Boom in low-fee private schools
At the Spark school in the Johannesburg suburb of Bramley, the pupils wear neat khaki shorts and skirts and navy golf shirts but they come from very different backgrounds. Some arrive by minibus taxi from Alexandra and those who live in Melrose are dropped off by luxury cars like Range Rovers.
Quality independent schooling such as Spark, priced at R19 100 a year, means families with widely different incomes can afford to, or simply choose to, send their children to low-fee schools.
The government pumps large sums of money into the basic education system — it is the largest item in the budget — but it struggles to keep up with the growing need for quality education. In Gauteng, a burgeoning population puts increasing pressure on public services, including public schools, and stepping into the gap with gusto is the private sector.
Such has been the growth of private low-fee schools that they make up one in four of all schools in the province, although they are often housed in unconventional accommodation, including in former office blocks and other commercial properties. This is taking place despite the fact that the government has been rolling out on average 14 public schools a year in Gauteng in recent years.
According to 2013 statistics from the department of basic education, 10% of pupils in Gauteng attend independent schools, which is substantially higher than the national figure of 4%.
These schools typically charge between R1 500 and R2 000 a month, the second amount being similar to what former model C state schools charged in relatively affluent areas.
Lebogang Montjane, the executive director of the Independent Schools Association of Southern Africa, the largest independent school organisation in the region, said, among the association’s membership, the growth was primarily in Gauteng.
He said he suspected low-fee or affordable schools were “the new gold rush”. “Every other day I am hearing about yet another group entering the market.”
Independent schools such as Spark Schools are growing rapidly. Spark Schools launched its first school in Johannesburg’s Ferndale in January 2013, where it enrolled 160 pupils. In 2017, it will educate 4 800 at 10 primary schools in Gauteng and one in the Western Cape.
Spark School’s mission is to provide high quality education at an affordable cost. “We benchmark our total cot to educate against government’s total cost to educate a child,” said Stacey Brewer, the chief executive and a cofounder of Spark Schools.
In 2017, Spark Schools fees will be R19 100 a year, Brewer said, which compares favourably with JSE-listed education companies such as Curro and ADvTech, which can cost more than R25 000 a year.
Montjane said state school fees could be as much, and even more.
Research on affordable schooling by the Centre for Development and Enterprise (CDE) shows there is a global move in both the developed and developing world to address gaps in the education sector. In South Africa, private schools for low-income people are becoming an increasingly important part of what is known as the independent schooling sector.
But the CDE’s research has criticised these schools for not catering for the poorest South Africans, and suggests that, to be truly low-fee, the cost for a pupil should be less than R7 500 a year.
Montjane agreed and said these affordable schools — with affordable being a relative term — appeared to be catering for lower-middle-class families. The rapid growth of the black middle class was spurring on the growth of independent education.
A 2013 study produced by the University of Cape Town’s Unilever Institute of Strategic Marketing found the black middle class, which doubled in eight years, was investing has heavily in education, with 65% sending their children to former model C public schools or private schools.
At a recent conference, Discovery chief executive Adrian Gore presented statistics showing that the black middle class is now larger than the entire white population in SA.
Spark Schools has indicated that the majority of its pupils are black and the affordable schooling group Curro has reported that 64% of its pupils are black.
Pupils are enrolled in low-fee independent schools not just for reasons of cost but for quality too.
Spark Schools does not screen children but Brewer said their pupils outperform those of public schools by at least one grade level — in other words, a pupil in grade two at a Spark school is outperforming a pupil in grade three at a neighbouring public school. “When our kids go to through to other schools, they find they are advanced,” she said.
Curro, which is South Africa’s largest private sector schools operator, has declined to give media interviews but its 2015 annual report shows that its pupils on average get at least one A grade.
Brewer said Spark Schools uses a blended learning model, which involves direct instruction and technology-based learning. The curriculum is aligned with government’s National Curriculum and Assessment Policy Statement.
The Spark Schools staff complement was 280 in 2016, with 50% of those being academic personnel. Though the teachers can join unions, this has not yet presented itself as a major force at Spark Schools.
Many critics claim that the South African Democratic Teachers’ Union has a stranglehold on the public schooling sector and has caused pupils to lose out on many school days because of strikes.
