Methodical planning to avoid budget misery

It’s getting harder for school business leaders to balance the books, but they can anticipate budget challenges with some careful and methodical planning, says Hayley Dunn

If Charles Dickens was writing today he might have had the worries of SBLs in mind when he penned Mr Micawber’s formula for happiness in David Copperfield: ‘Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.’
Balancing the budget has never been a bigger challenge for SBLs. For many schools it has become an impossibility while, for others, it is a case of sailing closely to the wind each financial year, managing to make things balance through some methodical planning and careful management.
The aim of any SBL should always be to produce a balanced budget that meets the needs of pupils, but it can be tricky to counterpoise affordability with the demands of curriculum planning and design – and the staffing needed to deliver it. For SBLs it is important that they work closely with the curriculum lead and the headteacher or trust CEO so that they can ensure there is shared ownership of the process – and accountability.
As with most aspects of budget planning, there are ‘known knowns’ and ‘known unknowns’ – so, planning for a balanced budget firmly depends on making reasonable, realistic and accurate assumptions about the money that you will have coming in, and the money that you will be spending. But how should you approach this?
Here are the 10 key steps I would recommend that you take.

1. When working out delegated income and grants, make sure you use accurate pupil numbers, free school meal numbers, nursery hours and numbers of pupils eligible for free school meals.
2. Create a forecast based on expected income generated through sources such as lettings.
3. When working out expenditure begin by modelling the staffing structure costs, using rates for employers’ National Insurance and pensions to make an accurate forecast – taking into account known or expected pay increases – and estimate amounts for cover not protected by insurance.
4. Carry out a non-staffing expenditure review for areas that need to be increased or trimmed, and allow for inflationary increases. Also check utility providers – such as power and water – for possible price rises.
5. Plan and meet with other senior leaders to gather information on curriculum and school development plans.
6. Gather information from suppliers – this is a good way of bargaining for good value deals. Also seek information from other staff – for example, the site manager, who can provide you with information on planned repairs.
7. Review your contracts’ register and identify any that are due to end or rollover. Check the buying deals collated by the DfE to see if they have what you need before running procurement processes.
8. Complete a sensibility check by comparing your budget to the previous year’s budget versus outturn figures, looking for significant variances.
9. Benchmark your school or trust against publicly available data, via the schools financial benchmarking service.
10. Complete a curriculum-led, financial planning analysis.

Careful and methodical planning – basing your planning on as much on information already available as possible, and anticipating the unknowns with some intelligent assumptions – can put you in a better position to ride out a tough budget environment – and have a much better chance of getting to Mr Micawber’s happy place!