Using our SFS tools: A real life experience
As part of the team that developed the book and toolkit ‘A Helping Hand to Secure a Sustainable Budget’, I have found myself in the perfect position to develop a financial sustainability plan (FSP) for my school, well in advance of the implementation of the national funding formula (NFF).
Using the tools has allowed me to predict a range of funding scenarios that my school may face over the next five years, but as well as this the process of creating an FSP and presenting this to governors and senior leaders has enabled us to build a shared vision, a culture of financial efficiency and effectiveness and outstanding financial leadership.
I have been lucky in my career in that I have always worked with forward thinking Headteachers who ‘get it’ when it comes to school funding and financial management. Whilst the role of a school business manager can sometimes feel like a lonely place, I have always known I have had the full support and understanding of the Headteacher, regardless of the financial position I was presenting.
In more recent years I have seen the senior leaders I work beside change and evolve. We are a dynamic and enthusiastic team with a complete range of backgrounds and skillsets and we all have different starting points when it comes to financial management. To truly achieve outstanding financial leadership for my school, I have strived to ensure that all senior leaders and governors share:
- A meaningful awareness of the school’s current financial position
- A sound understanding of how the budget links to the school development plan and is an integral part of the school improvement planning cycle
- An overview of future financial planning and how this impacts on the school’s direction and education provision
Our approach at Acklam Grange School:
Back to basics:
The first step is hopefully an approach that most schools are already very comfortable with. Ensuring systems, processes and procedures are strong and robust and that there is an internal control environment that is at least good are the first building blocks to outstanding financial leadership. Acklam Grange has developed all of these with a strong internal control environment and a recognition from audit, consistently achieving the highest levels of financial assurance over the last two decades.
But financial leadership is not just about systems and procedures, it is about people and the culture in which those people work and thrive as leaders themselves. We have developed a strong finance team who perceive their role to be as much about the education of other stakeholders as it is about their own practice. Leadership prevails at all levels ensuring that there is capacity at senior leadership level for considered future financial planning which positively and proactively drives school improvement.
Future Financial Planning:
Any school leader who has recently been involved in future financial planning will appreciate the size of the challenge. Whereas in previous years it may have been possible to make meaningful and fairly accurate estimates at predicted funding at least three years in advance, this has become increasingly difficult, if not impossible, with the way that school funding has changed.
Changes to school funding:
Schools are fast paced environments where change is constant and this is nothing new. I have worked with school leaders across my career who have told me about the cycle of change from decades ago and their journey of school leadership was just as fraught with new initiatives and government driven policy as ours is today.
Yet the uncertainties we face today in the world of school finance appear unprecedented and seem insurmountable at times. Many people agree with the principles of introducing a national funding formula to create a fairer distribution of funding across schools nationally, but without an additional and substantial injection of funding from the government how can this be implemented wisely and without severe financial turbulence?
The reality is that there will be some degree of financial turbulence for some schools and at the time of writing this post, our school feels as externally vulnerable as the next. So how can schools undertake meaningful future financial planning in times of such uncertainty and change?
Using the book and toolkit:
This is where the book and toolkit come into play. Firstly, the book is informative and guides any school leader or governor or any other interested party, step by step through the maze and mist of school funding changes schools currently face. We have aimed to simplify what can be a very complex area and make it accessible to all. The book has been read by several senior leaders at Acklam Grange School with each person gaining fundamental knowledge and insight into school funding and the subsequent changes, but also taking away something additional from it which is useful and supportive to them in their individual and specific role.
The toolkit comes in the form of downloadable workbooks which are set up for your school’s data input and are pre-populated as far as possible. The book talks you through the process of completion across a series of activities. This means it doesn’t have to be completed in one sitting and you can return to each activity however frequently suits your circumstances. At School Financial Success, we envisage this part will be undertaken by a School Business Manager, or equivalent, but this may vary from school to school. Again, the activities have been designed to be as simple as possible and accessible to all. We have also developed an online course which talks you through how to complete the activities with on screen demonstrations if you prefer this method. This also speeds up the process of completion so is useful for those who need to use their time as efficiently as possible.
