BUILDINGS, MAINTENANCE & REFURBISHMENT
Rethinking school estates as a strategic lever
Long-held assumptions about financial resilience are being challenged, forcing school leaders to reconsider not only how they generate income, but how they manage and extract value from their existing assets.
At the forefront of these changes is the introduction of VAT on school fees - arguably one of the most significant structural shifts the sector has experienced in recent decades. For many schools, this has direct implications for affordability, disrupting previously stable patterns of demand and introducing volatility into financial planning.
H
elen Jude, Partner at Landwood Group, explains how struggling independent schools can look to their estates as a source of strategic value – from unlocking income to finding new uses for existing buildings to support long-term resilience.
The financial outlook for independent schools has shifted dramatically since 2024. What was once a relatively stable operating model is now defined by sustained cost pressures and far greater uncertainty around pupil demand.
This challenge is compounded by a broader set of financial pressures. Increases in employers’ National Insurance contributions have added to payroll costs, while ongoing commitments to the Teachers’ Pension Scheme continue to strain budgets. Meanwhile, the gradual erosion of business rates relief has removed a layer of financial protection that many schools had come to rely on. Together, these factors have contributed to a cost base that is both higher and less flexible.
Inflationary pressures have further intensified the situation and energy prices remain significantly elevated. At the same time, wage growth continues to push operating costs upwards.
In this climate, even relatively small changes in pupil numbers can have a disproportionate impact on financial performance, particularly for schools operating with tight margins. As a result, leadership teams and governing
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bodies are being compelled to act with greater urgency and precision. Financial planning is becoming more dynamic, with scenario modelling now a continuous process rather than a periodic exercise.
Schools are stress-testing assumptions, modelling a range of outcomes and preparing contingency plans to respond quickly to changing conditions.
Amid these pressures, one often underutilised lever for strategic decision-making is becoming more vital: the school estate.
Traditionally viewed as a functional necessity, the estate is now being re-evaluated as a core financial asset. Many independent schools are custodians of substantial land and property portfolios, often accumulated over decades. These estates may include a diverse mix of academic buildings, boarding facilities, sports infrastructure and undeveloped land. However, not all assets will be aligned with current educational delivery models or future strategic priorities.
This misalignment has led to a growing number of schools finding themselves in a position that can be described as “asset-rich but cash-constrained.” While they may hold significant value in land and property, this value is not always easily accessible or actively contributing to financial sustainability. In the current climate, this is increasingly untenable. A structured and comprehensive estate review is therefore becoming an essential starting point. By undertaking a detailed audit of their property
May 2026
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