Sue Birchall, long-standing school business manager, discusses the financial pressures mounting on schools and how school business leaders can manage these difficulties
The start of term one began as always at this time of year, very energetically with the usual time thieves; for maintained schools it is time for the six month monitoring and, for academies, the start of a new financial year.
This year also brings with it the pressures of the current financial situation, which are affecting both personal and business finances, focusing on largely unknown factors. School leaders and governors are showing concern over the possible impact of the imminent increase in cost of gas and electricity, and the impact on budgets. All schools and academies will be suffering from shortages and increased costs on day-to-day supplies; the frustration levels around getting supplies on time havecertainly been a bane of our lives this term.
These cost pressures are going to impact across the board; increased fuel means greater on costs for all types of businesses, from shipping and haulage for suppliers, to costs of premises, supply chain issues and also staffing. The value of the pound will impact on our purchasing – we have become used to being able to source whatever we need from all suppliers through internet buying. Add to all this the effects of Brexit and you have the famous ‘perfect storm’.
Just looking at staffing, I believe all are feeling the effect of the national shortage of teaching staff, but my school has also found that certain support staff posts are equally difficult to fill. The increased cost of employing teachers, and also the possible increase for support staff next year, puts a huge strain on the budget. If the current rates are agreed on 4 November, many schools are going to struggle to find the additional monies to cover. The removal of the 1.25% national insurance levy is of help and there is no clawback of this year’s increase in budget to fund it; however, budgets will be adjusted in 23-24 so another reduction is wating in the wings.
I work in a maintained school and am, therefore, halfway through the financial year. Whilst we were aware that there would be some increases in our costs, forecasting what these would be at the start of the year was as difficult as it is now. The support from the government for our energy costs through the energy bill relief scheme is gratefully received but this is not promised as a permanent support – indeed, at present, it is only running from October to March. We are also hearing of future public spending cuts, which is worrying when you consider that we are unlikely to see the continuation of some of the support that we have been getting over the last few years.
So, how do school business leaders manage this?
There are some very simple, obvious, things that we can do to protect our schools and academies from the impact of all of these pressures.
It is very true that a budget in a school is only accurate on the day that it is approved; it is the nature of the beast that a change can happen the next day! Budget setting needs to have, where possible, some prudence in terms not only of cost but also of income. This prudence will mean that you will set your staffing and financial plans for the year according to what you know will come in. A maintained school will need to be aware of the balance control mechanism at year end.
Using the resource management approach, championed by the ISBL, will ensure that staffing is appropriately managed, enabling schools and academies to understand what is needed to fulfil their curriculum. When used correctly, it will enable you to benchmark all areas of school spend and, hopefully, give you some supporting information to use in approaches to senior leaders and governors about cuts in spending.
In times like these being part of the decision-making process is vital for SBPs. Knowing what the strategic plans are, being involved in conversations when replacing staff or re-structuring, and being able to have immediate, informed, discussions with senior leaders is imperative. Not much can be done after the event so pre-empting any changes to costs and income are important. On that note, maintaining regular contact with your governors who have responsibility for resources – keeping them abreast of all of the pressures that are occurring within your budget – will help you to have informed and solution-focused meetings and will ensure shared responsibility.
It feels to someone like me, who has been in this industry for some time, that we are taking a step backwards to the days when budgets were so restricted, and extra funding hard to come by. The truth is, we have been here before and most probably will be again.
Let’s make sure that we spread the load, use our peer support and come out the other side smiling!
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