Features: February 26th, 2010

By Chris Davies

Education, like other parts of the public sector, is entering a new era of budget restraint. The task of improving standards has become more challenging, but there are ways to respond to the challenge. The author describes what school leaders can do to get the most out of scarce resources and the support that is available to do it.

Every school is keen to get the best value for money that it can. Over the last decade, this has meant getting the most from school budgets that have been steadily increasing. Looking to the next few years, however, it seems unlikely that schools will enjoy comparable increases in funding. Although schools may come out better than many other parts of the public sector in any forthcoming spending review, there can be no doubt that school leaders will have to look harder at the way they use resources.

While the financial outlook may be less positive than school leaders have been used to, there is some justification for optimism. Recent work by the Department for Children, Schools and Families (DCSF) and others has identified several ways in which schools can get more from their resources. As part of this, Tribal has spent the last eighteen months working with schools across England, out of which we have identified five key actions in particular that school leaders can take in order to maximise the value of their spending.

Getting the most from resources by linking the budget to strategic plans

Typically, schools have tended not to link their strategic plans – particularly the School Development Plan required of every school – to their budget. This can make it difficult for headteachers and governors to understand how to achieve the most with the school’s budget. Costing priorities as part of strategic planning, and using this analysis to prioritise both spending and activity, deals with this problem, maximising the outcomes that schools get from their spending.

Looking beyond next year to prepare for the future

A second typical feature of school budgeting has been a tendency to focus on the near-term. For many school leaders this is the result of volatile funding: although schools are supposed to have had three-year budget allocations for several years, there continues to be a fair degree of variability in the final outturn for schools at the end of the financial year. These challenges notwithstanding, looking further into the future needs to be a core part of schools’ planning and budgeting processes. Spotting problems before they arise often makes them easier – and cheaper – to deal with, and exploring the implications of different funding scenarios can give school leaders greater confidence about a future that is difficult to predict.

Excluding nothing when thinking about value for money

Value for money has historically been a term associated just with procurement. But, realising the full potential of a school’s resources means looking at every area of a school’s spending. In many cases this will mean thinking regularly about staffing, since this absorbs over two-thirds of the average school’s budget. The balance between teaching staff, teaching assistants, and administrative staff needs in particular to be kept under constant review, to ensure that all are contributing to the best possible outcomes for teaching and learning.

Making sure all the school’s suppliers are working hard

Although value for money is not just about procurement, suppliers do make an important contribution to a school’s success. Active management of the school’s most important contracts – those that cost the most, or are critical to the working of the school – therefore needs to be a priority for school leaders. Giving these contracts the right attention can help to bring down costs and drive up quality. This principle applies as much to contracts with local authorities as it does to external suppliers. Although the relationship with local authorities is complex for schools, a commercial attitude and a willingness to work with other schools using the same contracts can help school leaders get the most from services provided by their local authority.

Collaboration is a real route to improving value for money

Schools are increasingly seeing the benefits of working together, and resource and financial management is one area in which collaboration can deliver big returns. Working together can mean everything from sharing resources (including key administrative resources such as a school business manager) to sharing experiences. Comparing staffing models, approaches to planning, and notes on suppliers can all give new perspectives to old problems. Schools can also come together to pool their buying power, encouraging suppliers to offer better deals in return for a bigger market.

Principles into practice

In many respects, the principles set out here will be familiar to school leaders. Putting them into practice, however, is more challenging. One West Midlands primary that Tribal worked with needed help to understand what it could do to turn around a budget deficit. Looking over a three-year horizon demonstrated that, with pupil numbers falling, doing nothing was not an option. Using a simple financial model to test different scenarios, the school looked at how it could change its staffing structure to support excellent teaching and learning in this tough environment. Naturally, the answers were far from easy, but by taking a long-term view and spending time addressing the problems in advance, the school has been able to identify ways of providing the same curriculum for students with fewer staff.

The challenges become even more substantial where schools face more problems than just the financial. In 2008, Tribal worked with a secondary in south-east England that not only needed to get more from its resources but was also dealing with the impact of having entered a special measures regime. A key step for the school was identifying the way in which its resources affected outcomes for students. Recruitment in key subjects was proving difficult and the senior leadership team was disproportionately absorbed dealing with administrative issues as support staff lacked key skills.

Taking a comprehensive look at the school’s plans and staffing structures, the leadership team quickly identified that it needed to change the way it structured key teaching roles in order to attract better-quality staff. The team also explored how it could develop existing members of staff to provide both stability and expertise in key subject areas. Finally, the leadership team devised a plan for closer working with support staff to develop their capabilities. This has all contributed to the school making progress in improving results, teaching and learning.

Examples like these are increasingly showing how important good resource management is to achieving better outcomes for students. In November last year, DCSF published a discussion paper – Securing our future: using our resources well – to kick-start a debate about what can happen next to support schools in this area, and school leaders should expect to see more this year about why resource management matters. As with so much in the public sector, there are no easy answers here, but school leaders taking the kind of steps outlined above are beginning to see how a greater focus on getting the most from all their resources can help them achieve their school’s full potential.

Chris Davies is Government Services Director for Education at Tribal. www.consultancyforschools.co.uk