I find school finance boring.
There, I said it. I may be a headteacher, but I was once only a teacher, which means I’m interested in children and learning, not budgets and spreadsheets. That said, as a teacher I still remember the giddy excitement as the Consortium catalogue (other educational stockists are available) was passed around the staff room prior to ordering stock for the new term. Then, as now, Pritt Sticks were hard currency.
As a headteacher, I still see the school budget in much the same way – as a means of delivering excellent teaching and learning. Manage it well and there are lots of resources to improve children’s learning. Manage it badly and your school can be crippled, unable to provide the people, places and resources the children need. With budgets being squeezed relentlessly by government cuts (and they are cuts) it’s now even more important that we headteachers make every pound count. So here are my five top tips for strategic financial planning…
1. Your budget follows your SDP…
… and not the other way around. In the past, like many headteachers, I’d get my budget figures for the coming financial year around February and write the budget with my school business leader in March, putting dollops of money into vague cost codes: “I suppose we might want to buy some new resources next year – stick £3,000 in the ‘educational resources’ budget,” would be the level of strategy used to make those decisions.
Historically, September would roll round and I’d decide that the new school development plan demanded £5,000 of maths resources. Having not allocated any money to this when the budget was written, the SBL would then be left scrabbling around to find the cash by via-ing amounts from one code to another.
But around five years ago we switched to starting from the point of what we wanted to achieve educationally – before we’d even seen the budget figures – and write the new budget around that. This was transformational, as we now actually had the cash for the things we wanted to do.
2. Start planning in February
The first step of our strategic financial planning process begins in February when our SLT – of which my SBL is a full member – looks at our four-year strategic plan, and at what we’ve planned to achieve in the school year from that September. Having all the leaders do this together ensures that nothing is missed, while our SBL’s brief is to always challenge the cost/ benefit of any planned initiative that requires funding. It’s fine for something to be high cost, so long as it’s also high impact. Our SBL reminds us of this perpetually, so that every taxpayer’s pound is made to work hard.
We list all the things in the strategic plan we’re aiming to do in the coming academic year, and then consider the approximate cost for each element. It’s quite a rough and ready process, since we don’t know the exact costs at this point. You’ll also no doubt have something pop up later in the year requiring attention (often after the end of year assessments show that something needs improving) which you won’t yet know about, so we put money aside in a ‘standards’ budget to cover this eventuality. When creating this plan, we try to decide what’s essential and what’s desirable, creating a wishlist of additional spending if money allows.
3. Let your SBL build around the plan
Once my SBL knows what the school wants to achieve, she transfers this information onto a more complex spreadsheet that adds in the specific budget cost codes, so that money can be allocated.
4. Staffing is a long-term consideration
Staffing will account for 70-80% of your budget (though if it starts getting above 85%, you’re in trouble), so if belts need tightening, this is the only place where big reductions can be made. However, taking a longer-term view on this can reduce the need for painful and disruptive staffing cuts that can damage morale and educational outcomes.
When creating our strategic financial plan in February, we’ll look at the forecasted staffing costs for the next three years and at whether our staffing is sustainable. This has radically changed our thinking from ‘hoping for the best’ to making realistic, if unpalatable decisions.
For example, we calculated that if we continued spending as we were, the school would be in financial trouble by year 3, prompting us to look at how our staff were organised and deployed. This led to us consciously deciding that any teacher vacancies would have to be filled by NQTs in the coming year, and to us filling some vacancies by redeploying staff from other roles as they became available. Nobody likes to consciously cut staffing, but if you plan well enough in advance, it can be achieved without having to reduce hours or making existing staff redundant.
With budgets so tight, looking down the track and cutting back on staffing costs way before things reach crisis point is a must.
5. Adjust your spending plans
Come October, most of the areas that were unknown when the budget was set should have become clearer. By now, your SDP for the academic year will have been written and your staffing bill for the year will be known, as any departures and recruitment will have already taken place.
At this point in the school year you have the opportunity to revisit your strategic financial plan and add in a few more items off the wishlist if money allows. For example, if a UPS 3 teacher gets a promotion during the summer term and you’ve replaced them with an NQT, you may find that you’ve freed up a significant amount of money that can be put to work elsewhere.
I doubt I’ll ever find budgets exciting, though I’m lucky enough to have a fabulous SBL who does. Yet with a bit of planning, I hope to ensure that in these most testing of financial times my school’s children have what they need to thrive. And that’s why we all do the job we do, isn’t it?
Strategic financial plan – key points
1. Think ahead and build your budgets around long-term improvement goals
2. Plan your spending around your school development plan, not the other way round
3. Think about your staffing in a strategic, long-term way to avoid cliff-edge cuts
4. Decide what’s essential and what’s desirable; then add spending back in as your budget allows
5. View your budget for what it is – a vehicle for delivering great outcomes for children
Simon Botten is a primary school headteacher
