So far, the crumbling schools crisis has had limited read-across for UK-listed businesses. Unlike the 2017 Grenfell fire – which led to billions of pounds in redress and remediation costs for housebuilders and an ongoing fight over liabilities with cladding manufacturers – the hundreds of structures made with reinforced autoclaved aerated concrete (RAAC) is a largely political scandal.
That may change. But beyond the hunt for accountability, the episode should be a reminder of some big lessons for investors in companies. Although organisational goals differ – schools exist to educate, businesses to make profits – there are close parallels between both.
The first is that when cash is too tight, all priorities defer to survival. For businesses, building long-term resilience is only possible when there is surplus capital or positive cash flow.