The initial budget figures presented at the governors’ finance committee meeting painted a rather scary picture. This first attempt at the budget for Outoftown secondary school was showing a deficit of £150,000, about 2.5 per cent of the budget. With the sure knowledge that not only was there no prospect of any ‘cavalry coming over the hill’ with saddlebags filled with cash, given the current economic situation money was likely to be in even shorter supply in the future. It was clearly the time for a radical examination of the way the budget was allocated at the school and the leadership team were asked to conduct a full review before the next meeting and to arrive at some options for action to get the school back on to an even footing financially while ensuring the quality of education did not suffer.
Outoftown Comprehensive was a mixed 11-18 school of 1,100 pupils, including 150 in the sixth form, and the school had previously not made much use of the school financial benchmarking website. However, the school had recently appointed an experienced school business manager and she produced a range of information in very clear form for the leadership team meeting.
The school benchmarking site at https://sfb.teachernet.gov.uk is easy to use and gives information in an understandable and readily usable form. The system allows the school to create a set of 30 comparator schools, which is exactly what this business manager did. She used the comparator information to produce a series of charts for the meeting. She selected mainly charts based around the percentage of expenditure of the total budget and the expenditure of each budget heading in pounds per pupil on this occasion.
So as not to complicate the issue, while all the charts were made available the business manager focused on a few key charts in her presentation. The way the leadership team tackled the situation was to discuss each of the areas in turn and then come back to an overall balanced view on how to reduce the budget. They used the information from the benchmarking site to determine some upper limits on either the percentage of the planned budget or the cash per pupil amount within certain categories, after considering the strategies that could be applied to remain within that allocation.
Instead of just looking at what they wanted to do and then costing it (only to find out they didn’t have enough money), they also examined how much they could afford to allocate under each budget heading, and essentially worked from both ends to the middle to find a solution. A few examples are given in the charts here to illustrate how they tackled their task and outlining the actions they put in place to achieve a balanced budget.
On the principle of ‘start where the big numbers are’, the first area they examined was staff costs, as this is the major part of the budget for all schools and this immediately identified an area of concern. Information about the staff costs is given in charts 1 to 5.