Val Andrew outlines some basic tenets of sound financial planning to ensure that your school or college is running at maximum efficiency.

Balanced view

The theme for this year’s ASCL Conference for Business Leaders is ‘Keeping your balance’. Education continues to experience a period of serious financial challenge. The cumulative effort of additional employer pension contributions, higher NI contributions and ongoing unfunded pay increases against a backdrop of ‘flat cash’ is making balance even more difficult to achieve in budgetary terms. With a projected increase in pupil numbers of about 7 per cent across the phases by 2020, pressure on education budgets in both revenue and capital terms will continue to mount.

By the time you read this, we should know the outcome of the general election but it is unlikely that there will be any news yet about the prospect of implementing a fairer funding formula. The presumption is that, at best, this may feature as part of the next Comprehensive Spending Review.

There was consistency in ASCL messaging to all politicians attending the ASCL Annual Conference in March that a national funding formula needs to be a priority for the new government in order to eradicate the financial disadvantage still evident throughout the system. The challenges facing the new government are clearly laid out in a recent report on schools spending by the Institute for Fiscal Studies (IFS). See www.ifs.org.uk/publications/7669

For now, we play a waiting game, but in the meantime we have invited senior officials from the Department for Education (DfE) to speak at our June conference.

There are some generic and familiar steps to take as part of your ongoing review to ensure that all possible areas for achieving greater efficiency and sustainability have been explored and pursued. They include:

• ensuring that all plans for school development and/or improvement are accurately costed with all financial implications understood
• ensuring that all the school workforce is used to maximum effect
• scrutinising expenditure to be sure that all purchasing/ commissioning represents the best value available
• investigating all possible options for collaboration
• using the data about school spending to benchmark and support decisionmaking on expenditure

As the number of collaborative structures now forming part of the educational landscape increases, so will the pressure for those groups and federations to start delivering some real economies of scale.

Notwithstanding the obvious benefits of sharing good practice and the opportunities for very good schools to support their neighbours in raising student attainment, there will be the need to streamline provision and this will inevitably lead to the rationalisation of systems, processes and, in some cases, staffing. Conversely, there should be opportunities for significant savings when negotiating contracts for supplies and services.

Another avenue to explore is the generation of additional income to restore ‘balance’ on the fiscal front. Serious income generation of a philanthropic nature is required.

A recent report featured by the BBC, referring to a study conducted by charity the Varkey Foundation, highlighted the need for big businesses to spend more on education in order to fulfil their corporate social responsibility (CSR) activities. The Fortune Global 500 companies only spent 13 per cent of their total CSR budgets on education from 2011 to 2013. The Varkey Foundation is campaigning for companies to prioritise education as part of CSR commitments in the future.

Workshops at the ASCL Conference for Business Leaders will provide additional information and guidance on how to implement a policy for income generation to support stretched budgets. There will also be sessions on how to achieve economies of scale within multi-academy trusts (MATs) and how to manage through a period of a deficit budget.

For more information about the conference, to see the whole range of topics covered this year or to book your place go to www.ascl.org.uk/BLConference

Additional support on achieving greater efficiencies is available via the gov.uk website, which now features an efficiency toolkit comprising a series of short video clips about benchmarking, strategic financial planning, workforce planning and effective procurement. The link to access this is http://tinyurl.com/ogyjy4l

ASCL has published guidance on good practice in financial management (see www.ascl.org.uk/goodfinance). This guidance is being reviewed with an updated version due to be published in September.

In collaboration with the DfE, we are working on a new guidance paper that summarises the key principles of effective procurement, including the recent changes to EU directives, where to access further information about available purchasing frameworks and other supporting documents on effective procurement practices.

Finally, don’t forget the ASCL Strategic Finance DVD, which is another useful tool to use with the leadership team, governors and any staff with a financial responsibility. For more information, see www.ascl.org.uk/stratdvd

There are other interpretations of ‘Keeping your balance’ on offer at the conference, including a session on how to achieve the right work/ life balance, and the business management survival guide.

Taking collective responsibility for the budget requires trust, effective teamwork, good communication and shared accountability – no pressure!

Val Andrew is ASCL Specialist Business Leadership

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