Budgeting in difficult financial times

We find ourselves once again facing times of financial hardship and, on a personal level, in times of austerity the sensible course of action is to economise and prioritise the essentials. I’m sure I am not the only one who is shocked at the significant rise in the cost of everyday items, and the massive increase in day-to-day living expenses. I am now more likely to avoid the items I don’t need, and look at alternative options for purchasing items that, up until now, I have always taken for granted.

Being of the vintage that I am, I have been here before a couple of times, and it is true that there is always an end - be it not when you expect or sometimes want; the ‘light at the end of the tunnel’ does eventually appear. In the meantime, what the current situation does do is re-introduce half-forgotten behaviours and attitudes as coping mechanisms for where we are. Economising and limiting yourself to only having the essentials are part of that, but there are also many other options that are available to you in times of hardship.

I could spend some time giving anecdotes and examples - like how much cheaper it is to make your own cakes, share lifts, eat in, etc., but the purpose of this article is to identify how these behaviours can be transferred from personal experience to business practises in schools.

In education, even just the essentials are often expensive and hard to afford. In the current climate of increasing pay for all staff, the most expensive resource is the most volatile, and costs are increasing rapidly. Add to this the significant rise in energy costs, and the effect that all of this has on supply, and we have the ‘perfect storm’. With schools and academies having different levels of reserves, the ability to survive in this situation is varied but no less worrying for us all.

We have been fortunate in the last few years (fortunate coming from the Latin word fortunatus, meaning ‘prospered’, ‘prosperous’ or ‘lucky’, so you might not agree with this adjective to describe our finances!) to have received ongoing increases in funding. According to government statistics found at https://explore-education-statistics.service.gov. uk/find-statistics/school-funding-statistics this has amounted to a rise in per mainstream pupil funding of 44% since the 2010-11 school year. For some, this has not been enough but, for others, it has fostered a spending pattern which has been rising in line with income.

This is not an unusual phenomenon; it is a known human condition to live within your means. What this does mean, however, is that when times of financial hardship come upon us, we need to have a change of mindset regarding our spending. There are some positives to this; if you have been over-supplying, investing in future-proofing technology or over-staffing, for instance, you have a readily identified area where you can make some significant savings. Investment in buildings, IT and resources may mean that you are able to cut back on resource expenditure in these areas whilst times are lean, and you re-configure your budgeting.

Tools Of The Trade

There are tools out there to help you with this. The integrated financial planning model, championed by the DfE and ISBL, is great for helping you cost and plan your largest spends around your curriculum planning and staffing. Alongside this are the various benchmarking tools that can be used to assess and highlight areas in your budget that might need a closer look. Social media is a good place to gain ideas and comparisons with other schools and academies, along with research which can help to guide good practice and, perhaps, reign in some of those extraneous expenses.

There are also the more basic aspects of efficiency - making sure that we are getting the best value for our schools is always important. It is very true that education can be seen as a soft target; how often have you picked up the ‘phone, or opened an email, straight after the government has published some new funding, suddenly finding yourself in demand by all sorts of suppliers who would like to show you how to spend it?

Always making sure that you are ‘testing’ the market, even if you have always used a certain supplier, can ensure that the prices that you are charged are fair and proportionate. Using frameworks such as such as those recommended by the DfE could help with costs - my school used the print framework and saved thousands.

Let’s also not forget the benefits of collaboration, my favourite word. Look at every need that is highlighted in your school and ask yourself the questionsCan I share this cost? Can I collaborate on this? What other places can I find this? This could extend the opportunity for more than just your school or academy and benefit schools that were already in a difficult financial position before the current crisis.

Our industry is very fortunate to be populated with vast experience and knowledge; maybe one of the efficiencies we can make is to start sharing this between us and stop ‘buying it in’. My school is part of a soft federation, and we are looking at more peer sharing, holding our own conferences and offering support from our experienced senior team and subject leaders. Economies of scale that reach outside the academy system would benefit maintained schools, and this is already starting to happen.

Of course, a further benefit from collaboration is the sharing of good practice and innovation which is priceless! 