Report: how private schools benefit UK

New report from Oxford Economics demonstrates the significant impact of independent schools on the British economy

ISC independent schools support a striking £9.5 billion gross value added contribution to Britain’s GDP – larger than the City of Liverpool, or the BBC.

They support 227,000 jobs, one for every two pupils, and generate £3.6 billion in tax revenues, according to analysis by Oxford Economics, the global economics consultancy.

They also make annual savings for the tax payer of £3.0 billion – equivalent to building more than 460 new free schools every year. The high standards of academic achievement shown by ISC school pupils are estimated to contribute an additional annual £1.0 billion to GDP.

This is the first time that the contribution of the independent schools’ sector to the British economy has been subject to objective analysis. ISC schools have long been recognised for their educational excellence, but this report demonstrates the extent of their support for and contribution to the British economy.

Key highlights

  • The 1,205 ISC  schools in Britain support a £9.5 billion gross value added contribution to Britain’s GDP. By way of comparison, this is larger than the size of the economy of the city of Liverpool and also exceeds the BBC’s gross value added contribution, estimated recently at £8.3 billion.
  • ISC schools support 227,200 jobs across Britain, equivalent to one in every 122 people in employment. Every 2.1 pupils at an ISC school support one person in employment in Britain.
  • ISC schools generate £3.6 billion in tax revenues for the Exchequer, equivalent to £133 for every household in Britain.
  • For every £1 that schools contribute to the British economy, they generate 98p in the rest of the British economy through the supply chain and wage consumption impacts. This means that the independent sector has the same multiplier effect as the pharmaceutical industry.
  • Projecting these results to the entire independent sector (so as to include those schools which are not ISC schools) produces an estimated contribution of £11.7 billion to GDP, 275,700 jobs and tax revenues of £4.7 billion.

ISC commissioned global consultants, Oxford Economics, to quantify the impact of independent schools, focusing particularly on ISC schools. The report looks at three dimensions of economic impact:

Contribution to GDP, employment and national tax revenues made by independent schools

Savings to the taxpayer by not having to provide state-funded education for ISC pupils

Additional value to the British economy arising from high standards of academic performance by independently-educated pupils

Savings to the taxpayer

  • The 1,205 ISC schools in Britain educate approximately 470,000 pupils who are entitled to, but do not take up, a place at a state school. This results in an annual saving to the taxpayer of £3.0 billion – the equivalent of building more than 460 new free schools each year.
  • Projecting these results for the entire independent sector produces an estimated annual saving to the taxpayer of £3.9 billion, or more than 590 new free schools each year.

Value-added contribution to GDP

  • Recent studies have highlighted the link between educational performance and economic output at a national level. Applying these studies to the performance of pupils at ISC schools in Britain results in an estimated additional annual contribution to GDP of £1.0 billion. Scaling up for the entire independent sector produces an estimated additional annual contribution to GDP of £1.3 billion.
  • The report highlights the role independent schools play in supporting strategically important and vulnerable subjects: science, technology, engineering, mathematics, modern foreign languages and quantitative social sciences. These subjects are vital to the UK’s competitiveness and its international relations but their supply is either weak or falling, jeopardising the UK’s growth prospects. “It has long been the case that the independent schools sector delivers proportionately more students with better STEM related A-levels than the state sector. Without these well qualified applicants many university STEM courses would face serious recruitment difficulties,”  says Professor Sir Michael Sterling, former Vice-Chancellor of the University of Birmingham and former Chairman of the Russell Group

Wider contribution to local communities

The report also looks at the wider contribution ISC schools make to their local communities. In some areas, ISC schools are the only major employer – for example, Millfield School in Street in the South West, Giggleswick School in North Yorkshire and Sedbergh School in Cumbria.

There are schools, such as Portsmouth Grammar School which are the mainstay of major arts and music festivals, to which thousands of visitors flock. There is King’s School, Canterbury whose sports centre is the city’s main leisure centre and which has been awarded a Centre for Excellence for cancer and stroke patients and is part of a GP referral scheme. There are schools, such as Yarm School in Yorkshire and Dixie Grammar in the Midlands, whose theatres offer the only entertainment hub for their communities.

As Raymond Jones , Vice Chair of Giggleswick Parish Council comments: “Giggleswick is immensely important to the life of the community. It offers a real cultural lifeline to people who would otherwise not have these opportunities open to them.”