Creating a Financial Sustainability Plan:
Ultimately the activities throughout the book lead to the development of your school’s personalised Financial Sustainability Plan (FSP). The FSP itself is easy to pull together as it is largely made up of the completed activities with an introduction and explanation of what you’ve done already written for you. At the heart of the plan are four multi-year budget projections offering a range of potential future funding scenarios mapped against your expected expenditure. The thought of creating four multi-year budget projections might sound at first like a lot of hard work, but it isn’t. The variations to the funding for each plan are taken directly from your completed activities and the expenditure that you are projecting is very similar across of each of the plans with some minor variations as you consider the impact of falling or increasing pupil numbers. You can explain any assumptions you have made as part of your interpretation of the plans.
Possibly the most important part of the FSP is the action plan. This is personalised to your school but the step by step instructions and template provided mean it is should flow very naturally from your previous work throughout the book. The action plan requires discussion and agreement amongst leaders and governors and it is the part of the FSP that you must ensure is dynamic. Don’t just put it on the shelf and forget about it. I have found being able to use this action plan and refer to it on a regular basis as part of our overall school improvement planning extremely useful and elements of it are even written into key staff’s professional development objectives.
Having completed the initial FSP for Acklam Grange School in June 2016 I have also experienced, in the autumn term 2016, the practicalities of updating it. In the design process, we wanted to ensure that this would not be an onerous task because we feel it should be a document that is regularly updated and kept at the forefront of the school improvement planning process with senior leaders and with governors. In practice this is exactly what has been achieved, and my first-hand experience as a user of the toolkit is that it can be easily updated as part of my routine cycle for reporting to governors. My saved version of the workbooks acted as my starting point for the next update. By saving another copy I have made sure I can always return to the snapshot in time that each FSP represents and update a working document which becomes the next FSP when complete.
Updates for me in the second half of the 2016 calendar year included the government’s announcement that the NFF would be delayed until 2018/19 with a confirmed MFG of -1.5% for 2017/18. As you can imagine this had a significant effect on my budget projections. As more information about the NFF is clarified, throughout the second stage consultation and leading up to implementation, my FSP will be updated continuously to reflect the new externally driven information. My spring term update will obviously include new information from the Stage 2 consultation and I also need to keep an eye on any internally driven changes, such as potential changes to staffing levels or other changes to spending pressures.
Even though the recent publication of the second stage consultation for the NFF made me feel quite nervous about what the future holds for school funding, the fact that I have a ready-made FSP for my school which is so detailed and so easy to update has given me a sense of calm and purposeful direction which will help me and my senior colleagues to make the right decisions to ensure the best possible use of our school’s resources.
New information from the second stage NFF consultation release 14th December 2016
With the release of the second stage consultation on the NFF came more information, still more uncertainty and some indicative figures in the form of illustrative allocations for individual schools. It sounds great doesn’t it, finally schools can have a chance to see how they may be affected in April 2018. However, these illustrations are only INDICATIVE and come with a serious health warning if they are not properly understood.
The dangers of using these indicative figures in isolation, either solely with your own financial planning software or with your own spreadsheets are listed below:
- They are for consultation purposes only and could change.
- Actual values depend on the October 2017 census; these values use October 2015 data.
- Your data is proportionate to the national total and may rise or fall or data elsewhere does the opposite.
- Before 2019/20 LAs will still operate a local formula, who may choose to work towards the NFF but don’t have to before this date.
- The illustrations do not span 5 years, the medium term financial strategy that schools should be working towards. A general election could bring about significant change and affordability will be reassessed each year.
- The High Needs consultation allows schools to move money from the Schools Block to address pressures in SEND. This could affect the amount of money available for the formula in different areas up to March 2019. You need to use your own local knowledge and adjust for the likelihood of this happening.
- Relying on one set of figures from DfE is not advisable – you need a back-up plan.
The safest way to use the new information, and any indicative figures you may have acquired for your individual school, is to use them with our ‘Secure a Sustainable Budget’ toolkit and input them into one of your funding scenarios. That way you can see how that ‘potential’ level of funding would look against your planned budget expenditure and how it looks against a range of scenarios you are predicting. You can then continue to update the information very easily when more information is released and future funding for your school is confirmed.
