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Schools are struggling financially due to Covid-19

By Harvest Thwala Time of article published Jan 5, 2022

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A growing unemployment rate and a shrinking economy left many South Africans under financial pressure.The Covid-19 pandemic and subsequent lockdowns resulted in a larger proportion of parents not paying school fees in full.

According to the Tenant Profile Network (TPN) Credit Bureau statement, over the past 18 months, this has impacted schools around the country as parents prioritise paying other categories of consumer credit such as mortgages or rent, credit facilities, secured credit and even unsecured credit rather than their children’s school fees.

“Payment of school fees is cyclical in nature, with the fourth quarter of every year typically representing the highest proportion of fees paid. This is likely due to the fact that some schools withhold report cards until fees have been fully paid up, or because parents receive bonuses and use this income to settle school fee arrears,” said the CEO of TPN Credit Bureau, Michelle Dickens.

Dickens said that this resulted in 66% of government schools and 65% of private schools having been forced to make budget cuts since the onset of the pandemic. Only 23% of government schools and 26% of private schools managed their budgets on the fees collected, while 11% of government schools and 9% of private schools were forced to use their reserves to cover expenses.

Prior to the pandemic, 75% of parents were able to pay their school fees. In 2020, during the pandemic, only 45% of parents had the ability to pay school fees.

“Given that schools rely on this income to meet their operational costs, the knock-on effect of this non-payment is that schools are struggling to meet their financial commitments.”

According to Dickens, a total of 34% of government schools and 62% of private schools prioritised payroll during the pandemic, while 42% of government schools and 15% of private schools prioritised capex projects. Repairs and maintenance were prioritised by 20% of government schools and 14% of private schools, while 3% of government schools and 9% of private schools prioritised retrenchment packages.

Of those schools that made payroll cutbacks, 38% of private schools cut back on permanent teachers. Government schools made no cutbacks on permanent staff as these employees are paid by the national Department of Education.

Private schools also cut back on administrative staff (23%) and groundsmen (22%). Only 13% of government schools, on the other hand, cut back on administrative staff. However, government schools made much bigger cutbacks on groundsmen (38%), temporary teachers (25%) and coaches (13%).

Overall, most schools did not terminate teaching positions, but they did reduce salaries.

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