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Responses to financial pressures

Finance

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Top takeaway

Schools and trusts are responding to financial pressures in a variety of ways, including closer cost controls, increased income generation activities, and looking strategically at curriculum planning and staffing. 

More detail

The purpose of the Schools' responses to financial pressures 2023 research was to collect reliable information about the impacts of financial pressures on schools. LA maintained schools and trusts were invited to take part in the survey, and a representative sample took part in qualitative interviews. 

Budget priorities

When budget setting, the top priorities for school were:

  • staff pay
  • supporting students with EHCPs and pupils with SEND
  • buildings and premises.

When schools were asked in what ways they had altered provision for the upcoming academic year compared to the previous year, protecting a broad and balanced curriculum was a priority. 

Factors affecting depth of impact

Primary schools reported a more negative picture of financial heath than secondary schools and were more likely to report decreases in provision, including in numbers of specialist teachers, additional classroom support and school trips. 

Pressures related to SEND funding were also a particular issue for primary schools, with more pupils presenting with increasingly complex needs, and reduced support from outside agencies. 

Factors exacerbating financial pressure included:

  • being a small school
  • having older buildings
  • falling rolls
  • rural location
  • high numbers of pupils with SEND. 

Protective factors for more financially secure schools included:

  • accumulated reserves
  • large school size
  • pupil numbers increasing
  • new school buildings.

Inflation-driven increases in costs, especially for staffing and energy, were particular areas of concern, with staffing and energy costs taking up an increased proportion of school budgets.

Lessons learned

When asked about lessons learned that would be useful to share with other schools, three main themes emerged:

  • strong financial controls at senior level but with decision making taking place in collaboration with colleagues 
  • maintaining a strategic focus despite the financial pressures 
  • maximising additional income generating opportunities. 

Examples of strong financial controls might be using integrated curriculum finance planning (ICFP) tools to inform planning; tracking and always knowing what contracts are up for renewal to prevent automatic renewals. 

In terms of strategic focus, examples included schools that had benefited from overstaffing, with additional capacity built into a curriculum led staffing model. This enabled the schools to reduce the use of supply staff, and led to reduced staff absence, with reduced workload pressures. Two schools had been able to get rid of absence insurance cover as a result. 

See page 61 for a case study of a secondary LA school which is introducing a flexible working policy based on teachers working a four-day week (paid for five days). The school anticipates savings from supply cover, agency fees and recruitment advertising costs: 

The head teacher, from professional experience, was finding that this flexible working approach was proving a more attractive retention and recruitment approach than salary increments to prevent teachers from leaving or when negotiating pay with new members of staff. 

Ways in which schools were increasing income generation activities included:

  • grant applications
  • requesting donations from parents
  • charges for wraparound care
  • letting out of school buildings/premises to other groups and businesses.

Questions for reflection and action

  • Do your experiences of financial pressures in your setting chime with the report findings? 
  • How at risk do you feel from financial pressures this year? Can you see ways within your control to alleviate those pressures?
  • Is your setting increasing income generation efforts? Is this proving fruitful? Are there new strategies you will be trying in the coming year? 
  • Are you looking at flexible working as a way of supporting recruitment and retention? What factors are most important for your staff when making decisions about whether to stay or go? 

Reading and resources

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