpaid profession. 

Some teaching unions have taken strike action as they claim they have not been properly recognised for their work both now and through the pandemic when remote learning had to be adopted quickly and at scale arguing that high quality education cannot be provided without the resources children require.

Many educational businesses are caught in the middle of the dilemma, wanting to pay more but being unable to because of reduced income themselves. 

  • Rising Operating Costs

Like most businesses, schools have been impacted by the energy crisis, seeing their utilities bills skyrocket. This combined with other various operating costs, including salaries, maintenance expenses, and technology upgrades brought on by remote learning has left schools with little wiggle room in an already very tight budget. 

  • Special Education Services

Providing adequate resources and support for students with special needs can be expensive. Schools often need to invest in specialised staff, equipment, and programs, which can place further strain on their financial resources.

With record numbers of children and young people being diagnosed with SEND conditions, this is exacerbating an ongoing SEND teacher shortage. 

57% of SEND coordinators said that they were trying to recruit teaching assistants but the low number of qualified or available applicants meant that many children with special needs are being denied places forcing them into mainstream schools where their needs cannot be adequately met. 

  • Declining Enrollment

The allocation of funding to schools heavily relies on student enrollment. If a school experiences a decline in the number of students, it can lead to financial strain as the school’s revenue decreases and force several to close or merge with other local establishments. 

Lifelong learning is an honourable goal for any society as many essential skills are honed and used every day whether they are considered or not. 

The language you use to think, speak and write is essential to communicate and maths is vital to understand not just numeracy but also financial data. 

Whether you enjoy maths or not, if the figures aren’t adding up for your business then you should act quickly and get in touch with us

We offer a free initial consultation for any business owner or director who wants to know how they can move their business forward with a minimum of stress or pain. 

Once our advisors have a clearer idea of your exact circumstances then they will be able to let you know what options you have available whether your intentions are to hopefully save your business or oversee an orderly closure whether you work in the education industry or not. 

The sooner you get in touch, the more leeway and choices you usually find you have – but only when you take the first step and reach out to us first.