June to September
Link SDP and budget
A school budget calendar should start with properly costed school development plan (SDP) priorities. If they’re not reflected in the budget they’re unlikely to happen, so make sure these are built in and regularly reviewed.
September to December
Place your school in context
What do you know about your school in relation to issues affecting the local area, historic issues specific to the school itself (such as loans and deficits) or any collaborative arrangements that might be in place? Find out by going back through school records, identifying past trends, consulting with leadership colleagues and liaising with your LA.
September
Gather information
Autumn is when you want to start gathering information. Watch out for decisions made at your local Schools Forum as well as your LA’s budget strategy, as these may affect your school’s future funding.
Familiarise yourself with the school’s pupil numbers and pupil profile (the proportions with SEN or EAL, for example), which will be found in the school’s admissions data and census information.
Similarly, clarify the school’s staffing profile (in terms of structure, age, teaching and learning responsibilities and so forth) by consulting with HR and your school’s management information system.
October to march
Check your funding
Your October census return data will be used as the basis for your school’s funding, so make sure it’s accurate. Use the October census to produce an early estimate of your available funding, and update this upon receipt of your school budget share. The following March, check receipt of all allocations and update your budget, using estimates for Pupil Premium (usually issued in June) and nursery funding (adjusted in-year). Keep records that show how grant and ring-fenced funding is being spent.
Start preparing a current year outturn prediction. Be mindful of the differences between one-off variances and ongoing variances where the budget is not a true reflection of need.
Will you need to alter future budgets to reflect changing pupil numbers?
Analyse your spending to gain a better understanding of your unit costs and how they’ll behave when circumstances change. Understand the difference between funding and income, and avoid double counting. Income targets should be realistic and achievable; not meeting them will cause an overspend.
A well-constructed income strategy can mean the difference between surviving and thriving. Our blogpost ‘Schools generating income: a risky business?’ (see tinyurl.com/sfs-genincome) offers further advice on the different types of income schools can access, their associated risks and practical advice on how to mitigate these.
This October to March period also includes several other tasks that warrant further discussion – see ‘Breaking down the detail’ opposite.
March to June
Finalise your budget plan
Between the provisional and final budget plan, your previous year financial position will be finalised. This is a key recruitment period, during which you may see some changes to your staffing costs. Keeping organised, planning ahead and understanding every aspect of your school will drive your budget planning, and ultimately lead to your school’s financial success.
Breaking down the detail
Forecasting salaries Check that your budget planning software reflects the national and local context for staff pay. Are oncosts and assumptions for staff movement through the pay ranges applied correctly? Do you check individual details for each member of staff?
Ensure that you have a sound understanding of current staffing structures, how they may change in the future and any potential movement of staff through the relevant pay ranges (bearing in mind that this is more complex for teaching staff since the introduction of performance related pay). We offer detailed advice on how to approach this in a blogpost titled ‘10 top tips for forecasting teacher pay budgets’ that you can find at tinyurl. com/teacher-payforecasting.
Budget setting always involves some unknowns. The safest approach is to assume the most expensive scenarios, but your professional judgement is also important. Ensure that assumptions are realistic, as well as cautious – especially when funding is tight. Consider your approach to covering absence, namely the costs of agency or directly employed cover staff and staff absence insurance. Whatever your set-up, ensure each element is accurately costed, taking the trends of previous years into account.
Annual reviews and operational costs
To ensure value for money (VfM), review all services, contracts and buybacks at least annually. A renewal calendar can support a rolling review, help to promptly identify any need for change and ensure that sufficient time is set aside for making alternative arrangements. Use your negotiation skills to get the best deals for your school.
Ensure that your budget reflects any changes in contracts (such as task frequency and labour hours), energy consumption and prices, and the costs of any needed repairs and maintenance. Does your school have a regular programme of refurbishment? Do any special circumstances apply, such as private finance initiative payments?
You should also use financial benchmarking tools to compare your spending with that of other similar schools. If any significant differences arise, use deeper analysis to justify that spending or evidence the need for things to change. Contact other schools for tips on how to do this. Finally, have a clear plan for using balances and keep it under review.
What if the budget doesn’t balance?
Double-check everything for accuracy. See if any support is available from peers, your LA, MAT officers, local SBL networks or any other collaborative arrangement. If you really can’t balance your budget, you must alert your funding body and seek their support and guidance regarding the next steps.
The best way to avoid a deficit is to plan three to five years ahead. If you wish to foster a VfM culture in your school and produce an effective budget plan, multi-year budgeting is essential.
Develop a range of scenarios that you might encounter in future years. That way, you’re effectively buying yourself time by identifying issues and resolving them well in advance. You can find further advice on multi-year budgeting in our blogpost ‘Using our SFS tools: A real life experience’ (see tinyurl.com/ sfs-real-life).
Your solutions might involve staffing reductions, re-negotiating contracts or encouraging cultural changes in staff behaviour aimed at reducing waste and generating efficiency savings. Consider your income strategy and undertake a full budget review.
Julie Cordiner is an education funding specialist; Nikola Flint is a school business leader. Both are co-founders of School Financial Success – aiming to help schools navigate difficult financial challenges.