Presenting the plan, building the culture
With any presentation, it is important to think about your audience and try to pitch at a level that matches their knowledge and experience. Going too fast and brushing over important details that people need to understand will leave them confused and lost. Going too slow and labouring over details they are already comfortable with will lose their interest and your important message will, again, be lost. In my personal experience, I presented the FSP to senior leaders and to governors and it is likely that the same would be true in any school. We all know there is an eclectic mix of financial understanding and experience amongst both these teams, so how can we get it right?
Amongst senior leaders there may be some who feel that finance is ‘someone else’s job’, which is understandable given the complexities and uncertainty, so levels of interest and motivation to get involved may be low for some. With governors, this should be less likely, particularly if the plan is presented to the Finance Committee, or equivalent.
It can also be daunting to present a plan which may be painting a negative picture for the future and in the current climate of school funding, some or all scenarios in the FSP may do just that. It is important to remember, and to stress to your senior leaders and governors, that by preparing, sharing and discussing the FSP you are putting your school in the best possible position to deal with any funding scenario that you may be faced with giving you all time to respond positively and proactively to protect and build on the quality of the education service you provide for your students.
I have been very lucky with both teams, in that the interest and motivation is already there. I feel this is largely due to the Acklam Grange approach where financial management is transparent and financial leadership is the responsibility of all leaders in the school. We have built this culture over time through regular updates and sharing of information and most importantly contextualising that information to show how it impacts on the students’ experience and the day to day roles of staff in our school. Leaders also understand how their actions impact on the whole school financial position.
When presenting the FSP the information is all there in the plan for the audience to read for themselves. The question is, how much guidance and support is needed for every individual to understand the message, the implications and the actions going forward. We’ve designed the FSP to make it as clear and simple as possible.
The most efficient way to present the FSP and make the best use of meeting time is to issue it in advance for teams to read and then spend time in the meeting discussing it, its implications and the actions that are going to come from it. This is of course, what should happen in all governors’ meetings, but how often is the same approach used for senior leaders?
If you’re not confident your teams will read the plan in advance or that they’ll fully understand it, you may need to spend more time on your explanation during the meeting. One way is to ask them, when you issue the pre-reading, to let you know after they’ve read it if there are any areas they are unclear on. You can then focus more time on any areas that many people need further support with or even offer a one to one session if you think that would be more appropriate.
My approach, with senior leaders and governors, has been to talk through the FSP in detail the first time it is presented. For some, this is a mind switch to their usual leadership thinking so a careful initial delivery provided a launch platform for the FSP to become a dynamic planning document which we could re-visit more briefly in future meetings. Once I was presenting an updated version, it was simply a matter of summarising the changes and using the meeting time to ensure we were all on course with the action plan. This was also an opportunity to direct and re-direct colleagues if needed.
I spoke earlier about the culture we have built at Acklam Grange School. To me, building a culture is about getting buy-in from the top down; governors, senior leaders, middle leaders and eventually all staff and all stakeholders singing from the same hymn sheet. If you’re trying to improve your school’s value for money culture and reduce waste, introducing the FSP is a great starting point and a great driver for change. The multi-year budget projections offer the reason ‘why’ the change is needed, whilst the action plan demonstrates what the change needs to be and how it will be achieved. Importantly, if you can get your teams to contribute to the action plan it will not only confirm their understanding of the process but also creates an ownership and responsibility for financial leadership which is an essential component of building your school culture.
It is an interesting position to be part of the SFS design team for this book and toolkit and being able to experience putting it together and using it first hand in a real-life environment. At SFS we envisaged that this would be a fantastic support to school leaders to be able to communicate a vision and devise an action plan which would support financial sustainability into the future. As a practitioner and an end user of the book and toolkit, I can absolutely confirm that the FSP does that and more.
At Acklam Grange this important planning tool is integral to our school improvement planning. It is updated termly and presented to senior leaders and governors to ensure financial planning and use of resources stays at the forefront of our school’s leadership. It positively and proactively informs the decisions we make.
We are already committed to ensuring value for money education across the board and have a strong track record of doing so. Now we are also in the best possible position to ensure that we continue to provide the highest quality of education to our students, whatever financial challenges are thrown at us. Sustainable leadership, sustainable budgets, sustainable results!
If you are interested in reading our e-book, using our toolkit and building your own Financial Sustainability Plan for your school, visit our website at www.schoolfinancialsuccess.com
If you want to find out more about what we do at Acklam Grange School visit us at www.acklamgrange.org.uk #AGSPride