A to Z School Budget Guide for School Business Managers

Introduction

In March 2021, the nation started a healing process after a year unprecedented in our lifetimes. With industries affected nationwide, the government took radical financial action to restore an economy damaged by the Covid-19 pandemic. While funding was provided to several institutions, the education sector was largely neglected. Aside from catch-up schemes and planned budget increases, schools are once again facing the daunting prospects of improving pupil outcomes on a shoestring budget. This puts distinct pressure on the unsung heroes of the educational world, the school business managers. Their role in the school budget planning cycle is vital to the success of an institution and its fair to say, it is one of the trickiest tasks going.

But fear not! A school budget plan does not have to the behemoth you think. In this post we will look to highlight the key areas that senior leaders and school business managers should be addressing to get the greatest bang for their buck and will also highlight how Bromcom’s financial solutions help to facilitate this process.

primary school budget example

Funding in Education

Primary and secondary school budgets across English schools amounted to £44.5 billion in 2019-20. This figure has increased by £3.2 billion to £47.7 billion in 2020-21 meaning that in 2020-2021, funding per pupil sits at approximately £6,280. This is expected to increase over the course of 2021-2022 to £6,680.

Maintained school funding is distributed to local authorities through the DSG (Dedicated Schools Grant). Budgets are then assigned to individual schools within the district based on several factors. There is no set school budget template and many variables come into play including basic entitlement, FSM allocation, low prior attainment and EAL needs.

Each school does receive a minimum funding guarantee which ensures protection in case of unforeseen changes to per-pupil funding.

Academies are funded in much the same way, with some exceptions. Unlike maintained schools, their funding is primarily from the GAG (General Annual Grant) and is paid directly to the trust by the ESFA (Education and Skills Funding Agency). This funding is based on the academic year and not the financial year, another difference from maintained schools.

Another important distinction to make here is that maintained schools need to ensure they do not have significant annual school budget surpluses as this money can be taken back by the local authority. Academies are allowed to retain any remaining finances.

Now to the subject at hand, how to develop a school budget…

Aligning the School Budget with School improvement Plan

School budget management ultimately begins with school budget preparation and this needs to be focused on the agreed upon improvement plan. Ultimately, the main purpose of the budget (alongside assuring the building stays upright) is to ensure pupil progress and development.

A school improvement plan should not be an ad-hoc document thrown together at the last minute to appease stakeholders, this should be a carefully constructed course of action ideally based on a five-year rolling cycle. This allows for reflection on previous spending as well as planning ahead:

  • Two-year retrospect
  • Current Year
  • Personal Development
  • Two-year forecast

While many may consider this excessive data to navigate, it is crucial that the school’s management learn from mistakes but also utilise schemes and spending which has worked effectively in the past. Now, the data from the past should be readily available even if it involves several spreadsheets and handwritten notes, but what of future data? This is where Bromcom can assist.

As part of Bromcom’s robust cloud based financial solution, Bromcom Finance, Bromcom Budgets has a series of benefits which will be highlighted throughout this article which give school business managers all the necessary tools in their arsenal to tackle the preparation of school budgeting.

The Budget Forecasting tool provides cash flow forecasts meaning the future doesn’t have to be a complete unknown. A report is produced based on the school's profile, to date, with Bromcom’s sophisticated software highlighting predicted financial variance, moving forward.

CLBP (Curriculum Led Budget Planning)

Arguably one of the most crucial elements of maximising the school budget is curriculum led budget planning. While this process may not necessarily work for all schools, Multi Academy Trusts should look no further than this school budgeting practice.

Multi Academy Trusts have greater flexibility when it comes to developing and tailoring a curriculum as they do not have to subscribe to the standard national programme. This puts them at a distinct advantage when it comes to utilising resources across different academies and can lead to some welcome budgeting solutions:

  • Changing the curriculum: As mentioned, if there are subjects or extra-curricular activities that are not showing significant return on pupil outcomes then academies or the trust at large have the flexibility to remove these from the agenda. Clearly this might displace teachers or cause issues in terms of allocating staff resource, but this may be easier to navigate than you think…
  • Staffing Allocation: Ultimately, every school wants to maximise a teacher’s ability to teach and many schools have adopted pilot schemes where subject specialists have been given the flexibility to work across different campuses, within a trust. This helps to address the aforementioned change of curriculum where teachers are still given the opportunity to teach the subject they are passionate about and are not thrown into a term of something completely alien. This, in turn, aids staff retention as staff are less likely to become disillusioned with their timetables. This malleability will also cut budgeting costs when it comes to supply teachers being drafted in at a premium.

Ultimately, any of these changes have to be driven by data led decisions and thorough school budget analysis. Without this, the transfer of staff or the change of curriculum may not have any real effect on pupil outcomes or, worse still, may lead to detrimental results.

Bromcom can satisfy this problem. The newly introduced Multi Academy Trust Vision product is able to draw together data on pupil attainment, results and timetabling in one simple-to-use aggregated platform which provides key headlines on the performance of the trust as whole. Not only does this make the big financial decisions easier to justify, it also allows for a more granular look into individual schools, departments and classrooms. Conversations can then be initiated with department heads on how to economise or to make more of their respective pots. With this forensic level of analysis, school business managers can gain unique insight into how the budget is fairing across the board and can make logical decisions on how to distribute budgetary resource with the added backing of Bromcom’s integrated Microsoft Power Business Intelligence.

