Private schools face fight to survive amid competition

DUBAI // Private schools face a battle to survive amid increasing competition for fewer pupils and the need to raise salaries to attract the best teachers.

The number of schools is expected to increase from 1,184 in 2014 to 1,406 by 2020, fuelled by high, tax-free family incomes – but there are challenges ahead.

With 173 private schools already in Dubai and a further 20 due to be opened by next year, the market may be shifting to an oversupply of school places, leading to greater competition and pressure on revenue.

“I think with so many new schools opening that we might be approaching a saturation point where places outstrip the number of pupils,” said Natasha Ridge, executive director of the education think-tank Al Qasimi Foundation in Ras Al Khaimah.

“This coupled with trying to pay higher salaries for the best teachers means there will be more downward pressure on profit margins at private schools.”

This could also lead to lower-income schools stuck in a vicious cycle in which they cannot attract good teachers and so standards decline.

“It could mean that some of the smaller ones don’t survive and the market consolidates around three or four major education providers.”

Many teachers also felt they were becoming “de-professionalised” because of the lack of worthwhile training and career development at their schools, Dr Ridge said.

A new report on education in the GCC says governments in the region continue to invest in the sector, but continued lower oil prices may have an effect.

“We could see cutbacks in other sectors or less spending on infrastructure, which will mean fewer expatriates coming and others leaving,” said Mahboob Murshed, managing director of the investment bank Alpen Capital, which produced the report.

“However, we feel that due to the UAE’s more varied economy it will be less adversely affected than, say, Saudi Arabia.”

Recruiting and retaining quality teachers will also prove costly to school operators, Mr Murshed said.

Cultural differences, poaching by other countries in the region and the transitory nature of the expatriate lifestyle made it hard to maintain teacher numbers. “We find that many teachers only stay for an average of two years so schools have to constantly look for new staff.”

Mohan Valrani, chairman of the Arcadia Preparatory School in Dubai, said that the increasing number of schools was making private education a buyers’ market.

“With the opening of schools this year, for the first time we will see a situation of more seats than students,” he said.

“Availability of skilled teachers remains a major challenge. To cope with growing competition, schools need to be willing to change in line with technology and be able to finance this change.

“Offering continuous professional development for teachers is also very important.”

It a common problem across the GCC and has led to more competitors poaching skilled teachers with greater incentives, Mr Valrani said. This put more pressure on operating costs to meet higher salaries.

There are an estimated 1.1 million students in the UAE attending private and public schools, universities and higher education, a growth of 6.2 per cent since between 2009 and 2014.

According to the Alpen report the UAE allocated 21.2 per cent of its Dh48.48 billion budget for this year to education, putting it second in the region to Saudi Arabia on 22.8 per cent, but well ahead in percentage terms of developed countries such as the US, UK and Germany.

Two-thirds of K-12 enrolments were at private schools making it the highest in the GCC. “The number of students attending private schools across the K-12 education system increased by more than 7 per cent annually between 2009 and 2014, faster than that at primary and secondary public schools,” said the report. “The country has the largest number of English-medium international schools in the world and a growing preference for international curricula among both expatriates and nationals.”

Overall the total number of students in the GCC is projected to reach 15 million by 2020 at a compound annual growth rate of 3.6 per cent from 12.6 million in 2015.

The trend is for more international schools in the GCC together with greater use of technology to support learning.

Governments in the GCC, particularly the UAE and Qatar, have placed greater emphasis on higher education to help solve the skills gap required by the labour market.

And both countries are emerging as regional education centres for higher education as they are now home to many international universities and institutions.

Clive Pierrepont, director of communications in the UAE for Taaleem, one of the largest education providers in the Middle East, struck an optimistic note.

“There is a growing preference for international curricula, especially the British curriculum,” he said.​

“This coupled with trends including increasing confidence in the region, shifts in technology, new school places to meet demand and linking the chain of schools, universities and other higher education institutions with potential employers, will contribute to the growth of the sector.”

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