1. Leading efficient and effective schools 1

2. Purpose of the day To develop governors’: ability to meet their responsibilities for efficiency and value for money (Governance handbook, Section 12.1) knowledge and understanding of the materials and tools available to support schools awareness of the ‘efficiency review tool’ and how to use it in their schools 2

3. Programme Setting the scene Managing the business of schools Staffing matters Effective procurement Protecting the public purse Establishing an efficiency culture Moving to action 3

4. What do we know about our most efficient schools? DfE’s (2013) ‘Review of efficiency in the schools system 4

5. What do we understand by efficiency? ‘ There was a strong and consistent response that being efficient meant getting the most out of the money available to give children the best quality of education.’ (Review of efficiency, p34) What does this look like for you? 5

6. Similar schools…..similar spending …. different levels of attainment Schools with similar average total expenditure per pupil (range £4,000 - £4,800 per pupil) 6

7. The Review of efficiency in the schools system: 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 a skilled school business manager who takes on a leadership role  Make good use of financial benchmarking information, to inform the school’s own 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 7

8. Responsibilities for efficiency strategies? Governance Senior Educational Leaders Business Leader 8

9. Tools to help improve school financial health and efficiency How do we know how efficient our school is? What materials and tools are available to help? 9

10. Tools to help improve school financial health and efficiency. School Financial Health and Efficiency Webpages Including  Introduction to schools financial efficiency Introduction to schools financial efficiency  Business cycle and budget planning Business cycle and budget planning  Financial review and self-assessment Financial review and self-assessment  Financial management and efficient resourcing Financial management and efficient resourcing  Guidance for governors Guidance for governors  Commercial and procurement Commercial and procurement  Sharing best practice Sharing best practice  Other useful links Other useful links ReviewInvestigateResolve 10

11. How efficient is my school? Link to the metric website Link to the metric tool  The efficiency metric  Input- School revenue funding  Output- Value Added score  Comparison with similar schools  Provides a decile ranking indication of a school’s relative efficiency 11

12. Efficiency Metric (cont’d)  The efficiency metric provides a simple indication of a school’s efficiency  It should prompt conversations at and between schools about if, why and how similar schools are achieving more with the funding they receive  The metric does not provide answers in isolation  It is not an accountability measure, nor an indication of financial health. 12

13. Better benchmarking How does your spending on teachers compare with similar schools? How does your spending on goods and services compare with similar schools? 13

14. Benchmarking: how much are you spending compared with other similar schools? Data for a non-London primary (blue) with high FSM; compared with statistical neighbours. (Source DfE Benchmarking Website) https://www.education.gov.uk/sfb/login.aspxhttps://www.education.gov.uk/sfb/login.aspx http://www.education.gov.uk/afb/login.aspxhttp://www.education.gov.uk/afb/login.aspx 14

15. Benchmarking: Workshop What are the sheets telling you? 15

16. Financial Health How do we know if our school/trust is financially healthy? What materials and tools are available to help? 16

17. Governors should work with the school to set strategic financial plan, which would include a 3-5 year budget.  Same process as setting a one year budget  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 your income or costs? Setting a 3-5 year budget 17

18. Visibility Academy Income & Expenditure Budget Year 1 Pupil Numbers 1080 Teaching staff FTE 85 INCOME Funding EFA6,250,000 Other Income125,000 Total INCOME6,375,000 EXPENDITURE Staffing COSTS Teaching Staff3,840,000 Other Staff950,000 Non Pay COSTS1,365,478 Total EXPENDITURE6,155,478 Operating Surplus/(Deficit)219,522 Cumulative Retained Earnings319,522 Year 3 1060 83 6,130,000 135,000 6,265,000 4,020,000 1,050,000 1,500,000 6,570,000 -305,000 -50,716 Year 4Year 5 1060 83 6,200,000 135,000 6,335,000 4,050,0004,060,000 1,065,0001,075,000 1,400,0001,430,000 6,515,0006,565,000 -180,000-230,000 -230,716-460,716 Year 2 1057 83 6,120,000 126,000 6,246,000 3,905,000 1,042,000 1,364,238 6,311,238 -65,238 254,284 18

19.  Visit the Schools financial health and efficiency web page  Watch the videos  Use the top 10 planning checks for governors  Use the benchmarking tool  Use the metric tool Setting a 3-5 year budget – tools and support 19

20.  Not just for governors  Use early in budget planning cycle  Is the curriculum efficient?  Leadership team  Scenario planning  Impact of current decisions https://www.gov.uk/guidance/schools- financial-efficiency-top-10-planning- checks-for-governors Setting a 3-5 year budget – Top 10 planning checks for governors 20

21. Dealing with Unknowns Cost Assumptions Unknowns Costings Assumptions Finances Budgets MonitorUpdate Best Knowns and school improvement plan 21

