The exciting news of a shift by Ofsted from using one-word ratings to a more detailed scorecard system has been met with positivity from the sector overall. There has been much conversation as to how it will allow parents to have greater transparency and granularity in assessing the quality of the setting they choose.
With the introduction of the scorecard system, settings will now be assessed across multiple criteria, such as the quality of teaching, learning outcomes, safety, and leadership. The change will allow investors and potential buyers to have access to detailed data, enabling them to make more informed decisions and be confident in their purchases.
Any seller who has found themselves on the receiving end of an inspection during marketing or a sale transaction will know the impact that a possible change of rating could have on their valuation, and level of buyer engagement.
Any buyer who has ever tried to finance a purchase of a Requires Improvement setting will know that lenders do not consider that this could be an easy step back up to Good.
The vast leap between ratings, along with the long periods between a reinspection, can make or break a sale with no allowance for the often small changes that could be the difference between ratings. It is partly for this reason that many sellers I speak to actively avoid achieving an Outstanding as it is gained with the knowledge it will likely be lost again and that there is no recognition that Good is outstanding in its own right!
The scorecard will allow for buyers and lenders to understand the uniqueness of the target settings, what is being done well and what needs to be addressed by a new owner, making for a much easier transition into ownership. It will also allow them to look at any risks presented by those weaker areas. Ultimately, this should make things a bit easier for buyers and sellers alike.
