Aberdeen’s prestigious Robert Gordon College (RGC) has staged a notable financial recovery after a difficult year – but new government policies are threatening to undo its progress.
The independent school saw its income increase to £25.3 million in the year ending July 31, 2024, an increase of almost £2m from the previous year.
Newly published accounts show a deficit of £67,000 before accounting for gains and losses on its investments and pension plans. This compares to a loss of £1.7m in the previous year.
The financial turnaround comes ahead of the impact of the UK government’s decision to impose 20% VAT on private school fees, which took effect in January.
Staffing costs remain the school’s largest outlay, accounting for £15.3m, or 71% of its fee income.
‘Satisfactory’ financial performance
The accounts show RGC employs 401 staff members – up from 390 – with an average annual fee of £15,077 per pupil.
The gains in income were offset by rising expenses, including maintenance to the college campus. The school had 1,527 pupils during the financial year.
The school’s annual report said: “The overall financial performance in the year is considered satisfactory.
“Operational results were in line with the budget, recording a small deficit increased by planned non-recurring costs related to essential building façade and swimming pool maintenance in the summer holidays.
“Careful cash management enabled a much-improved positive cash generation from operating activities of £1,680,000 (2023: £668,000).
“Donations received in the year were £389,000, a significant increase despite there being no public fundraising campaign and the challenging economic environment.”
20% VAT on school fees
RGC has warned it faces added pressure as VAT on school fees begins to take its toll.
The tax, introduced in January, has already caused some families to withdraw their children from the school, and further disruptions to education are expected.
While fully-funded bursary spaces are exempt from VAT, families receiving partial bursary support have been hit hard.
Head of Robert Gordon College, Robin Macpherson said: “Some very talented and deserving pupils have been forced to leave RGC due to the introduction of VAT.
“Behind every policy is a family, and in these cases, children’s education has been disrupted.
“We are forecasting a slight decrease in pupil numbers in August, which we have planned for and factored into our budget.
“There is no doubt families have had to leave RGC due to the tax on education.
“However, we are in a better position as a large urban day school, as the impact has been harder on schools that are smaller, in rural areas, and that have boarding.”
The school said that despite the financial pressures it is increasing subject choices, creating an online educational platform and developing new learning spaces.
Conversation