BALANCING THE BOOKS
How to make sense of schools' finance
Are you having a problem balancing the budget(s)?
Does your 5-year budget forecast give you sleepless nights?
Then it is time for a rethink and an opportunity to use some next-generation business leader ideas to ensure a brighter financial future for your school(s) and to help you sleep at night.
Let’s start a financial health check. There are a few tools that school business managers can utilise to help with this.
Starting with collating the following data and information:
- Staff pay as percentage of total expenditure
- Average teacher costs
- Pupil to teacher ratio
- Class sizes
- Teacher contact ratio
- Proportion of budget spent on the leadership team
- 3 to 5-year budget projections
- Spend per pupil for non-pay expenditure lines compared to similar schools
- School improvement plan priorities and the relative cost of options
- List of contracts with costs and renewal dates
This list is one of the pieces of guidance that the Department for Education provide to help schools in the designated 'Schools Financial Health and Efficiency' page.
Utilise the resources available which includes benchmarking, focus on areas where your school is spending at extremes of above/below average.
Partner with a setting that has a similar demographic, then contrast and compare your data, processes and procedures i.e. How do they deal with cover? What unit cost do they pay for certain items?
Review Your Staffing Structure
I would recommend that if your staffing cost as a percentage of total expenditure is 80% or above then you must look reviewing your staffing structure. It's good practice to review it annually.
Consider whether staff are deployed efficiently, focusing on roles rather than individual people, look for skills gap(s), pupil/teacher ratio, options for supply and opportunities to share specialist staff with other schools.
A useful way to understand the trend and pattern of spending is to keep a spreadsheet with key information tracked over time. I do this through using OneNote.
The key data that I record and analyse includes:
- A spreadsheet with a comparison of the budget and outturn figures going back 3 years and forecasting forward. This helps with identifying budget lines where you maybe being over-pessimistic
- Analysis of funding and the data drivers going back 3 years; include pupil numbers, number of children in care, pupil premium numbers and EAL numbers. This information is useful to understand the demographic of your organisation.
- A contract register - include the length of contract, cost and termination dates.
There are many innovative ways in which you can give your organisation an income boost, it just takes a little bit of time and effort.
Maximise your income through incentivising initiatives, a great example of this would be if the Pupil Premium Grant is an important element of your funding, offer an incentive to families for completing the forms. The incentive doesn’t have to be costly but it helps if it is desirable, something like a water bottle or a reading book.
As part of your contract and brand management, it is really important to build positive relationships with suppliers. You can use this for added value. You don’t always need to be looking for cash. Use your existing suppliers to support teaching and learning or to improve the school site. You can ask them to do an assembly; be part of a refurbishment project or social enterprise week.
I believe that it is really important to manage your school and yourself as the business manager as brands. Often the school business manager role can be an isolated one. Many school business managers are unsung heroes. It is a fantastic profession to be part of and we can support one another through the difficult financial times, through collaboration and networking.
There are lots of opportunities and there is always a way forward, it's our job to find the way. As a business manager who asks a lot of questions, never be afraid to ask for help.
By Hayley Dunn - September 2017