Are schools on the brink of a full-blown budgeting crisis?

It’s filling the headlines: schools are grappling with inflation, and budget increases are failing to keep up.

Does this constitute a full-blown crisis? One headteacher has raised the idea of a 3-day school week to cope with rising costs.

Especially following the disruption to learning and life caused by the pandemic, school and trust leaders across the country will be desperately trying to avoid this worst-case scenario and mitigate the impact of budgetary challenges.

So, what practical steps can school leaders take to navigate these stormy waters?

Improving financial sustainability

Financial sustainability is one of the most important parts of any strategic budget.

However, with increasing external constraints, this is becoming harder than ever before. Here are four key areas to explore that could help:

1) Improved estate management: think about how you can better manage your land by taking a strategic approach to estate management. You may not be able to reduce running costs at the moment, but can the land be put to other uses when the pupils go home?

2) Bulk buying across your trust: consider budgeting and financial planning as a trust-wide initiative. There may be considerable economies of scale in consolidating your purchasing. Discounts may be bigger, and you may get more things thrown in.

3) Protect your resources: could you join a Risk Protection Arrangement? The Government’s Risk Protection Arrangement (RPA) is an alternative to commercial insurance whereby the UK government covers the losses instead of a commercial insurer.

4) Accessing hands-on support: there is an enormous amount of support out there. For example, you could look across your governors or community of parents for someone who has finance experience and may be able to act as a School Resource Management Advisor.

Do note, to effectively achieve the above, you also need connected systems and access to quality data as well as decent budgeting software.

Using data to make better budgeting decisions

Some schools are facing dire decisions about where their money will go: the key is good data.

Successful strategic budgets are all about using information to make better, more informed decisions about where money goes.

From demographics to population and staffing dynamics, a school is a rich and vibrant ecosystem.

Using this data helps accurately paint a picture of where savings can and have been made and what investment decisions will deliver the best return.

Improving access to data

Ask yourself, how much data do you have on hand? Is it of high quality? Is it accessible? School leaders need instant access to data to ensure budgeting decisions are well-informed.

To get the best data, budgeting software and systems need to connect and talk to each other, arming schools with the ability to accurately and effectively plan and report school expenditures.

In addition to connecting with other systems, the budgeting software you use should have a user-friendly and modern interface, capable of turning complex data from multiple sources into easy-to-read information.

I’d urge all schools to start here and ensure you’re in a position to make the right decisions, as with less money to go around, there is little margin for error.