22. Solid foundations How are you managing the business of your school? Do you have access to appropriate specialist expertise? 22

23. Financial Expertise It is essential that a school has an adequate level of financial expertise. Schools need access to staff with a high level of financial management competencies because of the complexity of financial management issues in schools. As Governors and 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. 23

24. Benefits of employing an SBM  Reduction in SLT workload – focus more time on teaching and learning  Financial gains (PwC study: over 7 year period SBMs generated £306m in savings or income) –Implementing more efficient staffing structures and increasing the use of shared staffing; –Better management and negotiation of contracts; –Taking advantage of bulk purchasing opportunities; and –Improved project management, particularly important in reducing capital costs 24

25. What does your SBM do? FinanceHR Manage office Facilities Manage Contracts Grounds Health and safety InsurancesSustainability Energy use ICT Manage data Community links Report to Governors Member of SLT 25

26. Table discussion –Who is responsible for the business functions of your school? –Does your school employ an SBM? –How are they deployed? Is there scope for enhancing their role? –Could you help other schools in your area? –What are the challenges to appointing an SBM? –How might you overcome them? –What enablers are in place to help you? Leading business in schools 26

27. NASBM Professional Standards for School Business Managers. In November 2015 the National Association for School Business Management launched professional standards for SBMs These are a suite of standards for school business management professionals, comparable to those already available for other staff in schools. They take a tiered approach to many of the roles and responsibilities that SBMs undertake and set out the standards that should be expected at each tier. They can be used by head teachers and governors to develop job descriptions and to ensure that schools have the right level of commercial skills and experience. http://nasbm.co.uk/Career-Development/NASBM-Professional-Standards.aspx 27

28. Staffing matters This is where most of your budget is spent. Are you spending enough? Are you spending wisely? 28

29. Why staffing matters  Schools spend the majority of their budgets on staff – and over half of this is spent on teachers.  School leaders and governors need to carefully consider how they can use their staff most effectively, and whether they’ve got the right mix of staff.  It’s critical to get this right; high quality teaching is the most important school-based factor in raising standards: ‘According to research that measured teaching effectiveness across England, having a good teacher rather than an average teacher for two years is estimated to be worth three grades for pupils taking 9 GCSEs.’ (DfE Review of Efficiency, 2013, p9) 29

30. Getting the right mix of staff  There is no single ‘right answer’: the staffing structure that is best for a school will depend on its particular circumstances.  Nevertheless, it is important to compare your own schools’ staff spending and staffing structures with those of similar schools – this should inform discussions on whether you’re using staff as effectively as possible.  School leaders and governors should take a strategic approach to decisions on staffing structures, which starts from looking at the staff resource needed to deliver the school’s priorities.  This will involve planning ahead to ensure that you’ve got the right workforce to deliver the curriculum effectively now, and in future – not just rolling forward a staffing structure from one year to the next. 30

31. Staffing – key data to look for Governors should be able to scrutinise data on:  How much your school is spending on teachers and on support staff  The ratio of teachers to support staff  Pupil-teacher ratios (PTRs) This data is included on the DfE’s benchmarking website which will allow you to compare your school against other similar schools. Governors have access to this data. In addition, your school should be able to provide you with the following data:  Class sizes  ‘Contact-time’/ ‘teacher utilisation ratio’: this is the amount of their working time that a teacher spends teaching in the classroom  The proportion of teachers who progress to a higher salary each year, as a result of performance related pay. 31

32. Staffing: looking at the evidence The Education Endowment Foundation (EFF) has collated and summarised evidence on the links between staffing and educational standards: Support staff:  The number of teaching assistants has grown rapidly over the past decade. 147,000 TAs worked in state-funded schools in 2005, which grew to 255,000 in 2014 (School Workforce Census 2014) – with a current cost of around £4.4bn.  TA numbers have grown far faster than pupil numbers and teaching numbers.  However, the EEF reports that teaching assistants are often deployed in ineffective ways: “The typical deployment and use of TAs, under everyday conditions, is not leading to improvements in academic outcomes” (Making Best Use Of Teaching Assistants, 2015) Teachers:  The average pupil-teacher ratio (PTR) is currently fairly low compared to historical levels. In 2000 the average PTR was 20 – now, it is just under 18.  However, a low PTR, and low class sizes, are not always the most effective way to raise standards. The EEF has concluded that reducing class size is “low impact for very high cost”: “The evidence does not show particularly large or clear effects, until class size is reduced to under 20 or even below 15.” (EEF Toolkit) 32

33. The EEF’s advice on effective use of teaching assistants  TAs should not be used as an informal teaching resource for low attaining pupils  Use TAs to add value to what teachers do, not replace them  Use TAs to help pupils develop independent learning skills and manage their own learning  Ensure TAs are fully prepared for their role in the classroom  Use TAs to deliver high quality one-to-one and small group support using structured interventions  Adopt evidence-based interventions to support TAs in their small group and one-to-one instruction  Ensure explicit connections are made between learning from everyday classroom teaching and structured interventions 33

