EXCLUSIVE | The report that spells the end of private independent schools

A declining birth-rate and higher salaries for teachers are threatening the very survival of private independent schools, a confidential report by auditors PricewaterhouseCoopers for the Independent Schools Association (ISA) has warned.

The ISA wants government to pay some €17 million over the next decade, in the form of tax credits or a “voucher system” for parents to send their children to private schools, and finance the ever higher cost of private education.

The ISA will tell government it already costs less to educate a student at a private school (€1,655 a year, compared to €2,217 for State school students), but it gets little help from the State. But if private schools close down, the cost to absorb these students into the Church and State schools would be as high as €3,000 per head, the ISA argues.

As the Junior Lyceum exam is phased out for State schools this year, and a €20 million Church school expansion expected to create 2,000 new places, the ISA fears a smaller supply of students will mean its members will have to either close down their schools, or significantly downsize their operations because of this 'loss in business'.

“The current financial situation facing the schools threatens their long-term viability… the spiral would be one of higher costs, reducing student population and sharp fee escalation, leading to further reductions in student numbers, until one is left with a handful of elite schools catering for a tiny minority of students,” the ISA warns.

The report ominously warns that if school fees increase, it will “increase family tensions as parents struggle to cope, together with a negative impact on the country’s birth rate.”

To ensure their survival, the ISA wants government to issue education vouchers to parents for a pre-established amount to part-pay tuition fees. The annual vouchers would be settled against income tax or national insurance contributions paid by the schools.

Government already offers parents who send their children to private schools some €2.7 million in tax rebates (approximately €395 per student) and spends some €200,000 a year on learning support assistants for these children.

With the ISA’s proposals, government subsidies would increase to €730 per student, “still considerably less than the comparable average costs per student in State schools,” the ISA argues.

The ISA is also ruling out asking parents – who pay an average €1,000 for kindergarten education, to €3,500 for secondary education – for more money. “The increases applied in the last two years have taken school fees to the limits of affordability… This opinion, which is strongly held by the sector, is born by the continuous communication with parents.”

Prime Minister Lawrence Gonzi has described independent schools as a “crucial link” in the education system, and believes parents should have choice when it comes to their children’s education.

The ISA will try to win over the government’s support by saying that the State will have to pay anything up to €3,000 for each student to absorb them from independent schools, into government or Church schools.

The main reasons why the ISA says it may see its schools close down is mainly due to a 2009 collective agreement finalised with the teachers’ union, which increased their payroll costs by €800,000, but fee increases that year were not enough to absorb the increase.

Concurrently, a declining birth-rate will see the student population expected to decline from the present 58,000 to 53,000 in 2020. With the expansion of Church schools, independent schools are in a quandary over their very survival: while they cater for over 7,000 students now, they are not expecting more than 5,000 students by 2020.

By the end of 2010, these schools are altogether expected to incur €462,000 in net losses. By 2013, they will be losing €1.6 million every year.

Education provision in Malta
Unlike Church schools, independent schools receive little funding from the State. Church schools are funded by government in accordance with the 1991 agreement with the Holy See, which transferred the major part of its properties to the government. This year alone, the government will pay €38 million in teachers’ salaries from pre-primary, to post-secondary schools run by Church orders. The Church will create an additional 2,000 places with a €20 million expansion it will fund.

Admission to Church schools is administered by ballot, while those providing secondary education only admit students through the Common Entrance examination, which is to be discontinued as from 2011.

The State provides free education, school transport and textbooks for government school students, equivalent to 61% of the total student population up to Form V. At the end of primary school, students sit for the 11-plus exam, which will determine whether they are streamed into Junior Lyceums, or area secondary schools, which are now about to phased out.

As of 20111, Junior Lyceum exams will be stopped and students will progress from primary to one of 10 colleges completed in 2007.