Case study

Three-year budget plan helps schools to address budget deficit

Forest Way School's headteacher and staff help other schools to improve their financial health through budget planning and staff changes.

Image: Two people looking at computer

Forest Way in Coalville, Leicestershire, is a single academy trust teaching school and national support school.

Headteacher Lynn Slinger and her staff (including specialist leaders of education) help other schools to improve their financial health, through budget-planning and staffing changes.

In some cases, their support has had dramatic results. It has helped to turn around schools with deficits of around £500,000 to a budget surplus within 3 years.

If a school’s in financial difficulties, Lynn and her team’s immediate focus is to construct a 3-year budget plan. This allows the governing body to see that they may face short-term costs before they see a long-term improvement in the school’s financial health.

Budget planning can take between 3 and 4 months to complete so that Lynn’s team can examine each element of the school’s expenditure. They will then develop savings scenarios for the school’s leadership team to consider. A key element of this is staffing costs. This involves a comprehensive review to identify which roles the school needs to deliver the curriculum and the costs of each role for the next 3 years. This often means questioning some fundamental assumptions about the existing staff structure. To address deficits of around £500,000, Lynn and her team have had to advise on some large-scale changes to both teaching and support staff structures.

The 3-year budget plan means schools can look at forthcoming retirements and staff moving on to other jobs. Projected costs in budget planning incorporate a worst case scenario of low natural wastage. This means that the school can prepare to meet the costs of redundancies if necessary. In many cases actual redundancy costs will be lower than this.

Lynn and her team have found that engaging early and extensively with unions is critical to implement changes to staffing structures successfully. It’s also essential to engage the whole leadership of the school in savings decisions. This includes the headteacher, staff with finance expertise (such as the business manager), and governors. The decisions are not simply how to balance the books, but how the budget can best support the educational priorities of the school.

It is critical for school leadership teams to present the savings scenarios to colleagues as clearly as possible. The school’s finance team needs to ensure that all budget planning documents are straightforward and transparent so a non-financial audience, which may include governors, can carry out their roles effectively.

Lynn’s team has found that implementing savings options to turn around a substantial budget deficit of £500,000 or more is generally a 3-year process. The first year focusses on budget planning and making sure that staff and unions are on board. Any changes, for example to staff structures, are then implemented gradually in years 2 and 3. Because of this timescale, Forest Way generally continues to work with schools, in a more light-touch way, for up to 12 months after the school has agreed its new budget plan.

If you’d like to find out more about the support that Forest Way is providing, you can contact Lynn Slinger.

Published 26 May 2016