Scotch College

A Wealthy School?

Michael Robinson AO

Scotch is referred to frequently as a wealthy or well endowed school, particularly in the context of the present debate regarding Government funding for non Government schools.

Scotch is “wealthy” in the sense that it had the foresight 90 years ago to acquire the superb site at Hawthorn. It is “wealthy” in the sense that successive generations of the Scotch Family have given generously for the development of that site with the buildings and other physical improvements which we enjoy today.

The money was donated by the Scotch Family for the sole purpose of providing buildings such as the Memorial Hall, the James Forbes Academy, the Junior School and the Lithgow Centre. It would not have been lawful for it to be used for any other purpose.

With two exceptions, the whole of the money used for the acquisition and development of the Hawthorn Campus has come from the generosity of the Scotch Family; not from the Government, not from the Local Council, not from the Church.

The two exceptions were Federal Government science grants of $140,907 in 1967 and $132,000 in 1976-7 towards the cost of the Science Wing of the second quadrangle.

For the sake of completeness, I should add that Scotch received $4.1 million in compensation for land lost in the expansion of the South Eastern Arterial Road. Of this amount, $500,000 was spent on replacing lost facilities (the boat ramp and practice cricket wickets), $1 million was used to obtain improved sound barriers and the balance is applied to acquiring substitute land to replace that which was lost.

Scotch is not “wealthy” in the sense that it has a significant recurrent stream of income to meet annual expenditure. Scotch has been endowed with Trust Funds principally for scholarship purposes. Some of those scholarships are administered by trustees outside the School and many are means tested in the sense that they are available only to boys whose parents otherwise could not afford to send their son to Scotch. The annual income from those Trust Funds is a little over $700,000 or less than 2% of annual expenditure.

Scotch is “wealthy” in the sense that it has a highly professional, dedicated and well resourced teaching staff. It is also “wealthy” in the sense that it has the support of a school community which devotes time, enthusiasm and energy to complement the vitality of life at Scotch.

It has been suggested that high quality physical facilities should mean that Scotch parents receive a lesser (or no) contribution from the Government towards school fees payable for recurrent annual expenditure. This proposition is absurd. At Scotch we don't consider it an option to sell off a building or two (or perhaps the forward pocket of the Main Oval) to pay teachers' salaries for a couple of years.

The Annual Budget

Scotch is a not for profit charitable institution and survives successfully on the financial discipline of expenditure not exceeding income. The School Council endeavours to keep school fees as affordable as possible for parents and is conscious of the great sacrifice made by many parents to enable them to send their son to Scotch. At the same time, it is imperative that we strive continually to develop and improve our academic and extensive co-curricular program.

The recently adopted 2005 Budget for Scotch College shows expenditure as follows:

To meet this expenditure, the School's income will be as follows:

In 2005 the State and Federal Governments are expected, in aggregate, to pay Scotch $2,100 per Senior School student and $1,530 per Junior School student mostly based on a formula tied to the annual recurrent cost of educating a student at a Government School.

In accordance with the standard practice adopted by Scotch over many years, these amounts will be credited to parents' fee accounts and the amount actually payable by parents will be reduced accordingly. Any variation in the subsidy from Governments will flow directly to parents' fee accounts. In substance, the contribution from Governments are not for the benefit of the School but are a subsidy for fee paying parents.

We expect to have 25-30 overseas students at Scotch in 2005. Government grants are not made in respect of these students and accordingly, their fee accounts do not include the reduction given in respect of all other students.

By way of comparison, it should be noted that the total Government recurrent expenditure per Government secondary school student in 2001-2 was $9,856. It is expected to be over $11,000 in 2004-5. Nearly all other non Government Schools receive per student Government funding of a higher amount than that paid in respect of students at Scotch. Put another way, the parents of children at most other schools receive a greater (and in many cases significantly greater) fee subsidy than that received by Scotch parents. At secondary level, Scotch parents receive the lowest Government fee subsidy of any APS School.

Scotch is asked frequently why do school fees increase at a greater rate than inflation as measured by the Consumer Price Index.

As can be seen from the chart on page 2, the major part of expenditure at Scotch is for salaries (over 60%). During the last 10 years, salaries and wages in Australia as measured by AWOTE* have increased by 4-5% pa. Continual improvement in the quality and breadth of education adds further to the growth in annual cost. The Federal Education Department has projected that between 1996 and 2004 the recurrent cost per Government School student will have increased by 63.5% compared to an estimated increase of only 21.5% in the Consumer Price Index over the same period.

The quality of the teaching staff is fundamental to what we do at Scotch and the policy of the School is to provide financial reward and opportunity for professional development to ensure that we recruit and retain staff of the highest calibre and provide an environment in which their professionalism can flourish.

The following table about Scotch is instructive.

	1995	2005
Student Enrolments	1,876	1,843
Teaching Staff	139.5	163.7
Student Teacher Ratio	13.4	11.3
Ancillary & Computing Staff	20.7	33
Administrative Staff	38.5	35.5
Maintenance and Ground Staff	23.2	23.2
Total Staff	222	255

(All staff numbers are expressed as Full Time Equivalent.)

The reduction in the student staff ratio and the necessary increase in Ancillary and Computing Staff alone has added over 2% per annum to school fees during the past 10 years.

Scotch remains committed to improving continually the academic and co-curricular program provided for students as it has done for the past 150 years. Whilst we always seek to do things more efficiently, the gains in financial terms are modest. They are counter balanced by other expense increases such as additional cleaning and utility costs in the James Forbes Academy.

An argument currently being pursued is that because Scotch parents pay substantial school fees (partly because Scotch parents receive a comparatively small level of fee subsidy from the Government) they should get an even smaller (or no) amount of Government subsidy towards those fees. On the other hand, a parent who pays a lower level of school fees (significantly because they now receive a higher Government contribution) should get an increased level of subsidy. The logic is elusive or more accurately, convoluted.

Scotch has been committed to providing an excellent education to successive generations of students for more than 150 years through the dedication of its staff, the foresight of many former students and other benefactors and above all, the commitment and financial sacrifices which parents have made to enable their children to attend the School. It is financially discriminatory and spiteful to advocate the reduction of the comparatively low level of Government support presently provided to Scotch students thereby penalising the very parents who already are bearing far more than their fair share of costs in educating their children.