Research from Ezra, the leading provider of digital coaching, reveals that the UK education sector saw annual revenues reduce by more than 12.5% during the pandemic, while the profit margins of online education soared by 16%.
The global COVID-19 pandemic forced the UK’s education sector to shut down. If classes couldn’t be taught remotely, they couldn’t be taught at all, and for the best part of two years, schools, universities, and colleges have been left empty.
These closures marked the end of a period of strong, reliable revenue growth for the industry. In 2015, UK education generated £29.1 billion revenue, climbing by 19.2% in 2016 to a total of £34.7 billion. This number continued to grow steadily for the next three years before reaching an all time high of £38.3 billion in 2019.
In 2020, the first signs of decline started to show with industry revenue declining by -1.3%. In 2021, the annual revenue is expected to decline by 11.4%, leading to a total pandemic decline of more than 12.5%.
The recent reduction in revenue has had a significant impact on the profit margins of the UK’s various education subsectors. Universities are now working with an estimated profit margin of just 0.8%, while secondary education’s profit margin is 1.2%. Pre-primary education and technical and vocational education both have a profit margin of 1.3% while primary education’s profit margin is 3.1%.
All of this pales in comparison to online education and training which currently has an estimated profit margin of 16.2%, after becoming the only education sub-sector able to operate with its original business model in place during the time of pandemic.
Founder of Ezra, Nick Goldberg, commented:
“Education has been one of the biggest victims of the COVID-19 pandemic. Schools and universities have had to shut their doors and switch, where possible, to remote learning. For universities in particular, this has severely damaged income.
However, online education is thriving. As the only viable form of education for the past couple of years, more students than ever have been exposed to this very 21st Century way of learning. In doing so, they have realised how accessible, successful, and enjoyable remote learning can be. It is no longer a necessary compromise, it’s a genuinely powerful and accessible form of education that people of all ages can embrace.
We’ve already seen how remote access to training can better the workplace and it looks as though this method of educating students will remain long beyond the restrictions of COVID-19, as the sector continues to adapt to the changing face of the world and the additional benefits technology can bring.”