Staff engagement for financial success
Our previous two blog posts have considered the issue of value for money. On October 3rd, in ‘Value for Money Education’ we suggested a series of specific questions you can ask yourself, to check if you are allocating your resources well. On October 17th our post ‘In Search of School Efficiency’ looked at what DfE’s expectations are of schools, and analysed some of the tools that are available to support you through the Department’s School Financial Health and Efficiency programme. This post continues the theme, specifically considering the importance of school leaders engaging staff to support a value for money culture and the financial success of their school, regardless of its financial position.
In the recent TES article “Academy trust asks teachers for ideas on how to clear deficit” the trustees and management of The Ridings’ Federation of Academies were criticised by NASUWT for putting staff in this position. A national executive member of the union said that “asking staff where they could make cuts is not appropriate. People are worried about their jobs. “
The financial position of this trust was a projected deficit for August 2017 of approximately £1m. A statement on the trust’s website clarified that this was a projection and that the trust was working hard to prevent this from becoming a reality.
Read the full article here https://www.tes.com/news/school-news/breaking-news/academy-trust-asks-teachers-ideas-how-clear-deficit.
So were the leaders of this trust too honest? Should they have kept this potentially catastrophic situation quiet from staff? How should schools achieve transparency without detrimentally affecting staff morale and chances of finding and securing talented staff in the future?
It is clear from the statement on the trust’s website that its intentions were not to cause distress and worry to staff but to “facilitate a collaborative approach to seek the best outcome in the circumstances”.
So how can a situation such as this be dealt with, and is this something other schools can learn from?
It is becoming more and more likely that schools could find themselves in the position of the academy featured in that article, i.e. projecting a deficit, either for the current year or for future years. The current situation for many schools is increasing costs, particularly staffing costs and either decreasing or static funding. Even static funding represents a reduction in real terms when costs are increasing. Future funding remains uncertain due to the planned introduction of a National Funding Formula, making it difficult for schools to project budgets beyond 2016/17.
Our School Financial Success publication ‘A Helping Hand to Secure a Sustainable Budget’ offers advice, guidance and a unique toolkit to enable schools to predict a range of scenarios for the next five years tailored to their own school. We also offer detailed advice on what to do if those projections are not as favourable as you would like. For some schools, future financial projections could be very worrying. Is it appropriate for this information to be shared amongst the school’s stakeholders, and if so, how should leaders communicate it?
We believe that the key to school financial success lies in outstanding financial leadership. For school leaders this means:
- always being transparent and compliant in all areas of financial management
- being accountable to the governing body/board of trustees
- planning ahead early to avoid unexpected surprises and enable strategic plans to be formulated in a calm and considered manner
- implementing actions which have minimal negative impact on student outcomes
- clear communication with staff if and when appropriate
In extreme cases of financial shortfall, the only solution may be a financially driven curriculum review which leads to staffing reductions. Planning ahead early should allow stages of consideration before this point. Any school projecting a deficit now or in the future will naturally want to make financial efficiencies across as many non-pay areas of the budget as possible, to protect staffing levels. At some points, it may be appropriate and even necessary to communicate with staff in order to make such financial efficiencies. It is common sense to want to eliminate any ‘waste’ from operational budgets before embarking on anything more serious which impacts on the school’s most valuable resource, its staffing, unless of course staffing structures indicate clear and significant areas of overstaffing.
So how can school leaders have open and honest conversations about the school’s financial position with staff, without causing distress and worry over job security and without putting at risk its chances of retaining good and outstanding staff and recruiting new talented staff?
Staff at all levels need to understand what we mean by a value for money culture. There is a common misconception that this means always going for the cheapest option and saving money wherever possible. Terms like ‘cuts’ and ‘savings’ tend to feature in many people’s description of value for money. But what we really mean by value for money is ensuring that school funding is spent wisely in order to have maximum positive impact on student outcomes. If it isn’t effective, then why is it needed?
In order to achieve value for money there are several stages that school leaders and finance staff should follow. It is the same model we featured in our last blog post ‘In Search of School Financial Health and Efficiency’.
The wider staff do not need to know and understand every level of this model. They simply need to understand that any spending of school money must impact positively on student outcomes in order for it to be considered good value for money.
