FEATURE FOCUS: FINANCE challenges which may arise.
Anyone who works in education will know that this is a sector that is always evolving, be it due to the economic climate, policy changes, technological developments - and even major crisis events such as the COVID-19 pandemic. Effective budget management gives schools improved flexibility to adapt to changes by reallocating funds when and where they are needed.
A solid, strategic budget planning process allows for long-term planning while also giving schools scope to deal with challenges effectively - and ultimately makes for a more stable, sustainable, and resilient environment for pupils and staff alike. The result? Schools are far better able to achieve high educational standards. When budgets are managed effectively, schools can invest in training, resources, and technology. This directly impacts student outcomes, teacher performance, and school reputation overall. On the flip side, poor budgeting processes can lead to schools needing to make cuts in essential areas, be that staffing or staff pay, resources, or support services. Again, it goes without saying that this has the potential to directly impact educational standards - and not for the better. Financial instability can contribute to higher staff turnover rates, disrupting the learning environment for pupils and also leading to consequent recruitment and training costs. This is just one example of how ineffective budget management can push schools into a kind of crisis mode, wherein they become reactive rather than proactive. This only serves to detract from what should always be the priority: providing quality education. In turn, schools risk reputational damage and reduced access to future funding opportunities, given that many funding bodies require evidence of good budget management. Financially struggling schools will have more difficulty attracting pupils and good educators alike, perpetuating a cycle of decline.
Budget management: where to begin
The case for effective budget management is clear. So what can schools do to put robust budget management processes into practice? Here are 10 crucial points for schools to keep in mind when it comes to financial planning and budget management: Bear the bottom line in mind - This might seem obvious, but it’s the most basic rule of budget planning: schools must make sure that the money coming in is greater than or equal to the money going out, at least in the long-term.
Be specific - Schools should be setting out exactly what they want to achieve, and setting specific goals along the way. Any School Development Plan needs to support a school’s budget - and vice versa - and school leaders should make regular check-ins to ensure decisions being made are in line with the school’s wider strategic vision.
Context is key - An effective budget can’t be created without context. There are certain questions schools need to ask first. For instance, how many pupils and staff is the school going to have next year? What was the previous year’s budget? In what ways might the national schools’ budget change? Pay attention to policy - Following on from the above point, it pays for schools to stay aware of what’s going on in the way of policy and policy debates. After all, budget plans have to work within national requirements. School leaders and decision-makers should therefore be keeping abreast of the latest spending reviews and ensuring they have a sense of policy announcements before they happen. Financial tools - Financial management software can streamline budgeting processes, enhance reporting capabilities, and provide real-time data analysis. These tools enable school leaders to monitor expenditures, forecast future needs, and make informed decisions based on accurate financial information.
Review staffing structure - For any school, staff are the most valuable but also the most costly resource, accounting for between 70% and 85% of overall expenditure. Schools need to place emphasis on effective deployment to share workloads evenly.
Don’t forget allowances for staffing - When it comes to staffing, schools must also ensure their budgets include allowances for the following: additional costs year-on-year (superannuation and NI); inflation; starters/ leavers and changes of contracts; pay awards and promotions; overtime and training costs; maternity, paternity and sickness pay. Negotiate with suppliers - From basic teaching materials to the latest technologies, from classroom furniture to catering - it all adds up. Schools should not hesitate to negotiate with their suppliers, and it is worth shopping around and speaking with multiple suppliers before discussing prices. Get creative - There are always creative ways that schools can cut costs without compromising on delivering quality education. For instance, is there the potential to generate income from lettings, by leasing the school hall, sports hall or football pitch to a local club? Could solar panels help to reduce energy bills? It’s worth bearing in mind that schools can claim government incentives for generating renewable energy. Collaboration and community - Engaging with parents, local businesses, and community organisations can create additional avenues for funding and support. Collaborative budgeting processes that involve various stakeholders can lead to more comprehensive and effective financial strategies. When it comes to budget management, schools really do get out what they put in. Strategic vision, careful planning and creative thinking can go a long way towards ensuring a school has a budget management process in place which affords long-term stability, success, and high educational standards.
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www.education-today.co.uk
November 2024
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