There are the schools playing a leading role in renewal and regeneration, such as Newcastle-under-Lyme School and other schools whose building or maintenance projects have helped local companies survive the recession.

There are also our schools who make specialist educational provision for children with special needs. ISC schools provide centres for specialist expertise and training for both state and independent teachers and are also able to provide places to local authorities who may not be able to fund an entire specialist school.

Barry Huggett, headmaster of More House School, Frensham, commented: “Independent schools for children with special educational needs play a hugely important role in the country’s educational landscape. The schools provide centres for specialist expertise and skills and are also able to offer places to local authorities, who may not be in a position to fund an entire specialist school for the children in its area.”

Other specialist schools, such as The Royal Ballet School and Tring Park School for the Performing Arts, provide world class music and dance education, producing talent including Darcey Bussell, Jonathan Cope and Nicola Benedetti, that draws international acclaim to this country.

Sam Moore, Chief Operating Officer, Oxford Economics commented: “By generating tax revenue, supporting jobs and stimulating economic activity along its supply chain, the impact of the ISC independent schools sector is shown to extend well beyond its core function of delivering an excellent all round education to pupils. Our research clearly demonstrates the significant contribution that a large and successful sector can make to the economy as a whole.”

Matthew Burgess, General Secretary, Independent Schools Council, commented: “For the first time, the independent schools’ sector has commissioned a rigorous analysis to understand the extent and significance of our impact on the British economy. While our schools have been long recognised for their educational excellence, we can now see how important our schools are in stimulating growth and employment, in contributing our fair share of tax and supporting local economies and communities across the country.”

Case Studies

West Newcastle Academy

“We are proud to be part of a very significant educational innovation that’s having real impact on a seriously deprived part of the city.” Bernard Trafford, Head, RGS, Newcastle

The West Newcastle Academy is a one-form entry primary school set up on the west side of Newcastle, an area of significant need. In helping set up this free school, The Royal Grammar School in Newcastle was asked to offer expertise and experience by a local charity, Kids and Us, that deals particularly in areas of social and educational alienation.

The Head of RGS and his deputy were part of a team meeting regularly to put the bid together, including attending the final interview with the Department for Education that led to the success of the bid. Now the school is up and running with 28 children in one reception class, RGS is continuing to work in partnership in areas where West Newcastle Academy identifies need, ranging from RGS sixth formers helping with reading to the RGS bursar assisting the school’s business manager.

Supporting the teaching of Physics to all Bolton’s children – the Ogden Teaching Fellow

“The project over four years has brought funding of some £200,000 to Bolton providing Continuing Professional Development to the large majority of science and physics teachers in the local area.” Philip Britton, Headmaster, Bolton School Boys’ Division

In 2010, Bolton School initiated the idea for a full time physics teacher based at the School, who also works in 17 local secondary schools, jointly funded by the School, the Institute of Physics and the Ogden Trust.

The Ogden Teaching Fellow has worked with teachers across 13 of the 17 secondary schools in Bolton in the four years of the project. Pupils from those schools have been involved in various science and physics related events as well across that time.

Portsmouth Festivities

“Portsmouth Grammar School is our major sponsor and stakeholder. The Festivities couldn’t happen without its support.” Samantha Worsey, Portsmouth Festivities general manager

Portsmouth Grammar is the co-founder and principal sponsor of the town’s Portsmouth Festivities, a ten-day festival in June, celebrating arts, culture and heritage in the great waterfront city. Headmaster James Priory is the Chairman of the Festivities. Now in its 15th year, the Portsmouth Festivities have developed a reputation for providing high quality large and small events with professional artists in the city’s unique venues.

Some events have hundreds of performers and thousands in the audience. Events take place across the city, from Gunwharf Quays, Portsmouth Dockyards to Portsmouth Grammar School itself in the school’s David Russell Theatre and Gatehouse Studios. The School provides major venues for events, housing the Festivities office and offering marketing, design, financial and IT support. Pupils and teachers at the school participate in drama groups, choirs and writing productions, as well as providing front of house staffing.

Bradford Chinese School

Bradford Grammar school has opened its campus to host another school: the Bradford Chinese School. Established in 2011, the school aims to educate children between 5 and 15 who are interested in learning the Chinese language and in developing an understanding and appreciation of Chinese culture. The school now has six classes and one adult class, providing an excellent and systematic education to more than 70 pupils. The school also provides art classes, teaching traditional Chinese brush painting by a professional art teacher.

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