Schools Budget Pressures

This is the keynote topic of our next Forum on 8th October which will be presented by Simon Newland, Assistant Director (Education Access & Provision).  The following update has been issued as pre-reading for your information and in order to give you an opportunity to prepare questions of importance to you and/or your school.  Headteachers are also welcome to this Forum.

Background

It is evident that over the next parliament school budgets will come under considerable pressure. The Schools Budget Medium Term Financial Forecast in Hertfordshire shows a 2.3% reduction in 2016/17 rising to 6.2% in 2019-20. To support schools in preparing to absorb these budgetary reductions, Hertfordshire County Council plans to work with HfL and representatives of Schools on a collaborative project to develop models and tools to ensure that budgets balance. The reality of the extent of the cuts is that a range of measures will be needed to support schools.

The key issues that schools will face with these reductions differ by phase. The greatest challenge in the primary sector will be the viability of smaller schools. Logically smaller schools have smaller budgets, smaller staffing budgets and less flexibility in structures. The reality for small schools with budgets of £0.5m or less having to save £30,000 a year is that they will be unable to sustain their staffing structures and will need to somehow reorganise to ensure a balanced budget. In the secondary sector pressures are likely to be felt most acutely in within sixth form provision. Currently sixth forms in Hertfordshire with fewer than 230 pupils are struggling to remain viable and the funding reductions are likely to increase this number to 250 or more. Thus sixth form provision at smaller secondary schools is likely to become unviable and these schools will somehow need to reorganise their provision.

These challenges will be greatest in smaller secondary schools initially but as the cumulative impact of the reductions builds, all schools will need to consider how they are organised and how they procure goods and services to ensure their budgets balance.

Initial discussions have indicated two areas where the Council and Herts for Learning can work with schools in a drive to improve savings, efficiency and value for money:

1. Efficient Structures. It is evident that a 6% cut cannot be achieved without considering staffing structures. A reduction in funding of this magnitude will necessitate reorganisation in almost all schools. Larger schools are likely to achieve this internally but smaller schools will need to look towards models of collaboration and federation. In the secondary sector the greatest pressure is likely to be on sixth form provision.
2. Value for Money. Whilst driving greater efficiencies in goods and services procured by schools is unlikely to equate to 6%, some level of savings can be realised at all schools. Providing schools with benchmark information on school budgets and useful information around central and national contracts will in many cases enable them to realise better value for money.

Schools that have concerns about their finances can seek advice from their current financial advisers.  It is important that school leaders and governors work closely together to safeguard school budgets in the present time and as far as possible, for the foreseeable future.

For further support and advice, please contact the relevant teams in HfL (Finance, Schools HR, School Effectiveness Teams, Governance; and Catherine Tallis, Senior Officer (Education Access & Provision) Children’s Services, Hertfordshire County Council – 01992 555971, catherine.tallis@hertfordshire.gov.uk.