There have recently been news reports of schools moving to a shorter week and other dire cuts because of current funding pressures. I can see the temptation of reducing the time children are in school; planning, preparation and assessment time can all be done at the same time and it would be possible also to reduce support staff hours, however this should surely be the last resort for any school leader to contemplate, even if enrichment or childcare activities offered for those who need it. The phrase School Funding Crisis has entered the vocabulary and even relatively well funded London Councils report that schools are having to make tough decisions to balance budgets.
Certainly funding is not what it was in education, and school reserves are falling at quite an alarming rate with many schools’ expenditure exceeding their in-year income and some academy trusts receiving bailouts. However, overall there are still large reserves in the school and academy sector, but there are huge variations as to where these are. The government, in its evidence to the School Teachers Review Board, believes that, with the implementation of the National Funding Formula that ‘(n)ationally and overall, costs could rise a further 2.2% and 1.4% in 2018-19 and 2019-20, respectively, before schools would face real terms pressures.
This assumes that the costs are staff-related, thereby representing a theoretical absolute upper bound to the impact on schools’ budgets above which increases in teachers’ and school support staff’s pay would lead to real terms per pupil pressures for schools. However, there are a wide range of other activities and priorities that schools could choose to spend money on. Teachers’ pay is the single largest item in a school budget and typically represents around 50% of school expenditure. Schools will need to prioritise spending on teachers’ pay against other needs, such as school improvement, teacher CPD, pastoral support and teaching resources.’ (my italics). This indicates to me that the sector should not hold its breath for increased funding in the near future at least.
I believe that School Business Leaders at school or system level, need to have the tools to analyse school budget and expenditure and provide challenge around financial efficiencies. This should now go further than savings on procurement. We should be analysing staff deployment and costs and be looking at some key ratios.
Some of the larger multi-academy trusts, such as Outwood Grange and United Learning have developed curriculum modellers and the DfE has also published a tool for workforce planning. Recently whilst studying for the ISBL/CIPFA Level 7 programme in operational leadership, I was fascinated by the module on curriculum led financial planning and it has probably transformed my practice in terms of assessing whether it is possible for a school budget to balance. If you don’t have access to a modeller,
ASCL have produced the 'the equation of life' which shows how to calculate whether a curriculum model or timetable is affordable. I have produced a checklist of key performance indicators for Trustees and Leaders into which key information can be populated for a single school or comparison schools. If certain ratios are not in line with national or local averages, and crucially, if the contact ratio is well below the aspirational target of 0.78, then it may be possible to make adjustments to balance a budget. The model can be adapted for primary schools as well as secondary schools.
Curriculum Led Financial Planning ratio Checklist
None of this is easy in the current educational climate. It is, of course, difficult to leave the emotional arguments at the door. There is a teacher recruitment crisis, particularly in certain subjects. There is a workload crisis, and larger classes or more contact time could add to this. There are school contexts – where additional support is targeted to SEND or EAL or disadvantage (with associated additional funding). There are accountability pressures for headteachers. The solution has to lie within the sector and the school business leader can contribute by knowing the detail of income and costs and by challenging assumptions about high frequency but low impact tasks.
I am more than happy to outline my concerns about school funding, in particular High Needs and Capital funding, to any government minister who wishes to listen. I am also willing to be clear about what can or cannot be expected from schools, as more aspects of social care and mental health care become increasingly hard to access. However, in my role as a multi-academy trust Chief Operating and Finance Officer, I cannot ignore the overall financial health of the Trust. Running out of reserves is not an option.
By Micon Metcalfe - March 2018