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Online seminar: School business managers working collaboratively

Managing the business aspects of a school is becoming more challenging than ever. Join this seminar on 28 June to find out how you can increase efficiency by collaborating with other schools.

Register for the seminar.

Strategic financial management and budgeting

Strategic financial management and budgeting requires considerable leadership and management skills to link educational objectives with the resources that support them.

Roles and responsibilities

The governing body is responsible for the conduct of the school through promoting high standards of educational achievement. This includes ensuring that the school has robust processes for budget forecasting, setting and management.

The school business manager (SBM) is responsible for making sure that the school’s budget is secure and spent wisely. The SBM must also ensure that all budget holders within the school are included in financial management processes and that they understand their financial responsibilities and have the confidence to fulfil them. The SBM needs to establish and maintain transparent and equitable financial management processes that support teaching and learning.

The budget cycle

As with most planning activities, the budgetary process follows a cycle of activities which feed into one another:

  • planning (also known as forecasting)
  • implementation
  • evaluation
  • review.

Budget planning has become more complex with the emergence of new types of educational organisation with diverse funding streams, spending trends and cultures. The expansion of extended schools, children’s centres, federations, academies, trust schools and school clusters means that the planning process will become even more intricate and essential.

Budget forecasting

Budget forecasting should be an integral part of the wider strategic planning process. It must be linked to curriculum and staffing reviews and the school development plan. It is recommended that the school development plan includes a three-year budget forecast. The overall aim is to ensure the school has the right resources to meet pupils’ needs and support school improvement.

In addition to receiving income from the delegated budget, schools may adopt a proactive approach of attracting funds through other government-driven initiatives.

Multi-year budgets

The government requires schools to spend each year’s funding on its current students. Local authorities have the right to claw back surplus balances from schools.

Multi-year budgeting supports longer-term financial planning by enabling a school to identify whether its resource base is increasing or decreasing and how this relates to its budget balance. It requires the school to consider issues such as whether pupil numbers are rising or falling and whether it will need to undertake major refurbishment projects.

Equity and additionality

Equity is about ensuring fairness and justice when allocating budgets and making financial decisions. You should consider the principles of equity when allocating resources between different age groups, curriculum areas and courses, as well as between pupils with different learning needs and cultural backgrounds.

The concept of additionality refers to the active use of resources to promote social inclusion. Direct funding to support additionality may be ring-fenced and limited to a short period of one to two years.

Further information