Pupil numbers across schools in England are falling and with them funding for state-funded schools. The number of pupils in state-funded primary and secondary schools is projected to fall by an average of 1% per year over the medium term, down from a peak of 7.57 million in 2022/23 to 7.14 million in 2028/29.
One London borough council has taken a proactive approach to recognising the challenges this creates for schools including budgetary pressures.
We supported the council in undertaking a series of reviews in many schools, identifying options to reduce the risk of deficit budgets. On average, the reviews found savings of 7% on school revenue budgets, with the highest being 17%.
Average annual recurrent savings of over £600,000 were identified
Pilot project
The team, which included school improvement specialists and financial and technology expertise to gain a holistic view, kicked off with a pilot project focusing on a small number of schools that were collectively projecting significant deficits in the short and medium term.
At the conclusion of the review, average annual recurrent savings of over £600,000 were identified. In all cases, the savings brought the school back into a financially viable position.
The review, which comprised desktop analysis and discussions with school leadership, focused on ways the schools could re-allocate resources while remaining sustainable and high-performing. The nature of school budgets means particular attention is paid to staffing (as in many schools it accounts for 80% or more of spend), and how it can be better utilised.
Steps to savings
This was the right balance of challenge and listening to individual school needs. It comprised the following steps:
- introductory meeting, establishing the starting point, context, process, expectations and timelines
- data request, collecting crucial information such as pupil numbers, funding including for special educational needs, three-year budgets and technology information
- desktop analysis, conducted by advisers and focusing on key budget areas
- review meeting, allowing consultants to present primary lines of enquiry, test assumptions and seek further context, providing schools with insights into potential savings
- published report, combining data and expertise into actionable recommendations, financial projections for three years, and a detailed list of potential savings
- follow-up meeting, offering additional support for implementing recommendations.
The recommendations will often challenge the status quo and practice in schools
There are seldom any ‘easy’ savings to be made. The recommendations will often challenge the status quo and practice in schools, and they will almost certainly be challenging to implement. Examples of recommendations made include ensuring that support staff deployment models match pupil needs; making device purchasing decisions based on end-user needs; reviewing leadership and teaching models to match the size and complexity of the school; and, in some cases, reviewing published admissions numbers and class structure to match available resourcing levels.
But for accountants and financial professionals working with educational institutions, the above model offers valuable insights and could serve as a blueprint for other local authorities and educational bodies striving to secure their financial future amid a landscape of changing demographics and budget constraints.
