Finance – making the best of your resources budget planning, benchmarking, collaboration & seeking best value Welcome

Aims To consider how governing boards strategic and budget plan, to ensure the best use of school resources . To look at the DfE tools available to help governing boards benchmark their school, and to achieve best value and efficiency. To discuss how schools may collaborate with each other to share best practice and (possibly) resources.

A core governance responsibility is… To oversee the financial performance of the school and make sure it is money well spent.

What does this mean? Schools must be able to evidence – to their stakeholders and to the regulators - that they are spending their funds to achieve the best possible outcomes for the children, and that they are achieving value for money. Every school has a delegated budget, to cover staff costs, running costs, maintenance and equipment. The governing board is responsible for this budget.

The budget - channels of income The School’s Budget Share (Dedicated Schools’ Grant) Allocated by the local authority - for pupils aged 3-16. Separate funding formula for 6th Form (16-19) funding Other grants Given by the government to support specific initiatives and strategies (e.g. Pupil Premium Grant) Other income Generated / sourced by the school: eg hall hire, parental voluntary contributions, donations from charities, grants for specific projects, PTA fundraising

Budget Planning The governing board is responsible for producing and ratifying the annual budget plan (Academies: see your scheme of delegation: trust board <-> LGB) The budget plan must have a clear link to the key educational priorities of the school (eg staffing and continuous professional development; cost of strategies / interventions) What else should governors consider during budget planning?

Budget Planning considerations Appraising different expenditure options Taking account of findings from benchmarking Efficiency considerations. Obtaining best value (eg for large purchases, external contracts and service agreements) Future staffing – upcoming changes and needs Planning for sustainability (3 year plan) .

Budget Planning considerations Are resources (including staffing) being allocated in line with current key priorities? Does the budget plan identify spending / saving opportunities… and risks? Does the school have sufficient reserves to cover any major changes (eg restructuring) and have any risks been identified? How can better value for money be achieved from the budget? .

The Review of Efficiency in the Schools System (June 2013): key findings The most efficient schools: Deploy the workforce effectively, with a focus on developing high quality teachers Make use of evidence to determine the right mix of teaching and education support staff Employ or have access to financial expertise…

In-school financial expertise Schools need access to staff with a high level of financial management competency because of the complexity of financial management issues in schools. As governors/trustees are responsible for the effective use of funding delegated to the school, it is vitally important that they are confident that the school has access to appropriate financial expertise.

The Review of Efficiency in the Schools System (June 2013): key findings continued The most efficient schools: Make good use of financial benchmarking information to inform the school’s spending decisions Make use of school clusters, sharing expertise, experience and data, as well as accessing economies of scale when making shared purchases Have in place a strong governing body and leadership team that challenges the school’s spending

Financial benchmarking How does your spending on teaching staff compare to similar schools? How does your spending on other staff compare to similar schools? How does your spending on goods and services compare to similar schools?

Schools financial benchmarking service https://www.gov.uk/guidance/schools-financial-efficiency-financial-benchmarking

Schools financial benchmarking service Benchmarking doesn’t answer questions – it raises areas for exploration. https://www.gov.uk/guidance/schools-financial-efficiency-financial-benchmarking

Managing our school’s financial health How do we know whether our school/trust is financially healthy? What materials and tools are available to help? School Resource Management – DfE’s online toolkit https://www.gov.uk/government/collections/schools-financial-health-and-efficiency

School resource management toolkit Produced by DfE and Education and Skills Funding Agency and contains: Buying for schools guide, and case studies Get started with school resource management checklist Review and benchmark your finances Plan your workforce and curriculum Guidance for governors: what checks to make Get financial advice for your school School resource management training & peer support

Top 10 planning checks for governors Part of the School Resource Management toolkit. Use as a starting point for discussion with the SLT / governing board. https://www.gov.uk/guidance/school-resource-management-top-10-planning-checks-for-governors

Top 10 planning checks for governors

Points 1-5: Staffing matters This is where most of your budget is spent. Are you spending enough? Are you spending wisely? Are your staffing arrangements set up to make the best possible positive difference in the key priority areas?

Staffing – key data Governors should be able to scrutinise data on: How much their school is spending on teachers and on support staff The ratio of teachers to support staff Pupil-teacher ratios (PTRs)

Staffing – strategic planning Use the Top 10 Planning Checks for Governors to prompt SLT/governing board discussion. Review the staffing structure regularly – have we got the right balance? How well does our structure match with what’s needed to deliver our curriculum and to address our school’s key priority improvement areas? Ensure that decisions are informed by the evidence, as collated by the Education Endowment Foundation (eg EEF Teaching & Learning Toolkit)

Staffing – strategic planning Reviewing our appointments process – do we have a good track record of making the right appointments? Reviewing our use of the Teachers’ Pay Reform – does our pay policy support our strategic aims?

Point 7: 3-5 year budget projections Same process as setting a one year budget plan Should start from a blank page Consider school improvement priorities Estimate pupil numbers Consider curriculum needs Consider premises needs Will any capital programmes affect the budget? How will external factors impact our income or costs?

Setting the 3 year budget plan: Likely staff costs Pupil numbers Budget changes Long term commitments Continuous review 3 year plan and school priorities

Point 8: Procurement and contracts Does our school have effective procurement processes? Does our school make use of available procurement services? Can we increase the procurement knowledge within the school? Does our school benefit from economies of scale?

School and trust collaborations Table discussion: What opportunities are there for your school to engage in joint procurement activities with other schools? What are the challenges to joint procurement activities with other schools? Does your school share staff/expertise/training with other schools? Has your governing body discussed collaborative working? – What could this look like?

Reviewing efficiency Three key questions: Foundations – does the school have access to appropriate business management skills? Practice – are effective processes, procedures and practices in place to promote efficiency? Culture – is there an efficiency culture which permeates the whole school community?

Creating an efficiency culture Make the link between spending decisions and pupil outcomes…. better spending decisions can help to raise attainment Establish efficiency as a norm…….once we become aware that other organisations are more efficient we tend to change our behaviours Require the use of information…..and ensure that your school uses all of the information available to it Challenge inefficiency…..this may be time-consuming and involve risks but will often bring long term gains

Schools financial efficiency metric tool https://www.gov.uk/government/publications/schools-financial-efficiency-metric-tool

Schools financial efficiency metric tool Lists schools with similar SEN and FSM as your efficiency neighbours Efficiency decile 1 = most efficient decile 10 = least efficient

What could be our next steps? Conduct an internal review – using the Top 10 planning checks for governors, financial benchmarking and the efficiency metric. Investigate what other schools are doing Support your school to resolve those issues which are proving a barrier to becoming more financially healthy and efficient.

??? Any questions? Clive.Haines@achievingforchildren.org.uk Rebecca.Walker@achievingforchildren.org.uk