Schools dig into reserves as budgets bite
Schools dig into reserves as budgets bite
The vast majority of England’s schools are digging into their reserves to cover costs, according to a new survey from School Business Services and Supporting Education Group.
The findings emerged from the survey of 428 school leaders, including headteachers, deputy heads, school business managers and finance officers in schools and academies across England, carried out in late 2022.
Nine out of 10 of respondents from academies said they couldn’t see how they will be financially sustainable this financial year or believe they will use up some or all of their reserves. The figure was 99% for local authority-maintained schools.
Worryingly some schools will also be limited in their ability to balance their budgets back to health - the survey revealed that around a fifth of all schools worry about their ability to set and manage their budgets. Factors underpinning these worries include the availability of effective budgeting tools, and staff expertise and experience.
Concerns around budgeting are more than twice as pronounced in the local authority-maintained sector, where schools are more likely to be carrying out budgeting tasks independently and often without support that’s equivalent to what academies can access from central teams. Around 90% of the time, academies in MATs will follow the process and use the tools specified by their MAT.
Unsurprisingly, for 62% of respondents, energy is a priority for cost savings. Teaching assistant and special educational needs headcount and spend, and IT equipment and infrastructure spend were other important areas for cost-reduction, the survey found.
"To say that 2022/23 is a turbulent year in the world of education finance would seem an understatement. The survey was carried out before the Autumn Budget Statement which announced an extra £2.3bn funding for schools."
"Although this is very much welcomed by the sector the additional money will only cushion some of the cost pressures schools now face. Our assessment is that the concerns and pressure points revealed in this survey will not shift significantly."
“Our survey showed a marked difference between academies and local authority-maintained schools in their perceptions of the financial challenges they face. The overall picture is one of continuing concern about future funding and the hard decisions schools are having to make to move their finances onto a sounder footing.
“It’s a small thing to take comfort from, but I was encouraged to see in the survey data that SBS Budgets customers feel about twice as likely to be able to manage their budget to break even this year. We are advising our customers to budget on a 3-5 year basis to allow for a clearer view further down the road, and to use budgeting software like SBS budgets to build scenarios that take account of multiple strategies for boosting revenue and cutting costs. We act as an advisor and critical friend and find that confidence improves when staff are empowered with the information to make important and difficult decisions.”
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