34. Schools’ flexibilities over teachers’ pay  Having the right pay structure is an important part of ensuring that you’re getting the most of our spending on staff.  Reforms in 2013 gave school leaders much greater flexibility over teachers’ pay – both in terms of setting starting salaries, and annual pay increments.  These reforms give SLTs the freedom to set pay policies that are right for their own individual circumstances.  Key considerations for governors: –Does your school’s pay policy enable you to genuinely differentiate and reward good performance – rather than awarding progression increments de facto automatically? –Look carefully at the distribution of your staff across pay grades – given this, are the potential outcomes of the pay policy affordable in the short and medium term? Is there sufficient provision in the budget for pay progression? –Are you making use of the new flexibilities when setting salaries for vacancies? 34

35. Staffing –things governing bodies and the senior leadership can do  Use the DfE Top 10 Planning Checks for Governors to prompt SLT discussions on the scope for efficiencies – this includes a number of suggested questions for governors to ask on staff spending.  Review their staffing structure regularly – have you got the right balance between teachers and other staff? How well do your structures match what is needed to deliver your curriculum?  Ensure that these decisions are informed by the evidence – as collated by the EEF  Review their appointments process – have you a good track record of making the right appointments?  Review their use of the Teachers’ Pay Reform – does your pay policy support your strategic aims?  Use the Efficiency Review Tool to develop strategies to achieve efficiencies. 35

36. Better buying Does your school have effective procurement processes? Does your school use the procurement services available? Does your school benefit from economies of scale? Can you increase public procurement knowledge within your school? 36

37. Procurement of goods and services Benefits of effective procurement practices:  financial savings that can then be re-invested in your priorities for driving up standards  goods or services purchased are fit for purpose  suppliers deliver (and continue to deliver) as agreed  legal and financial obligations are complied with. 37

38. Why don’t these schools collaborate? ‘If each of these schools spent 5 mins a week with half of these suppliers it would add up to 961 hours of duplicative time a year, not to mention the missed savings opportunities from shared procurement’ (p 19) 23 schools within a 15 mile radius Total non-pay spend £5m per annum 1828 different suppliers were used 1524 different suppliers were used for a transaction value of under £500 The schools in the survey were using the same suppliers but on varying terms and conditions and paying different amounts 38

39. Collaborating with other schools Table discussion:  D oes your school engage in joint procurement activities with other schools?  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 conclusions did it come to? 39

40. Public procurement information https://www.gov.uk/government/collections/buying-for-schools https://www.gov.uk/government/publications/procurement-training-for- schools https://www.gov.uk/government/publications/cloud-software-services-and- the-data-protection-acthttps://www.gov.uk/government/publications/cloud-software-services-and- the-data-protection-act. Question: Does your school regularly use the advice and resources available? 40

41. Protecting the public purse Does your school have robust systems and processes for the safeguarding and proper use of public funds? How does your spending on goods and services compare with similar schools? 41

42. Safeguards against fraud and theft ‘In the most efficient schools…..their focus on efficiency also creates more robust management systems that reduce the risk of financial irregularities’ (DfE, 2013, p6) In 2012/13 councils reported 191 cases of fraud in schools, worth £2.3 million. Of these cases, 86 with a value of £1.9 million involved internal fraud. The results suggest that schools may not have the same level of supervisory checks and controls as large organisations…and may therefore face a greater risk of internal fraud. (‘Protecting the public purse’, 2013, p33) 42

43. Group working: Discussion: What safeguards are in place in your school? What discussions have taken place within the governing body during the last year Probity – do governors know what funds may and may not be spent on? See section 7.2.3 of the Governors Financial Handbook and use this as a basis for discussion. 43

44. Good practice in fraud prevention Features of good control systems are:  financial management checks  separation of duties  strictly limited access to systems  spot checks on systems and transactions  investigation of every incident of irregularity  careful pre-employment checks  staff responsibilities made clear  effective whistle-blowing policies 44

45. Whistle-blowing Good practice  The school must have a whistle-blowing policy in place – maintained schools will base this on their LA’s policy.  Staff must have someone trustworthy to report their concerns to.  All staff must be aware of the whistle-blowing policy.  Academy trusts should have whistle-blowing arrangements 45

46. Summary 46

47. What can governors do to create an ‘efficiency culture’?  Make the link between spending decisions and pupil outcomes…. better spending decisions can help to raise attainment  Ensure your school has access to effective financial management skills  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…..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 47

48. Reviewing efficiency in your school 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? Finding the answers:  Conduct an internal review – use the Efficiency Review Tool and the top 10 planning checklist for governors  Investigate what other schools are doing  Support the school to resolve any issues which are a barrier to your schools becoming more financially healthy and efficient. ReviewInvestigateResolve 48