A recent study by The Education Policy Institute found that the number of secondary schools in England with budgets in the red has increased dramatically in recent years.
It reported that 30% of local authority secondary schools are now unable to cover their costs and that this figure has almost quadrupled in four years rising from 8% to 30%. The average debt for a local authority secondary school now stands at £483,000 with one in ten carrying a deficit that is over 10% of their total income. With larger premises, more staff and an increased need to provide more supportive services some secondary schools have had to cut extra-curricular activities such as school plays and music lessons.
The report also highlighted the difficulties for special schools with the number of schools in deficit doubling in the last five years. The average deficit was estimated at £225,000.
The picture across all schools is more positive with only 8% of primary schools being in deficit and schools in an academy trust reporting lower levels of in-year deficits. In recent press articles, the Department for Education raised the fact that the report also showed that 94% of academy trusts and almost 90% of LA maintained schools overall are breaking even or reporting a surplus. 40% of primary schools, 46% of special schools and 34% of secondary schools have surplus balances. One of the recommendation points of the report, by The Education Policy Institute, was to review unallocated surpluses to see if funding can be better distributed and “consider if existing rules allow for these resources to be used effectively”.
With added funding pressures you may be looking for ways to reduce spending.
Earlier this year, the DfE published a ‘Top 10 Planning Check for Governors’ which suggests reviewing:
- The pupil teacher ratio (PTR) – how many pupils there are to each teacher in the school and how this varies across different key stages;
- Class sizes
- Contact ratio – the percentage of a teacher’s time that is spent teaching.
They suggested that Schools could benchmark themselves against other schools on the first two measures and use the ASCL suggested contact ratio of 0.78 as a guideline for the third point. This is based upon 10% of time on planning and preparation, 10% on management activity and allowing 2% margin. They also suggest considering cost per teacher, the structure of the leadership team and approaching financial planning through the curriculum-based approach. If you want to read more about this approach, click here. https://epi.org.uk/publications-and-research/curriculum-based-financial-planning/
SAM can also help you make significant savings, on average reducing absent days by 40%*. The impact then on the reduction of supply and associated absence costs is significant and could help you to reduce deficits and required budget. It could make all the difference to being in the black or the red as one school saved £47,000 in just 18 months. If you would like to work out how you could save, use our calculator. To see how SAM could also save you time as well as money book a demo, just call 01924 907319 or use our online form.
If you are planning a staff review, a restructure or any changes to pay and conditions, make sure you speak to your HR Consultant first. You should review your plans with them from the beginning so they can help and advise you through the situation correctly. You can take a glance at our sister company’s Guide to Restructures cartoon for a quick overview of the process and why it is important to get HR advice https://www.fusionbusiness.org.uk/a-quick-guide-to-restructures/.
If you need assistance with any restructures, pay grading reviews or redundancies, take a look at our sister company’s website www.fusionbusiness.org.uk or please give one of the team a call on 01924 827869.
References:
https://epi.org.uk/publications-and-research/school-revenue-balances/
https://epi.org.uk/publications-and-research/curriculum-based-financial-planning/
*Average reduction in absence days of 40% taken from autumn and spring term results across 10 schools that have effectively used SAM since Sept 2015.
