Achieving Efficiency Savings for Schools

In the wake of rising costs and targeted funding increases, the Government are "setting a 2% productivity, efficiency and savings target for all departments to meet next year" as part of the Autumn 2024 Budget. 

This saving target will include the Department for Education and influence funding allocation to schools in the future. For example, the School Teachers’ Review Body (STRB) has recommended a 2.8% teacher pay award for the 2025/26 academic year.  The DfE have said,

"Schools will be expected to fund this pay award from the additional investment provided at the Budget, alongside their existing funds. For many schools this will mean reprioritising some of their budget – to go towards new pay costs as well as more generally ensuring best value from overall resources." - Teacher pay: what does the pay evidence mean for schools?

Achieving these savings requires strategic planning, innovative thinking, and the right tools. This article outlines practical steps schools can take to meet this challenge, focusing on key areas for savings and potential income streams. We’ll also explore how SBS Financial Planner supports schools in this critical mission.

For a detailed look at budgeting challenges and opportunities in the 2024/25 academic year, see our article on managing budgets effectively.

What Does 2% Efficiency Look Like for Schools?

For most schools, 2% efficiency savings represent a significant portion of their operational budget. Schools are encouraged to focus on:

• Cutting non-essential costs
• Streamlining processes
• Maximising income opportunities

This requirement, though ambitious, aligns with government priorities for maintaining high-quality education while using resources prudently.

Steps to Achieve 2% Efficiency Savings

1. Review Staffing Costs

Staffing costs often account for the largest portion of a school’s budget, making it a crucial area to address. Schools can explore strategies to manage these costs without compromising the quality of education:

• Apprenticeships and Training Initiatives:
  

  Utilise apprenticeships and flexi-job apprenticeships to develop in-house talent and reduce recruitment costs for teachers, TAs, admin staff, or finance roles. Their training will be partially or fully funded through the Apprenticeship Levy and staff costs may be lower during training. Employers may not need to pay Class 1 National Insurance contributions for an apprentice under 25.

• Recruitment Services vs. Internal Recruitment:
  Instead of managing recruitment internally, which can be time-consuming and costly, consider using external recruitment services. Partnering with specialised providers ensures access to a wider talent pool and reduces the administrative burden.
• Staff Utilisation Reviews:
  Regularly review timetables, workloads, and roles to ensure staffing is aligned with current needs.

Managing Staffing Costs in the Context of Falling Pupil Numbers

Balancing Staff Ratios with Enrolment
Falling pupil numbers add further complexity to managing staffing costs. Schools need to:

• Review Staffing Needs: Regularly evaluate class sizes and staff-to-pupil ratios to ensure they match reduced enrolment without compromising quality
• Plan for Future Scenarios: Use financial modelling tools to prepare for potential declines in funding and plan staffing reductions strategically, avoiding sudden cuts

2. Review Operational Costs

Examine all aspects of expenditure to identify areas where savings can be made:

• Energy Efficiency: Implement energy-saving measures such as LED lighting, efficient heating systems, or renewable energy options
• Procurement: Review supplier contracts to negotiate better deals or consolidate purchases

3. Explore Income Streams

Boosting revenue is another effective way to achieve efficiency savings. Consider:

• Letting School Facilities: Rent out halls, sports facilities, or classrooms to local groups or businesses
• Community Partnerships: Collaborate with local organisations to sponsor school events or initiatives

Revisiting Income Streams in Light of Falling Pupil Numbers

Schools with declining pupil numbers can offset funding reductions by exploring new revenue streams. For instance:

• Facility Lettings: Maximise income by renting out unused spaces, which may become more available due to reduced enrolment
• Shared Resources: Collaborate with other schools or MATs to share facilities, services, and resources, reducing individual costs

4. Invest in Technology for Long-term Gains

Adopting technology can drive efficiencies and reduce costs over time:

• Use digital tools for administrative tasks to reduce paperwork and manual errors
• Leverage data management systems for insights into spending and resource allocation

How SBS Financial Planner Can Help

Achieving efficiency savings requires precise financial planning and analysis. SBS Financial Planner is designed to help schools:

• Identify Savings: Use scenario planning to model the impact of cost-cutting measures
• Track Progress: Monitor the implementation of savings initiatives to ensure targets are met
• Maximise Resources: Allocate budgets strategically to avoid waste
• Streamline Reporting: Produce reports that demonstrate compliance with efficiency expectations

Meeting the government’s 2% efficiency savings target is a challenge, but it’s also an opportunity for schools to innovate and optimise their resources. By focusing on staffing strategies, cost reduction, exploring income streams, and leveraging tools like SBS Financial Planner, schools can achieve their goals while continuing to provide excellent education.

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