Affordable Schools: facing the financial challenges...Affordable schools facing a financial...
Transcript of Affordable Schools: facing the financial challenges...Affordable schools facing a financial...
Affordable Schools: facing the financial challenges
Amanda Stevens, Schools HR Business Partner
Andrew Minall, Head of Education Financial Services
An affordable school?
• Context
• The range of financial challenges
• From Affordable Curriculum to Affordable School – our continuing journey
• Our learning and challenges along the way
• Our next steps
Context
• Flat cash settlement from DfE while staff costs rising
• pensions, NI, pay awards, minimum wage, apprenticeship levy
• Staffing costs forms 75%+ of school expenditure
• Financial challenges well publicised:
• Institute for Fiscal Studies (IFS) estimated a five year real terms reduction of between 9% and 12%
• National Audit Office cited 8% cut equating to £3bn “efficiency” savings required
• Added pressure on small schools
Funding context• Hampshire currently one of the lowest funded authorities
• Significant efficiencies therefore already found
• National Funding Formula makes minimal difference
The local challenge• Balances are forecast to continue to drop in the next three years.
• Currently only a small number of schools are in deficit but by 2019/20, many more schools are forecasting a deficit.
• Small(er) schools particularly hit but all schools are being increasingly impacted.
• No easy answers or easy routes to additional funding but through early action and sharing of approaches and ideas, collective solutions can be found.
• Recognition that schools are in different situations therefore whilst action will be required for most, solutions need to be tailored to individual circumstance.
• Difficult compromises required
Autumn 2015 – an affordable curriculum
• Secondary financial pressures begin to emerge
• Recognition for wider school improvement solution bringing together key services
• Creation of an affordable curriculum working party which included secondary school headteachers
• Focus on small secondary schools
• Challenge - broad and balanced curriculum within financial resources available
• Output was a theoretical model paper intended to stimulate debate
Learning and challenges at this stage
• Not just about curriculum
• Curriculum is almost the easiest element
• Not many school leaders were ready to engage
• This is challenging for LA officers who have been headteachers in
time where budgets are not as constrained
• Training offer associated with this isn’t viable
• Needed to cover primary as well as secondary
Our next step – Affordable Schools group
• Move from exploring curriculum to whole school solutions
• Extension to other phases
• Two pronged approach – Universal – need to get ahead of the curve
– Targeted – significant challenge required
• Given our size, a need to ‘rate’ the financial health of our schools to assist prioritisation of activity
• Broader activity required– New headteachers
– Recruitment
– Research – the Hampshire way of doing things isn’t replicated everywhere
– Exploring gaps in guidance – pay and sharing of staff in particular
What we’ve been doing:
• Risk assessment – financial and non-financial
• Financial ratings - all schools rated and currently now reviewing ratings
• Discussion with senior leadership in Children’s Services and in corporate organisation – corporate risks
• Escalation path for intervention
• Comparison tool and blind dating
• Headteacher meetings/conferences
• Governor briefings
• Local proactive groups in most districts
• Triumvirate induction for new secondary headteachers
• Focus still on challenging leadership with their thinking
• Ensuring our staff (school improvement, finance and HR) are all on message
Non-financial risk factors
School size/PANOrganisational change
(e.g. growing/new schools)
GeographySize of school
(total pupil numbers)
CompetitionPoor results (impact on NOR, leadership costs,
etc.)Leadership changes
Pupil demographics (e.g. declining NOR,
change in cohort)
Loss making activities (not core business, e.g. community activities)
Unstable number on roll
Expensive leadership/staff
structure
High/low turnover (staff and governors)
The range of financial challenges: potential indicators and actions
• No deficit OR forecast deficit in year 2/3
• Efficiency savings sought
Arising budget pressures
Noted budget pressures
Significant budget pressures
Budget crisis
Potential pressures • Forecast deficit in year 1/2
• Significant in year budget pressure / change
• Some loss of hours or posts likely
• In deficit (first year)• Unexpected deficit
OR• forecast deficit not
addressed• Likely staff re-
organisation and/or loss of posts or hours required
• In deficit with no recovery plan
• Accumulating in year deficits
• Insufficiency of actions / traction
• Entrenched views• Deflection away
from pressures• Poor financial
planning• Skills issues• Complex staff re-
organisation and/or reduction required to avoid budget crisis
• In deficit with no obvious way of recovery
• Significant accumulating deficit
• Requires fundamental rethink of school model
• Continued inadequate action / traction
• Entrenched views• Deflection away
from pressures• Poor financial
planning• Skills issues• Viability risk
Wider Affordable Schools Plan
Headteacher recruitment,
induction and professional support
Training needs of governors, school
leaders and business managers
Ongoing input into Headteacher
meetings
Benchmark tool output
Supporting critical and bespoke needs
HIAS research into structure and
systems
Approaches for small schools
Developing and promoting guidance
where required
Examples of content that we have
been discussing with schools in the last
18 months
Things to
consider
Senior staff structure
Teaching and non-teaching
staff structures
Curriculum offer
Flexibility around use of
teachers
Use of environment and building
Income generation
Pastoral structures
Phase, Key Stage,
Year Leaders
Classroom support
Budget
Efficiency in schools
“Overall funding for schools and its distribution is obviously important, but how that funding is used in practice is just as vital. Alongside our substantial investment, we are committed to helping schools improve outcomes for pupils and promote social mobility by getting the best value from all of their resources. Effective school leaders know this is a key part of their role – core to school improvement, not an add-on or extra. Parents and taxpayers across the country expect nothing less.”