Brewer said Spark Schools staff members who are not up to the challenge don’t last long. “If, for example, there is a wrong hire, we find people tend to remove themselves. There is a strong sense of accountability and service to our children and their families. People are attracted to Spark as there are opportunities for growth.”
Brewer said Spark Schools aims to open more schools in transition areas, which the group has termed “Goldilocks zones”. These are ideally located between affluent and less well-serviced areas — Bramley is midway between Melrose and Alexandra — although land availability restricts these ambitions.
Spark Schools is not drawing pupils from government schools in the areas in which it sets up. Instead, it has found its pupils move from other private schools.
But equally, Montjane said, he observed a migration back out of low-fee schools. “When big for-profit players enter the market, it does sometimes create disruption where parents move over for what they see as more value for money.
“But we do also see return migration, when some come to realise the sacrifices they were making for what they perceived as more value were in fact not worth it.”
He said he is sceptical about the perceived growth potential in the market. “I’m taking a wait-and-see approach. I have a real feeling low- to mid-fee independent schools are the new gold rush. I think we could see a lot of consolidation in the medium to long term.”
Curro, on the other hand, projects a strong demand and potential for its services, citing the government’s significant backlog in the provision of schooling as a reason for the independent school sector to grow further.
The backlog in rural and underdeveloped areas, where a greater need exists, means the public sector cannot serve newly developed middle- and upper-income residential areas. This in turn puts pressure on existing schools and offers an opportunity for the private sector to move in.
Burgeoning Gauteng gets the lion’s share
The growth in private sector schools is concentrated in Gauteng, which comprises the largest share of the South African population — about 13.5-million people, or 24% of the population.
In the past five years, migrants to the province were tallied at 1.2-million, according to Statistics South Africa, putting increasing pressure on public services.
According to the department of education’s statistics, between 2010 and 2013, 41 new public schools were established in Gauteng.
In the same period, although coming off a significantly lower base, 123 independent schools were established.
The largest independent schooling group in the country, Curro, has a footprint in all nine provinces but the highest number of its schools are in Gauteng.
According to Curro’s interim report, in 2016, nine new campuses, worth R950-million, are under construction. All but one — in the Western Cape — are in Gauteng. Also planned is a R500-million expansion of existing campuses and R360-million for “land banking” (the acquisition of land for the development of schools) in the next 12 months.
Lebogang Montjane, the executive director of the Independent Schools Association of Southern Africa, said the association was facing a serious strategic consideration — how it can increase its members in the inner city of Johannesburg.
“Previously a commercial centre, the CBD [central business district] itself is increasing in population density,” said Montjane.
Office buildings have been renovated to provide affordable housing but there are not enough schools to cater for these new residents.
“As a result, independent players have entered to meet the needs of children.
“Just the other day I saw across from Park Station, where there used to be a nightclub and office, is a school. The kids were playing in what was commercial space.” — Lisa Steyn
There’s a big opportunity for growth
Of the 12.9-million pupils in South Africa, it is estimated that 2.3-million (18.3%) can afford some form of private schooling, according to Curro’s interim report, which draws on data from the department of basic education in 2015.
Currently, 4% of the national total are in private schools but the market potential is estimated to be 12%.
Lebogang Montjane, the executive director of the Independent Schools Association of Southern Africa (Isasa), said low- and mid-fee schools were working increasingly with the developers of mid-priced housing projects to service them whereas the government was largely servicing the needs of existing residential areas.
The Centre for Development and Enterprise found the tuition fees of low-fee schools are high compared with those in India and Kenya, probably reflecting comparatively high input costs and low subsidies.
In 2016, Isasa members’ fees ranged from zero to R250 000 a year, with only 30 of its members receiving state subsidies. To qualify for a subsidy, a school cannot charge a fee of 2.5 times more than a public school’s spend per pupil. It must also be a nonprofit operation.
Montjane said the subsidy demonstrated that the rise of affordable independent schooling did not disrupt the public schooling system but complemented it. “The national government of South Africa takes a view that the education of all South African children is its responsibility,” he said.
But, he said, cost was only one part of the consideration when parents select a school, with proximity and ethos sometimes being more important. — Lisa Steyn