I’m sure many of you reading this are screaming ‘logistics’ and you would be right to do so. Moving resources (teachers) around is no mean feat and this can often lead to changes in salary, be it moving to UPS, multiple roles or reduced/increased teaching timetables. As part of Bromcom Budgets, there is a Staff Budgeting functionality which houses all staff salary and contract details in one centralised hub. This information can be altered too. Bromcom allows hypothetical staffing scenarios e.g., if ‘x’ leaves this post then ‘y has the potential to move into this role and therefore command a bigger salary’. This is a huge advantage when it comes to analysing staff pay which is one of the largest expenditures for schools and also does not require duplication of information to another piece of modelling software.

The marrying of all of this data within Bromcom’s cloud-based system means there are no missing links. When change is required and budget modifications are needed, Bromcom is here to support at every stage of the process.

example of a school budget

Communication, Efficiency and Automation

Originally, budgets were crafted almost solely with the reliable paper and pen. As time has elapsed many schools will house budgetary information on computers within school and while this is still more efficient than a biro, there is still scope for development.

Using a cloud-based solution means budgets can be retrieved anywhere, anytime and are not beholden to a school’s temperamental servers. The advantages of this transition are numerous, particularly when it comes to accessibility. If servers collapse or the IT manager cuts the wrong wire, the cloud has you covered. Additionally, as school business managers are often pulled from pillar to post during the day, having the tools to work on budgets from the comfort of a living room is now a reality.

When it comes to MATs, the importance of cloud-based budgeting cannot go undersold. The ability to have all financial information across different schools in one consolidated database is vital to help both plan and maintain the trust’s budget. With Bromcom Finance, there is one single point of truth for all things money and data which can be accessed by relevant leads across all academies both in school and on the go. No longer are school budget forms having to be sent via email or combined with jaunty formatting, they are readily available in a format of your choosing, be it tabulated data or graphical representation.

Additionally, all of Bromcom’s reporting to parents is automated via text messaging and email which is going to save a pretty penny when it comes to immunisation, open evening and options letters. The budget is already going to look a good deal healthier, as is your local forest!

Scrutinising and Reviewing

Once the school budget planning process is completed, the school budget management begins.

It is imperative that school business managers do not rest on their laurels although, let's face it, they would never have time to do this anyway! The school’s annual budget is subject to everchanging circumstances and there is no fool proof school budget report which will last a month, let alone a year. Furthermore, be it primary school budget or secondary school budget, all financial decisions need to be in line with government regulations.

Therefore, scrutinising and reviewing are vital to school and academy performance. Unforeseen changes can occur at a moment’s notice meaning money can be stretched in areas that may not have been anticipated which can have a knock-on effect on certain subject areas.

If a crisis does occur, there are some top tips that school leaders and business managers can employ to maximise a school budget surplus:

  • Contracts: Schools have endless contracts. It may be textbook suppliers, electricity providers or catering deals but they all add up and it is easy to get complacent when renewing deals instead of looking around. The DfE have a benchmarking system in place which details how much schools in your area are paying for similar services. This is an invaluable resource which could save you considerable amounts by switching to a cheaper alternative.
  • Utilising free/cheaper online learning programs: While it seems obvious that paying less money is beneficial, many UK school budgets will have online learning costing exorbitant amounts year on year. With the ever-increasing presence of teaching resources online many reputable sites, such as Thirdspace, offer fantastic mathematical resources at a fraction of the cost of other web based educational platforms.

Once again, these tips are of particular relevance to Multi Academy Trusts who stand to make considerable savings if these practices are exercised across schools and will likely provide a healthier looking academy budget forecast.

Yet, with so many contracts in place and courses being utilised across different schools and departments it can feel almost impossible to keep track of all start and end dates as well as contract length and costing.

Bromcom is at hand to help. The financial cloud can house all supplier contract information and automate reports either within the platform or straight to the necessary email addresses. As a result, renewals will not be missed and, more importantly, there will be the opportunity to proactively look at new suppliers and vendors in order to cut costs.

Now to regulations and Bromcom’s capabilities can help both MATs and maintained schools in equal measure. Our software not only supports CFR code mapping for maintained schools but also provides mapping for the DFE chart of accounts for academies and MATS. Comprehensive financial data is accurately converted to ensure standardised reports are in line with statutory requirements. Maintained schools also have to undertake the SFVS (Schools Financial Value Standard) which requires an accurate catalogue of what a school has spent their money on over the course of a year. Bromcom’s Reporting function makes light work of this task with complete visibility over all financial accounts and transactions across the school.

school budget worksheet

Thie Virement function completes visibility can also inspire discussion and changes to school budget allocation. Monitoring reports by month, term or year depending on selection allows for ad hoc reforecasting across any number of categories. Not only can this help to dramatically reduce waste spending and prevent unnecessary costs, its 360-degree image of all things financial means amendments can be readily justified to governors and stakeholders alike.

The school budget process will always be a challenge. With all the variables in a place of education you have to be able to adapt quickly and come up with new and creative ways to ‘stay in the black’. Bromcom Finance may not be able to predict when the boiler breaks but, if it does, your school’s finances will be so easy to read and digest that a solution will be just a matter of clicks away.

13 July 2021 / Rory Haynes