The recent media interest in alleged over-funding of private schools has caused quite a stir in private and independent school communities. 

While the media interest pertains mostly to elite private schools seen to be spending significantly on capital works, such as Olympic-sized pools, there is concern among financially modest private schools that it could prompt our government to adopt a broadbrush approach to address the issue. 

While elite schools often benefit from substantial endowments sourced from within their school communities, which typically fund these types of capital works, there are many other private and independent schools that do not enjoy this privilege. This is particularly evident in private schools located in regional or disadvantaged areas, where parents may opt for private education over the public system due to religious or educational philosophy beliefs.

Any blanket approaches to address a perceived advantage of private over public education could have disastrous consequences for these schools and the families they serve. 

Planning for the possibility of funding cutstraining

Of course, applying this logic to the topic at hand does not eliminate the possibility of it happening. 

We have engaged with many private schools in recent months which are concerned about potential funding cuts, particularly at a time when cost of living pressures and increasing interest rates are already placing significant strain on finances. 

Some charge very low fees for students to attend, and have generally relied on generosity within their communities to maintain financial stability alongside government funding. With both at risk, how is a private or independent school able to ensure its sustainability and continue providing quality education?

The inadvertent impact of over-spending in elite schools is indeed a challenge worthy of greater attention, including prompting average private schools to re-assess their funding models and contemplate if changes are (or could be) necessary. 

This might involve evaluating existing and future capital expenditures to ensure sufficient contingency planning in case of funding constraints. For example, a growing school may have committed to a new building for specialised study areas (such as a senior science block) which is entirely necessary to provide the level of education they aspire to. 

However, if funding constraints were to threaten the development of this building, other options must be considered to protect the school’s financial viability. This could involve:

  • purpose-driven fundraising initiatives
  • discussions with lenders regarding pay-back periods
  • modifications to the building design

It would also be useful for private and independent school communities to monitor government announcements and maintain close ties with their local members. These representatives may be able to propose fair alternatives in the event of any proposed broadbrush-style changes.

On the flip side, well-to-do private schools should not shy away from the discussions and must remain vigilant about the potential impacts that funding changes could have on their financial state. 

It’s no easy task for a school’s executive team to cultivate an admirable educational environment while efficiently managing multi-million dollar budgets. Sometimes it’s necessary to seek objective strategic advice to help carry the load and ensure funds are being directed in the most responsible and strategically beneficial way. 

Scenario planning with experts

There is no one-size-fits-all solution to the apparent inequality between elite schools and average private schools, independent schools, and public schools. 

Any attempt to devise a one-size-fits-all solution would threaten the very foundation that supports the autonomy and diversity within Australia’s education system. 

But it is a wise course of action for all private and independent schools to take stock of their current and potential financial positions, and have contingencies in place for various future scenarios. 

It’s here that RSM can play a strong supporting role in helping your private or independent school navigate financial challenges and develop sustainable strategies for long term success.

We can provide:

  • comprehensive financial assessments
  • a review of direct funding
  • scenario analysis 

You can also ask us to assist with cashflow planning and strategy, which is particularly important if your funding model were to change. 

No one knows what the future holds, however recent years have certainly shown us that even a little forward thinking can go a very long way towards ensuring resilience and adaptability in the face of uncertainty.


To learn more, or to arrange a confidential discussion about financial analysis and future planning for your school, please contact Andrew Bowcher on (02) 6937 7001 or your local RSM office.