How to Plan Your School Budget to Save Money and Add Value
It soon comes around every year: the annual challenge of setting school budgets that gets you great value for money while also improving standards.
Yes, it’s eye-wateringly difficult to balance demands from governing boards, department heads and parents (some warranted, some less so) as you try to make ends meet — with what is often a dwindling pot of money. So much so that recent analysis by independent think tank the Educational Policy Institute (EPI) found government figures show almost 4,000 UK schools have been in deficit for two years or longer. The number of state secondary schools falling into deficit in England has almost trebled in the last four years to more than a quarter, research says.
In challenging times it’s more important than ever to draw up a strong, forward-looking financial plan that can help your school or academy navigate all but the most severe pressures.
How? Here’s our quick rundown of the steps you need to take to plan your school budget effectively.
Basics of school budgeting
At its simplest level, a budget is made up of income and expenditure. Balance the two and you’ll be living within your means.
For most schools and academies, the bulk of their income will come in the form of grants from the government or local authorities. Schools can also access other funding, such as the pupil premium, but this money must generally be spent on specific predefined goals.
As for expenditure, it can be split into the following types:
- Staffing expenditure (usually between 75-80% of your overall costs)
- Non-staffing expenditure
- Educational expenditure (eg. departmental budgets, exam costs)
- Non-educational expenditure (eg. office equipment, support contracts)
You’ll have to juggle your spending across all these areas to create a successful budget. Let’s dive deeper into how exactly to do so.
Get your numbers straight
You can’t plan a budget without starting with accurate data, both for past performances and future predictions. Otherwise, you’re basically resorting to guesswork. So do yourself a favour and get a hold of:
- Old budgets, to see how money has been over- or under-spent in the past
- Pupil numbers from census and local authority data — the size of other local schools can also impact your numbers
- Staffing costs: is staff information up-to-date, and are you aware of the latest legislative changes?
- Exam results, so you can identify which departments need extra help
- Additional expenditure like the cost of insurance, maintenance, and exams
Look far into the future
Don’t just budget 12 months in advance and leave it at that. By creating three or five-year forecasts, you can spot deficits earlier and plan cost-effective ways of working to beat them.
Forward budget planning allows you to make smaller, steadier changes over a longer period in order to save money — rather than rolling out severe cuts suddenly. It means your school is more adaptable to change and more likely to survive in the long term.
But the future isn’t set in stone, and nor should your budgets be. The more scenarios you can plan for, the more prepared you’ll be for whatever does happen. Imagine if your pupil numbers fell by 10%, or an unusually high number of teachers moved on, or exam results were worse than expected. Make note of how your budget would be impacted in each case, and how you could divert spending. You might end up thanking yourself sooner than you think.
Move towards your goals
Your budget shouldn’t be a standalone document. Align it with your school development plan and you’ll create a powerful tool to help you move towards a better, more efficient school or academy.
What would you do if you had unlimited money? What would you improve first? This will give you a good indication as to what your school’s goals should be, and the resources you’ll need to put them in place. Consider how you can raise standards and quality of education — even in small ways — considering your current financial position.
Each improvement you decide to make, whether building a new sports hall or introducing a new marking policy, will have a cost implication. Ensure your plans are fully costed and within your budget for the year before you add them to your school development plan.
Use the right tools
The right budget planning software will help make this entire process much smoother, quicker and simpler. Our school budgeting software is used by one in three schools and half of all academies.
It allows you to:
- Plan and monitor your budget
- Create forecasts for up to five years
- Model the impact of changes
- Product quick, powerful reports
Our curriculum planning software can be used alongside the budgeting tool. It’s designed to help you to understand the financial viability of your staff structure and curriculum in the short, medium and long-term.
That was our quick-fire roundup of the key steps in effective school budget planning. To learn more about creating a solid yet flexible budget, plus in-depth tips on all of these steps to boost your income while reducing your costs, download our guide to School Budget Planning.
