8th December 2021
In December 2021, FPE and GK Strategy co-hosted a roundtable event, bringing together a group of leading businesses in the schools technology market. The event was Chaired by David Laws, the former Minister for Schools, and current Executive Chairman of the Education Policy Institute and Senior Advisor to GK Strategy. David provided his thoughts on the challenges facing schools for the next decade and led a conversation around how EdTech can be a part of the solution.
Here are our five key takeaways:
1) Schools have been hard hit by the Coronavirus pandemic
Schools across the UK were facing challenges prior to the pandemic. In England, a third of sixteen year olds were not mastering English and Maths to a satisfactory level, and there was an already worrying trend around deteriorating mental health, particularly amongst girls in their later teenage years. In recent years the UK has faced a specific challenge educating students from disadvantaged backgrounds, with the most disadvantaged students on average falling two years behind their better-off peers.
In March 2020, schools had to rapidly shift their approach to support home learning, and have subsequently managed bubble systems, staff shortages, reduced levels of student engagement, and increasing numbers of mental health issues. In spite teachers’ heroic efforts, students across the UK have significant “learning losses”. According to a report written by the Education Policy Institute for the DfE in October 2021, by June 2021:
- Average learning losses for primary school students were 2 months in maths and one month in reading, and secondary school students still remained a month behind in reading.
- Learning losses for disadvantaged pupils have been larger than for their affluent peers throughout the pandemic. At secondary school level, learning losses in schools that have a high proportion of pupils from disadvantaged backgrounds were around 50% greater than those schools with few pupils from disadvantaged backgrounds.
- Students in the South of England have smaller learning losses than the rest, whilst some students in the East Midlands are six months behind in Maths
2) Moving forward, school funding could be a barrier to progress, particularly around teacher recruitment and retention
According to a report published by the Institute for Fiscal Studies, between 2009 and 2019 spending per pupil in English schools fell 8% in real terms. Since 2019, spending has risen by about 8% in real terms, but still remains below 2009-10 levels.
In the long term, historical data suggests that per pupil spend grows with the economy. However, in the last fifty years the UK’s ageing population has changed the mix of government spending; in the 1970s 7% of GDP was spent on education and 4% on health. Today that’s reversed, with 7% spent on health and 4% of education. This demographic shift will exacerbate the strain on future school budgets.
Real term spending per pupil cuts have been reflected in acute teacher recruitment and retention challenges. According to the an EPI report published in 2019, the number of teachers in England fell by 7% from 2007-2019, whilst pupil numbers remained the same. They also found that one in five teachers leave the profession after their first two years, and two in five leave after five years. The challenge is greatest in subjects such as maths and the sciences, where graduates with degrees in those subjects can be paid far more elsewhere.
In April 2021, a National Education Union survey suggested that one in three teachers planned to leave the profession within five years, with 95% reporting that they were concerned about their mental health. Some of the most common reasons for wanting to leave the profession included workload (51%) and pay (24%).
3) Teachers adopted EdTech faster than ever before during the pandemic, and schools’ approach towards technology has permanently shifted
According to a UK Government Survey, the majority of schools invested in new technology in response to Covid-19.
Without technology, teachers would have found the delivery of remote learning throughout the pandemic almost impossible. Cloud-based applications such as video conferencing, online learning platforms, and parent portals, coupled with mobile devices and connectivity, allowed teachers to reach students in their homes and continue to progress learning.
As a result, since March 2020 almost all teachers have learned how to use new software and features, and the majority of teachers believe that new technology will help them deliver better remote and in-class education in the future. Participants in our roundtable discussion felt that even if some technologies are not suitable for in-class learning post the pandemic, the pandemic has shifted teacher mindsets permanently and pushed technology further up the school agenda.
4) EdTech can help schools overcome some of their most significant challenges, but teachers are not totally satisfied by what is currently available to them
The ultimate aim of technology in schools is to improve student learning experiences and wellbeing. Often EdTech achieves this indirectly by reducing the administrative burden on teachers, freeing up their time to focus on more important and satisfying work.
In spite of increased technology adoption in schools, the UK government recently surveyed 2,555 headteachers, teachers, and technical staff, and found that teachers are “quite” but “not overwhelmingly positive” on the use of technology in schools. 65% of respondents felt that tech contributes to a reduced workload, and 84% believed that it could improve attainment. However, the survey uncovered some clear areas for investment:
- Teachers think that administrative software works well in schools, but learning software is more of a mixed bag. One in five teachers stated that online learning software fell short of expectations during the pandemic, and teachers would like to see more investment in platforms that support blended learning
- Assessment is still a key area where teachers feel they are under-served by technology
- Teachers feel that SEND students are particularly under-served by technology, particularly around online learning
5) The UK schools technology market is rapidly consolidating, but some companies are achieving standalone success through different growth avenues
In recent years, the UK schools technology market has been consolidated by three major private equity backed players:
- Access Group (backed by HgCapital and TA Associates) acquired HCSS Education (2016), My School Portal (2021) and Soundbite Learning (2021).
- IRIS Software Group (backed by HgCapital and ICG) acquired ParentMail (2017), iSAMS (2020) and Every (2021)
- ParentPay (backed by Montagu) acquired ESS in 2020 (formerly Capita SIMS)
There are a number of reasons for this consolidation. Firstly, the UK market opportunity is constrained, the cost of acquiring schools as customers is relatively high, and historically teachers have been slow to adopt technology. For a smaller standalone company these dynamics are hard to overcome. However, the likes of Access Group and IRIS have realised that if you own a suite of platforms with existing relationships, you can efficiently win customers by cross-selling offerings.
Secondly, achieving success for entrepreneurs in the schools technology space can be a long journey. Over the course of the pandemic, the financial performance of many EdTech providers improved. Couple this with technology valuations at an all-time high, after years of hard work many entrepreneurs decided that it was the right time to sell their company.
However, a number of entrepreneurs in the sector have proven that huge success as a standalone company can still be achieved. For example, some schools technology providers like Impero and Firefly took the UK as a starting point, but widened their addressable market by successfully expanding internationally. Other providers, such as Atom Learning and Seneca Learning, have reduced their cost of acquiring customers through a go-to-market strategy that targets learners and parents through the online channel, creating self-perpetuating ecosystems that reduce the need for direct sales.
We would like to say thanks again to David Laws, GK Strategy, and all of the attendees who attended the roundtable event.
At FPE, we are also on the lookout for opportunities to invest behind software and services providers that are taking advantage of the changing EdTech landscape. If you are interested in a conversation please reach out!