School finance – has your MAT considered GAG pooling?
Mat Smith, chartered certified accountant and solutions architect at PS Financials, part of the IRIS Software Group, puts a spotlight on improving school finance through General Annual Grant (GAG) pooling. Lord Agnew, the under-secretary of state for the school system, suggested that GAG pooling – where a multi-academy trust (MAT) collects general annual grant funding centrally and allocates budgets to individual schools – is an effective way to improve best practice. Research has shown that more centralised trusts perform better financially too. However, only five per cent of MATs are considering taking this route, according to one survey. So, what three areas should MATs explore when considering GAG pooling? 1. Champion achievement for all One advantage of GAG pooling is the opportunity for MATs to even out the funding schools receive in different postcodes, which enables more targeted financial support for weaker schools. If managed well, this can raise standards across the group. What’s needed is a culture where MAT schools are encouraged to champion the achievement of all children in the group. A commitment to communication and transparency about how funding is allocated, and why, would be essential too. This would ensure headteachers’ agree allocated school budgets, which would then enable them to make collective informed decisions about where investment will bring the greatest improvement to the group as a whole. 2. Small changes in school finance management More centralised trusts have shown to perform better financially, but going for all or nothing can be a big step for trusts to take. One option is to centrally manage specific functions on a group-wide basis as a starting point. This would bring economies of scale to areas such as maintenance and utilities and reduce high administration or premises charges. Local purchases and more specific resources could then be managed through a school’s own individual bank account to coincide with the leadership team’s control. 3. Focus on developing your teachers Another way for MATs to take a step towards GAG pooling is with their greatest assets – their teachers. Some trusts employ newly qualified teachers (NQTs) who are given the opportunity to provide cover and support where it is needed across the group. This approach can help to cut high agency costs, provide students with a familiar face during teacher absence and enables NQTs to gain teaching experience beyond a single school, supporting their professional development. A successful move to GAG pooling requires vital synergy in the values, cultural fit and ethos of a trust and its schools. There can be strength in numbers and by getting centralisation right, trusts can ensure better resources are available to more schools, benefitting more children. For more information on school finance management solutions for MATs visit PS Financials.
Building strong relationships within a multi-academy trust
How can a multi-academy trust (MAT) engage its schools during times of change? Leora Cruddas, CEO of the Confederation of School Trusts, shares some top tips from trust leaders… Working together in a trust provides schools with the benefits of mutual support and collaboration – but it can also mean changes in a school’s way of working. So how can trusts build strong links with schools and get them on board with their overarching vision? 1. Communicate, communicate, communicate Good communication is fundamental to engaging schools in your trust’s direction of travel. While many trusts share major developments in MAT policy with their schools, the everyday news can make all the difference in your communications. Daniel Moore, finance director at Our Lady of Lourdes Catholic Multi-Academy Trust says, “We now have fortnightly head teacher briefings, news bulletins and promote all our good news and success stories.” 2. Tap in to your local knowledge hubs Never underestimate the importance of local level knowledge to your trust. School business managers have a wealth of experience, and each school has its own strengths, skills and values to share with its central trust team. As Sarah Appleby, finance director of the River Learning Trust explains, “We blend the local knowledge that the school has, which is invaluable, with the technical and accounting knowledge of the central school business partner.” 3. Promote the wellbeing of school staff Staff wellbeing is key to building strong, sustainable relationships with schools. By centralising some systems and processes, a trust can have a positive impact on school staff by freeing them from back-office tasks to spend more time on their core roles. “If we can save them 10 minutes in the day – every day – by centralising a process so they no longer have to do it, that means they have got a slightly better work/life balance.” says Sarah Appleby. 4. Share your trust’s vision Make sure your schools see the big picture for the trust. Schools will be more positive about changes to their processes if they have a clear view of the trust’s goals and achievements. Daniel Moore recommends showing schools the impact of trust-wide initiatives. “Whenever something works, like when we make a saving through pooling our purchasing, we make sure everyone knows about it.” By building relationships and forming stronger bonds with schools, a trust can work more effectively towards improving outcomes for its pupils. The views in this article are explored in greater depth in a PS Financials white paper, Checks and Balance which is available for download at www.psfinancials.com/checksandbalance/
Financial literacy learning is as important as maths, English and science
