FEATURE FOCUS: FINANCE
When money is tight it’s hard to know where best to save the pennies with minimum impact – it’s the same quandary faced by businesses, many of whom choose to cut back on areas like marketing. In schools this can often mean teaching assistants, special educational provisions, and IT infrastructure gets cut, even though such decisions will undoubtedly impact the overall success of the school and leave students at a disadvantage.
That said there are simple steps that schools, academies and colleges can be taking now, that will help them to weather the storm of the challenging times ahead.
Forecast for the future
Educational establishments are not the only businesses that too readily rely on historical information, when this doesn’t fully help with understanding financial trajectory. Instead, focusing on the future is crucial for surviving turbulent times, albeit with caution and flexibility. Schools often have three to five-year plans in place and it can be challenging to keep these in sight amid such uncertainty, especially when it’s yet to be determined how much non-educational staff are going to be paid. It’s good to plan for the worst-case scenario so you can adapt your approach should the market go against you but, when setting budgets and making decisions, a more pragmatic approach to forecasting is also advisable to avoid making overzealous cuts based on a pessimistic forecast. This is where modelling of different scenarios can come in use.
Lean on free initiatives
The government has implemented a number of free resources for schools, such as the school resource management advisers (SRMA) programme. SRMAs are accredited sector specialists whose expertise schools can lean on to learn how they can better use revenue. The advisors will work with schools to understand areas of weakness and identify where savings can be made in their budgets, so that resources are being used to deliver the best
possible educational outcomes for pupils. This is a free service that’s available to all schools to help them make better use of their funding, so well worth exploring if budgets are tight. Schools can also make use of integrated curriculum and financial planning (ICFP), a strategy offered by the Department for Education that helps schools plan the best curriculum for their students based on the funding available. It involves assessing your current curriculum, and how this fits with current staffing structure and finances, and harnessing data to create a strategy for the coming years.
Benchmark your school’s financial data With data becoming increasingly important to the operation of all businesses, schools should be no different in their approach to collecting it and using it to analyse their performance in a range of metrics. From pupil attendance and attainment, to staff wellbeing and the impact of the school on the wider community, there is much that data can tell us, if we know how to use it effectively,
and much that we can glean from it in how to manage budgets according to specific trends and fluctuations in the market.
Trust your reserves
For academies, reserves represent an extra layer of security and resilience to financial risk. All academies must have a reserves policy, a statement which outlines the level of funds (called ‘free reserves’) which the school has available to freely spend on any of its activities or overheads. When faced with uncertainty such as we now are, Trusts may wish to revisit their reserves policy and can enlist the help of financial professionals (such as auditors) to do so.
Free reserves are an invaluable tool in helping academies to manage emergencies or other unforeseen circumstances, such as unexpected costs. They can also be useful for alleviating situations like short-term deficits in budgets, helping to manage a restructure if grants are not renewed or are cut, or even seed funding a new project before other funds are made available.
Outsource your expertise
Reports show that one in five schools don’t feel qualified to take responsibility for their own finances because they don’t have the in- house expertise. Many smaller Trusts won’t have a qualified accountant, and therefore this responsibility can often fall to those who are unqualified. In such situations, it’s important to have some form of additional professional support such as an accountancy firm with a specialism in the education sector.
Look after your staff and your staff will look after you
Schools would also be well advised to examine their wellbeing strategies, since supply staff can be expensive and this can really tip a school’s financial performance in the year. Schools can be too reactive in terms of HR issues, however creating a proactive strategy around people wellbeing and retention could prevent problems before they occur.
Being equipped with options to tackle the next few years is essential. To understand the best route for you, contact me directly for help and guidance:
ujames.gare@
monahans.co.uk.
November 2023
www.education-today.co.uk 31
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