By Gary Burke, a governor at a SEND school and former Liverpool City Council finance manager for schools and high needs.
It’s no secret that schools across the UK are struggling with budget constraints – a situation that has only worsened since the start of the COVID-19 pandemic in 2020.
Recent findings from a National Governance Association (NGA) survey have revealed that 60 percent of governing boards are concerned about not being able to balance budgets, up from 52 percent last year and 44 percent the year before. The NGA says this is the highest proportion since its survey began.
School and academy leaders, alongside business and finance managers, have been looking at ways to help the situation, but there is often little room to make savings when these institutions rely heavily on government and local authority funding.
The Children’s Wellbeing Bill, announced in the King’s Speech, affirmed the power of local authorities, requiring all schools to cooperate with the local authority on school admissions, SEND inclusion, and place planning.
It’s clear that further action is needed on a national level to increase the level of funding available, with those working within schools now turning their attention to the meaningful steps they can take to predict – and therefore maximise – their budget for the next academic year.
This coincides with the impending deadline for this year’s budget forecast return (BFR) for multi-academy trusts, the 29th August. Though useful, the need to collate vast amounts of data for past, current and future financial years means this task can quickly become laborious and time consuming.
The challenge has only grown this year, owing to a new requirement to submit data which monitors spend in key areas of ICT, such as onsite servers and administration software. In turn, many are seeking solutions that alleviate the administrative burden – with technology proving a game changer.
The challenge to overcome
While the exact time it’ll take to compile a budget forecast will differ depending on the size of the team and the school or academy, all will agree that is no small feat. Often, it may be the responsibility of an individual finance manager to handle.
From demonstrating a clear understanding of how much is being spent on ‘building’s repairs/maintenance, and/or improvements’, to how much the trust spends on resources such as laptops and textbooks, there are various data points to account for.
For those reliant on out-dated systems, this task becomes even greater. Teams may be pulling data from multiple sources or spreadsheets, unsure on the level of accuracy or if they are missing certain information.
In an ideal world, teams should constantly review the accuracy of their forecast to prevent any shocks or unforeseen funding challenges, meaning all data will also need to be updated on a regular basis. This is particularly crucial for academies that cater to special educational needs (SEN) students, where additional resources, such as specialised staff or equipment, are required and can be difficult to predict in advance.
Making an impact
Having full oversight of their budget in real-time will allow academies to see if they can direct funds to the areas that need them most, as well as identifying and predicting trends in spending.
We’re seeing this becoming increasingly important, with research from Access Education showing that there has been a significant 115% increase in those using budget adjustments and re-forecasting capabilities throughout the 2024 financial year, when compared to 2023.
Budget management software is transforming the ease of the process, creating a comprehensive and accurate budget plan that accounts for all revenue sources and expenses. The ability for teams to monitor their school’s actual spending against their budget plan means they can adjust their approach throughout the year to ensure they remain on track.
Automation is facilitating this approach, with cloud-based financial software packages, such as Access Education Budgeting, removing the need to manually input various funding formulae when calculating and analysing data.
To facilitate long-term planning, the software can also generate financial forecasts for up to five years. One feature here is to automatically recalculate data, such as pupil numbers from one year rolling into the next – saving countless hours of administrative time.
Inevitably, to be fully prepared for budget surprises, whether caused by internal or external factors, means schools will need to model the impact of different scenarios. If teachers’ pay increased by 5%, for example, users would be able to see the effect of this on their overall budget.
It can be hard to predict changes in areas such as funding, pupil numbers and staffing costs, but by using scenario forecasting for up to five years ahead – supplemented by experts’ knowledge of the education sector and historical data – schools and academies can be best prepared for the future.