So for example, if £10,000 (cost) was proposed to be spent (input) on some curriculum content resources, it would be expected that this resource would enable a significant number of pupils to access many aspects of the curriculum (output). In turn the fact they had the opportunity to use this resource to aid their learning across the curriculum would contribute to increased student outcomes in the way of ‘results’ as well as potentially to the development of their character, citizenship and social action. These outcomes could then be measured.
If a smaller amount, say £100 (cost) was proposed to be spent (input) on IT equipment, it would be expected that this would support learners and/or teachers in their classroom activities (output). This relatively small amount of equipment may not reach as many pupils as £10,000-worth of curriculum content resource in the example above, in which case the output may be lower, but the impact on pupil outcomes may be just as high in terms of its effectiveness.
An even simpler way of communicating the ‘Value for Money’ approach to school spending and embedding the culture you want to see in your school is to focus on wasted resources. The principles are exactly the same as in the examples above, but perhaps this is coming at it in a way most people will understand, because we have to manage our own personal finances and we would not expect to pay for our weekly shop and leave with an empty trolley.
Schools can be places where resources are wasted on a regular basis. Some extra time spent analysing your spending patterns in detail should highlight any areas where there may be a significant waste of resources and the time you spend doing this now could save you financially in the future. Financial benchmarking may give you some pointers as to where there could be problems. The hardest part of efficiency exercises such as this is not identifying the area of waste but rather changing the embedded culture amongst staff to one of value for money awareness, reduced or no waste and spending vigilance.
If you can highlight to staff how much money is being wasted in a particular area and how that money could be used more wisely you may be surprised how quickly you can get staff on board. Avoid apportioning blame for previous spending history; remember you are trying to motivate staff to want to work collaboratively to improve spending patterns, not to feel that they are being criticised.
Try to use examples that you know will strike a chord with your audience. If a team or department is being wasteful with one type of resource, demonstrate to them how much is being wasted in monetary terms and what this equates to in something you know that they will value more highly, i.e. an additional staff member or additional IT equipment.
Of course, there are some circumstances in schools where projected deficits are so significant that it is inevitable that staffing reductions will be necessary. When this is the case, there are some basic principles which school leaders should follow to ensure sound financial and HR stewardship and avoid or minimise any detrimental impact on pupil outcomes.
Firstly, school leaders should plan far in advance so that staffing reductions can be tackled as early as possible. This allows not only for compliance with policy for such things as consultation length but also allows for thorough planning linking all decisions to the school’s vision, development plan, staffing plan and curriculum plan as well as the school’s financial projections.
High quality HR advice is essential in any staffing reduction process. This again ensures compliance with policy and process and can also help to bridge communications with unions, an essential part of a successful staff reduction strategy. Information provided by school leaders to unions and staff members should be clear, transparent and timely, with opportunities for questions and two-way communication throughout the consultation period.
It should be clear in the communication to staff members that measures are being taken to try to avoid compulsory redundancy situations for staff where possible. These measures may include asking for volunteers and welcoming suggestions for job share, part-time working and other creative solutions where appropriate. Suggestions are not guaranteed to be accepted as school leaders will always have to ensure that solutions support the school’s vision and priorities for improvement, but suggestions should be genuinely considered. Any reasons for rejection should also be communicated clearly and transparently to staff members and unions involved.
These are some suggestions for approaching a staffing reduction if this is unavoidable for your school and some tips for how to engage staff and get staff on board with financial efficiencies across non-pay budgets.
Your staff are a fantastic resource in so many ways. Their contribution may be extremely valuable, if sought in the right way. As specialist practitioners in your school, their ideas may help you to ensure that school funding is spent wisely and resources are used efficiently and effectively. In turn this may help you to avoid the need for staffing reductions, supporting you to maintain a high quality and highly motivated staff team. Where staffing reductions are unavoidable, you will at least be confident that you are allocating all resources in the best way possible, and that your decisions are the right decisions in order to give the young people in your care the best possible chances of success.
So perhaps school leaders should not be asking staff to come up with creative ways to make cuts or save money at times of projected financial turmoil, but instead staff in all schools should be engaged and encouraged to support a culture of value for money education and achieve financial success all of the time.