The national funding formula for schools and high needs policy document - September 2017
Similar schools, similar spending, different levels of attainment
Review of school’s efficiency DfE key findings
The most efficient schools:
• Deploy the workforce effectively, focusing on developing high quality teachers
• Make use of evidence to determine the right mix of teaching and education support staff
• Employ or have access to a skilled school business manager
• Make good use of financial benchmarking information, to inform the school’s own spending decisions
• Make use of school clusters, sharing expertise
• Manage down back office costs and running costs
• Have in place a strong governing body and leadership team that challenges the school’s spending
• Not just for governors• Use early in budget planning cycle
Is the curriculum efficient?• Leadership team • Scenario planning• Impact of current decisions
www.gov.uk/guidance/schools-financial-efficiency-top-10-planning-checks-for-governors
Top 10 planning checks for governors
18
Importance of Medium Term Planning
• SFVS - Schools must produce a forward projection of their revenue position for at least three years
• Schools can produce financial models using software
• Shows trends
• Impact of pay awards and pay protection
• Pupil number forecasts
• Staffing scenarios
• Income and expenditure data
• SIP costings included
• Early warning mechanism
• Understand surplus/deficit balances
Benchmarking
• New Benchmarking Website
• Public data published by DfE
• CFR (Consistent Financial Reporting)
• School historical data for five years
• Comparative to similar schools or specific
• Raises questions/areas to investigate
• SFVS requirement
https://schools-financial-benchmarking.service.gov.uk/
Hampshire Comparison Tool 2016-17
Phase
average
Selected
school
Comparator
schools
Deployment of teaching staff
Curriculum model and
subject capacity
Leadership team size and tasks
Leadership v TLR
Allowances
• TLRs
• SEN
• R&R
UPR Teachers
Pastoral structures
1265 hours
Deployment of support staff
Use of overtime
EHCP hours v actual
hours in the schools
Term time only weeks
Understand utilisation
and impact
Benchmark (grades
and time)
Employees, workers and contractors
Default position is employment unless nature of their use indicates they should be otherwise
• All staff on permanent, temporary and fixed-term contracts are employees
• They have employment rights that workers don’t have
Workers include genuine casual staff
• Worker have entitlements that contractors don’t have
• BUT risk that usage means they ‘become’ an employee by default
Self-employed contractors are individuals who run their own business
• Aside from Health & Safety protections, their only rights are as per their contract for service with you
• Must undertake the IR35 check as risk that they are seen as workers or employees through nature of your usage
Effective use of employment contracts
Employees
Permanent
Fixed term
Temporary
Also:
• Beware of continuous
service and employment
rights thresholds
• Also consider core and top
up options
• Job-share v part-time
Sharing of staff
One school is the
employer
Most suited to
non-classroom
roles
Limited use for
classroom based roles
Sharing staff: practicalities
Appointment or change process
Performance Management
Line Management v day to day
Development /INSET
Absence reporting
Expenses
ER issues
Where are we now? What next?
• A real mixed picture of school financial health but broadly heading
in one direction
• A number but not all schools being sufficiently proactive
• Broad range of responses from headteachers
• Some fundamental remodelling but many leaders not
understanding the need to remodel rather than restructure
• Governors really struggling
Where are we now? What next?
• Review “escalator” indicators and actions
• Further development of LA officers to enable them to better hold
their areas to account
• Regular reporting to Director of Children’s Services
• Proving viability
• Exploring primary leadership models for small secondaries
Questions?