Lomond School: Future in balance amid £1.2m deficit

Newly-filed accounts for Lomond School revealed significant cashflow problems and a deficit of more than £1.2 million – and disclose that talks were held with “a major UK-based schools group” to secure Lomond’s long-term future.

The school says the accounts are now “historical” and “in line with expectations”.

Delayed documents submitted recently to Companies House, covering the 12-month period up to July 2023, exposed the extent of the monetary challenges facing Lomond School as the Stafford Street establishment approaches its 50th year.

Though the accounting period covered by the documents ended more than a year ago, the accounts weren’t filed with Companies House until August 30 and were published on the government body’s website earlier this month.

The latest filing states that the school has “continued to encounter challenging trading conditions during the year” - citing '”substantial” rises in teachers' salaries and the costs of utilities.

Additional loans - totalling £500,000 - have since been received this year, after the reporting period, from the spouse of Alistair Hart, chair of the school’s board of trustees, and director Christopher Bull.

Mr Hart’s report reveals that a new three-year business plan has been developed to restructure the school and make it fit for the future.

In the report, Mr Hart said: "Issue of these financial statements was delayed whilst discussions with a major UK-based schools group were under way to secure the long-term future of the school.

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"Recognising a material uncertainty remained on the school's ability to continue as a going concern, additional related party loans were used to support cashflow over the summer and the trustees have now developed a three-year business plan.

"This will enable the school to restructure and provide financial resilience, whilst safeguarding the core values of the school and the quality of education and care provided."

The report added that the school's trustees are 'reviewing how best to capitalise' on the value of its property and buildings going forward.

The school had an average roll of almost 360 pupils for the 2023/23 academic session, with fees ranging from around £10k for juniors to more than £32k for full-boarding students.

The accounts said: "Lomond has only a small pool of alumni and the school has not received significant financial support from them.

"This is something the school is arranging to build with an emphasis on establishing an alumni database and encouraging donations."

READ MORE: Helensburgh school in fund-raising appeal to parents amid claims of deficit concerns

Nearly two-thirds of Lomond School's expenditure for the last accounting period went on staff salaries.

The school spent more than £3m on salaries and benefits for 96 staff members - five of whom earned more than £60,000 - in the year ending July 31, 2023.

The latest accounts also reveal that the school’s head teacher, Claire Chisholm, was appointed as a trustee on June 13 this year, and retired just three weeks later, on July 1.

According to Companies House, the school's annual accounts have been filed later and later over the last few years.

Those for the year ending July 31, 2022 were filed on April 20, 2023, while those for 2020-21 were filed in November 2022, 16 months after the end of that accounting period.

The Advertiser put a series of questions to the school, including requests for more details about the new plan and reassurance over the future of the school, however, in a short response they said the financial data is now 'historical'.

A spokesperson said: “Every independent school in the UK has faced economic challenges over the last five years.

"The charity’s accounts for the year to July 2023 have now been published and reflect the significant impact of increased running costs during that period.

"This data is now historical and in line with our expectations and we are looking forward to continuing to make positive progress with our strategic business plan in the months ahead."

The school's head teacher told the Advertiser in August that she was “delighted” with the response from parents to a fund-raising appeal - after a source claimed the school needed funds to prevent “immediate closure”.

Across the Clyde, Cedars School in Greenock announced earlier this summer that it would be shutting permanently at the end of September.

The recent Companies House report added: "Lomond School again recorded a deficit for the financial year.

"This has been as a result of substantial increases in teaching salaries and pension costs in recent years, negotiated by the government, as well as the significant inflationary impact on running costs post-pandemic.

"Utility costs remain high and with the costs of operating the school, staff pay and pensions along with the loss of discretionary rate relief, it is not expected that the school will generate a surplus in the 2024 financial year."

Maurice Corry (Image: Argyll and Bute Council)

Local councillor and Helensburgh resident Maurice Corry (Conservative, Lomond North) told the Advertiser: “I wish them every success in proceeding with their strategic business plan in the months ahead.

“It is very difficult for independent schools now with the threat of the VAT status being changed but I sincerely hope that they are successful.

“We need this school in the area, particularly with our Naval families moving through, the Marine families as well, and their parents being on postings away, and it's important that we have the boarding element.

“The closure of schools such as Lomond would put huge pressure on our local state schools, which are already bursting at the seams due to years of SNP cuts.

“And as a former member of the old schools of Larchfield and St Brides Kindergarten and Larchfield Prep School, I am obviously very interested to see that Lomond School gets through these tropic waters and I am sure it will.”