Julian Wright, Head of Education Expansion at RedSTART, writes about the need for financial literacy teaching if we are to become a money-savvy society… Rarely a week goes by when a story appears in the news detailing one of the many ways we as a nation are in some way personally in debt. Whether this is the spiralling costs of housing, the amount of debt students are leaving university with, or the amount sitting unpaid on our maxed out credit cards. The general message seems to be that as citizens of the UK, we do not understand how money works and our financial literacy is poor at best, and non-existent at worst. However, despite these constant warnings about the damage to the UK economy, and individual lives, this ‘financial ignorance’ causes, there still seems no appetite to rectify this. Despite calls from various charities, financial education remains all-but absent from the national curriculum. One of those charities is RedSTART, an organisation committed to providing key financial education to young pupils in schools. Their focus is on primary schools, as it is generally recognised that children develop their saving and spending habits early on – by the age of seven. Although financial education is not on the primary school curriculum, this doesn’t prevent teachers from integrating it into existing lessons. The bitesize ‘Money Matters’ lesson plans provided by RedSTART integrate a lot of the PSHE curriculum into its topics, allowing teachers to deliver key financial understanding as part of the school day. However this also doesn’t need to be limited to these sessions. By understanding the key elements that underpin financial literacy, teachers can contextualise and adapt existing curriculum items to deliver the same message. For example, it is a statutory requirement within the year 5 programme of study within the maths curriculum that pupils ‘recognise the percent symbol (%) and understand that percent relates to ‘number of parts per hundred’. When teaching this and other elements of percentages, there is no reason this cannot be contextualised to show how interest rates work. If you had a savings account that paid 5% interest per year (we wish!), and you had £500 in that account, how much interest would you earn in a year? Alternatively: If you had a credit card that charged 5% interest per month and you had a debt of £1000 on your card, how much interest would you pay in a month? And having introduced the concept of ‘interest’ as a percentage, it is only one very important step to teaching ‘compound interest’ – “He who understands it earns it, he who doesn’t pays it” (Albert Einstein). Opportunities to contextualise financial literacy are available throughout the curriculum, once the key concepts such as risk, reward, borrowing, lending, budgeting, goal setting and of course, compound interest have been taught. If pupils aren’t learning financial literacy in the home then the classroom is the most appropriate place to break that cycle. RedSTART Educate’s financial literacy resources can be found at redstarteducate.org and Julian can be found on linkedin.com Photo: Learning about financial literacy with RedSTART at The Oak Bank.
The role of building consultancy in securing Condition Improvement Funding
Allan Hunt is director of education at AHR Building Consultancy, and an expert on the Condition Improvement Funding (CIF) bidding process. Here, he advises on making a successful bid… MATs, both large and small, are acutely aware of the pressing issue of school condition and the shortage of funds to deal with this. For lone Academies and smaller MATs, CIF funding remains fiercely competitive, so that for anything other than the most urgent work (and even then) it is hardly a guaranteed solution. As for larger MATs, formula funding can seem like a drop in the ocean. Yet a new pot of money is unlikely to appear on the horizon – so how to make less go further? It may sound self-evident but the single most important thing that an Academy or small chain can do for the future of their school buildings – and to achieve efficiency savings – is to ensure a full knowledge of all their current condition, and likely deterioration over the near future. This is best achieved through a good-quality, thorough condition survey and development plan, which form far and away the most effective basis for strategic long-term planning. After all, you cannot make coherent plans by working with patchy information, and for smaller MATs and single Academies, who are unlikely to have a dedicated Estates Manager, this can be even more important. This is not just good practice for the sake of it – although this is certainly the approach recommended by Government in this year’s guidance document Good Estate Management for Schools. The benefits of long-term planning are manifold. For one, not considering the whole picture can create duplication. As a hypothetical example, imagine, say, refurbishing the interior of a school block one year, only to find shortly afterwards that the roof begins to leak, destroying the entire scheme. You have wasted both money and effort. Repeated interventions, necessitated by tackling problems as they come up rather than planning in advance, is not only disruptive of school life but cost inefficient, since bulking like works together can garner savings from contractors. Detailed knowledge of the condition of your campus also stands you in good stead if disaster does strike, since waiting for urgent issues to arise creates added pressure. For example while CIF exists for critical problems (and by and large the more urgent the problem the more likely a bid is going to succeed), a bid put together too hastily can nonetheless scupper your chances. So whilst unexpected issues can arise, the more