Preparing for Covid-19 Closures - Pt1: Advice for School Business Managers:

The following advice is offered to fee-charging schools (UK Independent Schools and International Schools) on how they should prepare for Covid-19 closures in light of our experience in Hong Kong.

School Site Preparations 

Schools obviously need to follow the medical advice issued in their local jurisdiction. However, schools should prepare for this this by endeavouring secure essential supplies.


In advance of this, schools would be well advised to order stocks of:

1. masks; 
2. hand sanitizer – install more permanent points around the school; bottles need to be available in every classroom, if supplies allow; 
3. cleaning fluid; 
4. "pistol-style” thermometers as these are most effective for monitoring temperature on entry to the school; 
5. toilet roll! 

Put in place other measures and protocols: 

1. Reduce the number of points of entry to the school site so that each point can be supervised (heat checks, hand sanitization, travel declaration etc.); 
2. Create travel declaration forms: everyone coming onto site to make a declaration re. their travel history during the past 14/28 days and warranting that they have not knowingly come into contact with anyone who has the virus; 
3. Arrange for more regular cleaning of the school site: - 3 or 4 times a day; This may entail limiting the use of the site; 
4. Keep internal (non-fire) doors open to reduce the amount of physical contact that staff and students have with door handles ; 
5. If disinfectant supplies are low, consider draining the swimming pool – swimming pools use up significant cleaning resources: the double concentration used to clean the poolside for a week can be watered down to clean the school for a month. 

Financial Preparations – “Cash is King” 

One of the challenges that faces fee-charging schools at this time is that they are likely to be sending out the Term 3 fee bills during when the school is closed for an uncertain period of time. It should be recognised that most schools have little choice but to so this for reasons explained below. Bills are never popular and this is all the more the case where there is a perception that they are being charged for a service which they are not receiving. In addition, schools are likely to be faced with requests for refunds on any extra-curricular activity (ECAs) fees, bus fees, and charges for instrumental music lessons. 

Most schools operate with limited cash reserves (usually about 3 months/ a term's fees). Schools therefore should make preparations for late or non-payment, demands for fee reductions, children being withdrawn from the School at no notice, and the cost of a proportion of associated legal disputes. Whilst robust parent-school contracts might mean that these issues are likely to be resolved in the school’s favour in time, short-term non-payment does pose a significant problem for schools. Whilst school fees make up the lion share of a school’s income, be aware that a Covid-19 closure is likely to have a significant hit on the income from term-time and holiday lettings. 

With three payment points each year, the cash-flow cycle for schools is lumpy at the the best of times. This particular crisis could not have come at a worse time of year, for, typically, the Term 3 fee round has to fund five months of teachers’ salaries (April to August), end of service gratuities (if applicable) and a portion of summer works. Because of these factors, schools need to put in place measures to shore up the school’s cash position. This is easier said than done. Schools have a much higher proportion of fixed committed expenditure than many other industries: teacher salaries typically account for 75% of a budget. In practice there is very little flexibility. 

Schools therefore need to look into ways of preserving cash by looking for payment holidays on any borrowing, increasing lines of credit with their bankers, as well as delaying any discretionary expenditure (e.g. summer works). Furthermore, requests for refunds for ECAs, bussing and Music Lessons are best managed by giving credits for the following term, rather than giving full refunds, thus preserving cash. 

From a parental perspective schools fulfil three functions: first, teaching and learning – the preparation for examinations and university entry; secondly, easy access to an extra-curricular programme; and, thirdly, childcare. The relative importance of each of these aspects varies depending on the age of the child. When schools are closed for long periods of time, as necessitated by the Covid-19 virus, schools are only able to fulfil the first of these functions. In the medium term, schools will need to decide if they are going to offer a discount or a fee freeze in order to appease or retain parents. This is likely to vary between schools and context, depending on future demand for places at the school.