Under pressure?

With school budgets set to be significantly tighter in the new financial year, Nick Bannister talks to leaders about the measures they have taken to make the most of their resources.

Back in 2008 the media headlines were dominated by stories of banks in crisis and the credit crunch.

Few of us at the time could really say what the long term implications of the upheaval would be, but Nottinghamshire headteacher Chris Wheatley was worried.

“I went to my governors and said that we shouldn’t allow grey men in grey suits dictate the future of our children,” recalls Chris, headteacher of the 550-pupil Candleby Lane Primary School in Cotgrave, on the outskirts of Nottingham.

“There are enough social problems in this community as it is. It’s a former mining community which was hit hard when the pits closed. A very high percentage of children have free school meals and there is very high youth crime.

“But this school is extremely successful and it’s also the hub of the community. We wanted to protect that at all costs. What we had to do was to make sure that we were well placed when budgets inevitably started to be hit.”

Two years have passed and the comprehensive spending review has now set spending levels for schools for the next four years. Although the full implications of the settlement are still emerging, schools will miss the spending growth they have enjoyed during the past decade. The next financial year will mean that many will need to change the way that they have been managing their resources. Indeed many schools may have to pay for services that have been free in the past, or pay more for services that used to be subsidised.

"Don’t ask 'what are we going to do' but 'how are we going to do it'."

Having professional business nous has been crucial to Candleby Lane’s plans. Paul Goodman was headhunted from his local authority role as an extended services consultant and is employed as a community and income lead. His role is to work with the local community and major employers to open up income streams for the school. He is also taking professional school business management qualifications with the National College.

He pays for his wages and more – much more, says Chris Wheatley. “He makes around £120,000 a year for the school. This represents an additional 10 per cent on top of my current school budget. It puts us in a good position in the current spending climate – it means that the children don’t have to suffer.”

The response at Candleby Lane Primary could be characterised as entrepreneurial. But this businesslike approach puts the needs of its community context at the forefront of considerations.

“It is about entrepreneurialism but it’s also about knowing your school’s context,” Chris says. “My last school was in a wealthy area of Nottingham so it wasn’t about raising aspirations. Parents were involved and wanted to do their bit for the school. But at Cotgrave there was a community to be rebuilt.”

A key element is the school’s alternative curriculum, Candleby Life. A range of local businesses, including Experian, E.ON, Boots, HSBC and Trent Barton Buses are involved in the programme, giving volunteer time in the form of business expertise on revenue generating projects. Examples of these initiatives include selling eggs and milk from a local farm in partnership with the school and renting out a professionally equipped on-site music studio to local bands – with the school getting a cut from sales of the music on the music download service iTunes.

The school hires out its artificial football pitch to local leagues. One league – dubbed by its young offender players as the ‘Asbo league’ – can also claim to reduce crime in the community. “There hasn’t been one recorded crime on the evenings that this league is played,” says Chris Wheatley.

In rural Norfolk school business manager David Allen has achieved significant savings for the Litcham cluster, which is made up of one high school, six primaries and a children’s centre.

As an advanced school business manager (SBM) David’s key aim has been to take the business management responsibilities away from rural headteachers who, because of the small size of their schools, need to devote most of their time to teaching.

But another major benefit has been to identify a range of major savings in the running of the cluster, as well as schemes to generate extra income.

In the first year of his role he delivered almost £100,000 of savings, including £4,500 off the cluster’s water bill – a saving identified and made in an afternoon.

David has some clear advice for schools that are contemplating the new financial year but may not be positioned as well as Litcham and Candleby Lane to handle a tougher budget settlement.

“Before you start thinking about replacing your existing suppliers with new ones stop and think about whether there is room to negotiate with your existing supplier,” he says.

“There may be room for them to move their margins and offer you a better deal, and if there’s no room for manoeuvre on price, then think about the specification of the contract – can you prioritise your cleaning contract so that you maintain the same level of service in key areas but reduce the frequency of cleaning in other areas?”

In the longer term, it’s important for a school to understand its cost base – then resource savings can be made, says David. “You need to understand the factors that determine the costs of your organisation.

“There are four key areas that you need to look at in terms of resource savings. Staffing is the first, making up between 78 to 85 per cent of the cost base. You need to ask yourself what you’re trying to achieve via your curriculum and how you need to configure your school to deliver that. That’s followed by maintenance, energy costs and then ICT.”

Aside from understanding your costs, getting out there and networking with other school business managers is essential, David asserts. As a National College SBM advisor for the area he’s helping to encourage this very aspect, including organising a local conference for the county’s school business managers.

“Look to employ someone who can work in a professional business management or income generation role.”

Income generation is becoming increasingly important to the Litcham cluster’s future. A new dance studio being built for cluster pupils at the high school will also be leased to local groups and organisations. Another important funding stream is grants. The cluster received a £27,000 local authority grant for the high school kitchens, and at least two more grant applications are in the pipeline with more to follow.

Commercial support is another area for development. “We are seriously looking at sponsorship,” says David. “This will become even more important in the future, particularly in the area of capital building projects now that BSF [Building Schools for the Future] has ended.”

There’s already a wealth of support available for leaders who, unlike Chris Wheatley and David Allen, haven’t done long term planning for the next financial year.

Consultants PriceWaterhouseCoopers was commissioned by the National College earlier this year to develop a set of case studies and recommendations for school leaders which is now available.

The report, Efficiencies: helping schools balance the budget. suggests a range of strategies that can be put in place to help schools meet budgeting challenges, including working with other schools to get greater benefits out of professional school business managers, which it says provide an average net benefit of over £88,000 a year to school collaborations.

“The funding available in 2011-12 means that many schools will need to change the way that they have been managing their resources or take a hit on their year-end balances.

“Initiating change now will ensure that schools are ready and can use this challenge as an opportunity to improve performance as well as streamlining working practices,” the report says.

In another report, Securing the best for less: making resources go further, the National College worked with six schools around the country, including Cotgrave Candleby, to understand how they have used their resources well.

Although each school has tailored its response to its particular context, a number of common themes emerged. This included decision-making driven by values, an entrepreneurial culture that brought in additional income and a willingness to challenge established practices and systems.

Chris Wheatley’s most important piece of advice for leaders is to be optimistic and look for opportunities as you prepare your school for the new financial year.

“It’s up to us to find a way of making it work,” he says. “Don’t ask ‘what are we going to do’ but ask ‘how are we going to do it'. It’s about taking risks, being creative and putting your head above the parapet.

“I would certainly encourage leaders who haven’t thought about it already to look to employ someone who can work in a professional business management or income generation role. This gives me freedom to do what I think I’m good at which is running a school and driving progress. My strength is not talking to businesses.

“There is a big talent pool out there full of skilled people who were probably working for your local authority until recently. You need to tap into that talent pool as soon as possible and get them working for you.”