you know about the condition of your buildings, the better prepared you will be to take appropriate action. Failing to plan, or to consider the bigger picture of how buildings interrelate, has longer-term consequences too. While change appears to be a constant in education, and it is difficult to anticipate shifting future needs, there are ways to head off problems. Isolated thinking creates isolated solutions, so you might, for example, set out to undertake a basic refurbishment of one school block (possibly with CIF funding for critical aspects) only to realise a few years later that curricular changes or new teaching methods make a wholesale rethink necessary. Instead, the expectation of change could have been ‘built-in’ at the same time by designing flexibly, to create a space that can be used in many different ways. Nurturing long-term relationships with consultants, rather than repeatedly drafting in new teams, can also help prevent disconnected decision-making. When under financial pressure (not to mention the time pressures so prevalent in school life), it is tempting to tackle problems as they arise, and forward-planning can feel like yet another burden. Yet this is almost inevitably a false economy. Not only is it the recommended approach, taking a step back and investing in proper planning will ultimately make life easier – and funds go further. See ahr.co.uk for more advice on securing Condition Improvement Funding for your school
LED lighting for schools – a bursar’s guide
According to the Carbon Trust, getting lighting right is essential for both energy efficiency and the bank balance of a school, and as importantly for the wellbeing of its occupants. In the third of this special series of lighting in education guides, Energys will explore how LED upgrades can create multiple financial opportunities. It can also improve site health and safety, maintenance, and deliver infrastructure gains for bursars. Many bursars know the basics; energy efficient LEDs save on bills and the environment. But, the right level and the best quality of light is crucial to alertness, accuracy and the overall enjoyment of those working and learning in schools too. And, LED retrofit technologies can minimise work on school estates, and hike up other gains on the ledger too. Energy and cost savings Overall, The Carbon Trust says UK schools could reduce energy costs by around £44 million per year which would prevent 625,000 tonnes of CO2 from entering the atmosphere. Lighting, says the Trust, represents 20% of school’s energy costs, and 8% of their energy use. ‘Currently LED upgrades use at least 80% less electricity than an equivalent tungsten halogen source,’ it continues. So, the energy and cost-saving potential for bursars and their schools is clear. Further, ‘A properly engineered LED light has a comparatively long life, typically in the order of 50,000 hours. This can reduce maintenance costs significantly depending on the light source they are replacing,’ the Trust reveals. The Trust says making the business case for such low energy lighting is quite straightforward in terms of electricity saved vs investment required. Calculating the potential savings is based on identifying: a) The current lighting load (Watts or kiloWatts). b) The hours of use per annum. c) The new LED lighting load. d) The unit rate you pay for each kWh of electricity. “It is important to establish this cost-benefit analysis in schools nationwide,” says Kevin Cox, Managing Director, Energys. “When that analysis is done, the financial pathway to energy efficient, cost-saving installation is clear.” Health and safety (H&S) In schools, H&S is key. Today’s bursar’s aren’t just financiers, they are operations managers too. LED retrofit technologies are advantageous from this viewpoint. For a start, LED bulbs are more durable than traditional bulbs, and they have fewer fragile parts. Also, they are mercury free, compared with other bulbs which, if shattered during routine maintenance, require special care and removal, to say nothing of risk to operatives. Further, LED bulbs generate very little heat, so they can’t burn staff or children, and they make for a more comfortable teaching environment. Together, it all adds up to lowered H&S risk, and lower H&S costs. “We are right up to the minute on H&S,” says Cox. “We will install to the highest H&S standards and beyond, adding to the overall, lifetime H&S benefits LED offers to school bursars.” Funding options and capital expenditure For many bursars, even when the cash and environmental rationale stacks up, financing is still a key challenge. “It is wise to consider financing arrangements to suit your needs and more importantly, ensure you are saving money from the outset,” says Cox. “There are many schemes out there, and it’s crucial to research this intelligently and pick the right one. “Energys, in partnership with Utility Rentals and Smart Eco Energy, offers a financing scheme tailored to the needs of schools and colleges.” Such an approach is likely winto favour with boards of governors, tasked with myriad, competing demands for financing. And, you can also use your LED financing plan as evidence of the school’s cash-savvy, energy-intelligent approach in marketing materials and branding. Furthermore, LED lighting can even be included in schools’ lessons plans on sustainability, increasingly a key part of the curriculum. In so doing, another dual benefit arises, with further financial gains and teaching benefits. The shift to LED lighting Energys has a number of case studies on LED upgrades for schools and colleges available. These will help you learn more, and consider the best way to embed sustainable, futurist and beneficial lights in your environment.