Financial benchmarking for schools: how to use the DfE tool and act on what it shows

Financial benchmarking is the process of comparing your finances against other schools or trusts with a similar profile, by phase, size, location and funding. The purpose is to understand whether your spending makes sense for your context, and to spot areas that might need more investigation. 

It can show you where resources might be stretched too thin, where a spending area is particularly different to comparable schools, and how trends are moving over time. It gives leaders and governors evidence to support difficult decisions, and it helps you justify a funding request or a change of approach with data rather than instinct. Essentially, giving you the chance to make more informed decisions about budgets. 

For the wider picture, read our guide to financial planning for schools and trusts.

The main free way to benchmark is the DfE’s Financial Benchmarking and Insights Tool. The benchmarking tool is available to every school and trust in England, and it lets you compare at school, local authority or trust level. Anyone can view the headline figures, but you will need a DfE login to reach some of the more detailed features. 

The DfE tool brings together and replaces the older View my financial insights and Schools financial benchmarking services, so if you have used one of those before, the principle will feel familiar. 

You search for your school or trust, and the tool draws on your most recently published consistent financial reporting (CFR) data to show your headline position and how your spending compares with similar schools. From there you can dig into individual cost areas, change the comparison group, and model the effect of a possible change before you commit to it.

The tool opens with your headline numbers: your in-year balance and your revenue reserve, based on the latest CFR return. Below that, it highlights your top spending priorities and gives each a red, amber or green rating where your spending is significantly out of step with similar schools. 

It is important to read those ratings for what they are. A red rating is not a mark against you and it is not a judgement on performance. It simply flags that a particular area is well above or below what comparable schools spend, so it is worth understanding why. There may be a very good reason, and the tool is the first prompt to ask the question, not the answer to it. 

The comparison uses two sets of similar schools, one for running costs and one for building costs, and you can change those comparators or build your own set.  

Benchmarking covers four main cost areas: teachers, other staff, supplies and services, and buildings and land. Trying to review all of them at once might not be the clearest way to get the visibility you need, so it helps to start where a difference is most likely to matter: 

• Staff cost as a share of income, since pay is the largest part of any school budget 
• The balance between teaching and support staff spend 
• Premises spend per pupil or per square metre 
• Reliance on supply and agency staff versus permanent hires 
• Reserves and your in-year balance, as a measure of financial headroom 

Staffing and agency spend is usually where benchmarking is most revealing, because it is the largest cost and the area schools most often find they see the biggest differences when comparing to other schools. Many trusts go further and set themselves a ceiling for staffing costs as a share of income, using benchmarking to check where each school sits against it. 

These are the areas where a gap from comparable schools tends to be meaningful, and where a change is most likely to be worth the effort of making it. 

Benchmarking is very good at showing you where the differences are, but it does not tell you why, and it does not tell you what to change.  

A useful approach is to treat each flagged area as a question rather than a verdict. If your spend on something is higher than most similar schools, is there a reason that holds up: a split site, a particular pupil profile, a deliberate choice you would defend? If not, is the gap big enough to be worth acting on, and what would acting actually involve?  

It also helps to look further into what schools performing well on a given cost area are doing differently, so you can see what good looks like. Practical actions might be reviewing a staffing structure, changing a supplier, or bringing several schools together for central procurement on a cost that benchmarking has flagged as high. Benchmarking works best as a validation tool for your budget and strategy, checked against your own finance system, rather than a source of decisions on its own. Once you know where you stand, choosing a system that can act on it matters. Our guide to the best accounting software for schools covers how to choose. 

Your finance and budgeting software may include modelling or forecasting tools. Before you change a staffing structure or a spending line, you will want to see what it does to your budget, not just this year but across the next few. For a more comprehensive read, see our guide to school budget planning. 

Benchmarking is powerful, but only when it is done thoughtfully. A few common mistakes include: 

• Using a poor comparison group. A small rural primary and a large urban secondary tell you very little about each other. Set comparators that genuinely match your profile. 
• Treating it as a one-off. Conditions change every year, so benchmarking should be a regular discipline, not a task you complete once and file away. 
• Trying to review everything at once. Focus on one or two areas where there is real scope to change something. 
• Reading the numbers without context. A new build, a one-off cost or an unusual year can distort a figure. The data is a prompt to investigate, not a conclusion on its own. 
• Assuming it must find a problem. Sometimes the result is that you are well matched to similar schools. That is a legitimate and useful outcome. 

If you are running the finances of a single maintained school, often without a dedicated finance team, benchmarking brings an outside perspective into decisions that can otherwise feel isolated. It gives you evidence to take to your governing body, and it also fits naturally into the school’s financial value standard (SFVS), which expects governors to review how your spending compares at least once a year. Benchmarking is increasingly part of how governors are trained to hold schools to account, because it lets those without financial experience see the position more clearly and ask meaningful questions. 

The most practical habit is to treat benchmarking as a year-round reference point rather than something you reach for only at return time. Working through the data with your leadership team and governors, and returning to it when a decision comes up, keeps your finances visible and gives you confidence that the choices you are making stand up against schools like yours.

For a multi-academy trust, benchmarking works on two levels – the ability to compare your trust against others and compare your schools against one another. Trust-to-trust comparison shows whether your central and school-level spending is proportionate; school-to-school comparison inside the trust helps you spot which schools might need support before a small pressure becomes a real problem for example, where a staffing benchmark is highlighted as disproportionate to others. 

Benchmarking connects to reporting that trusts are mandated to do. Benchmarking your position feeds the financial narrative behind your budget forecast return – take a look at our guide to the academies budget forecast return for the latest changes and how to prepare.  

Pairing benchmarking with ICFP is also a well-established approach for trusts working to bring schools out of deficit, using the benchmark to spot the issue and ICFP to redirect resource without narrowing the curriculum. Our guide to integrated curriculum and financial planning explores this in more detail, including adapting to change and achieving long-term financial sustainability.  

Consistent coding is the underlying basis for trusting your benchmarking data. The comparison only holds if schools record income and expenditure in the same way, and in practice, this isn’t always the case, even under the CFR framework. The DfE Chart of Accounts is the direction of travel here, bringing coding into line so that comparisons mean what they appear to mean. 

It is worth knowing this when you look at your own position, and worth asking of any finance software you use: does it keep your coding aligned with the DfE’s framework as that framework changes? Software that keeps pace is one less thing for your team to manage, and it means the figures you benchmark against are ones you can rely on.

Benchmarking shows you where you stand, but acting on it needs three things the DfE tool can’t do for you: modelling a change before you make it, keeping your coding consistent so the comparison is trustworthy, and producing a clear picture for the people who sign off your decisions. 

Our budgeting software, Access Education Budgets ensures that when benchmarking flags an area worth looking at, you can model the change against your budget across several years and see the effect before you commit. Alongside our accounting software Access Education Finance, it keeps your actuals and coding aligned, so the position you benchmark against is one you can trust. 

The platform behind Access Education, Access Evo, includes tools such as Access Evo Researcher which works like your most well-informed colleague: you can ask, in everyday language, where your spending sits against similar schools, and have the benchmarking report your governors or trustees expect prepared for you, using your live data. The work is done for you, but the judgement stays with you. You review, and you decide. 

That is the point of benchmarking, and of the software that supports it. Not to hand your decisions to a system, but to give you the time and confidence to make them with the data you need to support them.