Covid-19
Although funding from the Department for Education continued as planned, this year has been a real challenge for schools, with the changing situation creating a number of additional expenditures which couldn’t possibly have been budgeted for at the start of the year.
The results from a recent survey, Taking Education’s Pulse, highlighted the differing financial impact of the Coronavirus on Britain’s schools. Almost half of respondents reported feeling uncertain about the difference between their current budgets and the projected figures at the beginning of the year.
The majority couldn’t easily pinpoint whether their budget would go up or down, and almost 60% agreed that a loss of income would have a major impact on their budget. Four fifths feared the monetary value of that loss would be anything up to £39,000 - for many that’s the equivalent of a full-time member of staff.
Covid-19 stifled many of the income-generating activities academies and schools would normally rely upon, such as hiring out facilities or running after school clubs. Without healthy reserves, those who ‘only just’ manage to balance the books risk being plunged into financial hardship.
Budgeting
Luckily, this year’s Budget Forecast Return (BRF) process took into account the impact of Covid-19. Not only was the deadline extended by two months, the government removed the need for schools to submit forecasts for academic years 2021/22 and 2022/23 for this year only. While this news was welcomed by finance teams, it’s likely that any budget plans made now will need to be revised quickly and potentially multiple times in such a rapidly changing situation.
Academies reliant on outdated finance systems will struggle to remain adaptable - potentially creating problems later down the line. Of course, complex budgets are regularly created using spreadsheets but how quickly and accurately could you model changes to optimise resources and make the most of untapped opportunities?
Budgeting technology enables school leaders to visualise the impact of any changes and put in place adequate contingency plans. Schools could, for instance, save money by increasing class sizes, however, this could lead to heightened levels of stress amongst teachers. When considering the associated costs of supply teachers and a high staff turnover, this could actually turn out to be a false economy.
The Access Education Finance and Budgeting software allows staff to accurately track spend against the overall school budget, to ensure schools get the most from their limited funds.
Scenario planning can be introduced if there are concerns about future spending levels, quickly and easily modelling a drop in income or any changes to expenditure. This can help finance teams better shape short, medium and long-term plans as we begin to ease back to normality. Potential overspends can also be identified and addressed quickly and any surpluses routed back into the school.
Teachers’ pay grant
The fact 2020/21 is the final year of the teachers’ pay grant (TPG), an initiative designed to help provide funding for schools to support teachers’ pay, is likely to intensify any financial challenges facing schools. It’s estimated that the combined “little extras” funding and the Teachers’ Pay Grant are worth approximately £100,000 for a typical secondary school and £22,000 for a typical primary school. Losing these amounts risks putting many schools under severe financial strain.
Conclusion
While the long-term impact of Coronavirus remains unknown, school leaders will be relying on their finance department more than ever to come up with creative solutions to minimise disruption and ensure the best educational outcomes for pupils.
Knowing your finances inside out and being able to monitor and model any changes as soon as possible is a wise move, although this can become tricky for an already busy finance team managing a complex budget. Technology, such as the Access Education Finance and Budgeting software, can help ensure cost efficient commissioning and purchase of goods and services depending on the level of income and expenditure at the time, facilitate more in depth reports and ultimately, help you keep a closer eye on your finances.
Find out more about Access Education Budgeting Software