Top Tips for Multi-Academy Trust Budget Planning
Here are some top tips and key considerations for multi-academy trusts as they set about budget planning from Rebecca Grange, Executive Director of Operations for Leger Education Trust, a multi-academy trust in Doncaster with secondary, primary, junior and infant schools, and key stage 4 alternative provision.
Academies and multi-academy trusts face considerable challenges when developing the budget plan for the new academic year. The political and economic landscape has been extremely changeable over the last 12 - 18 months, and this has to be kept in mind when planning your academy trust budget.
Financial pressures are increasing for academies and trusts as a result of unfunded/part-funded pay rises for both teaching and support staff, and spiralling energy costs. The Energy Bill Relief Scheme for non-domestic customers - including schools - runs until March 2023 when it is due to be replaced by a less generous support system.
Academies and trusts are always at the forefront of research and innovation associated with delivering the best for the children, and achieving efficiencies will become more important than ever.
Here are some top tips to consider when budget planning:
1. Staff pay as percentage of total expenditure
Staff pay is the single most expensive item in the school budget. It typically represents over 70% of expenditure. The DfE’s schools financial benchmarking service can help with analysis, and you can begin by considering these key questions:
- What is the overall staff cost as a percentage of total income? Staffing costs over 80% of total income are considered high.
- If teaching costs are relatively high, is this due to the number of teachers or a relatively high proportion of highly paid staff?
2. Average teacher cost
This measure is calculated by dividing the total teaching cost by the full-time equivalent (FTE) number of teachers.
Think about the following:
If the average teacher cost is high in comparison with other similar schools, why is this? The schools financial benchmarking service includes staffing cost per teacher (in the ‘expenditure’ section). Is this due to:
- the staffing grade profile, such as a high number of staff on the upper pay scale?
- the responsibilities structure in the school, such as the Teaching and Learning Responsibility (TLR) scale?
- another reason?
- How far is your school using its pay flexibilities – for example, to differentiate pay by teachers’ performance?
3. Pupil-to-teacher ratio (PTR)
The pupil-to-teacher ratio (PTR) is calculated by dividing the number of FTE pupils on roll by the total number of FTE teachers. A relatively low PTR could suggest small class sizes.
As well as benchmarking the PTR, you may want to review the average PTR and pupil to adult (teachers and support staff) ratios in other schools and academies.
The ratio of pupils to all educational staff (including teaching assistants) is also relevant, especially in primary schools. The Education Endowment Foundation evidence found that teaching assistants are a ‘high-cost’ intervention with a mixed impact on pupil education levels, depending upon how they are deployed.
4. Class sizes
The smaller the class size, the greater the cost of delivery per pupil. You should ensure that class size plans are affordable while supporting the best outcomes for pupils. You can also use integrated curriculum and financial planning (ICFP) to plan the best curriculum for pupils with the multi-academy trust funding you have available. It can be used at any phase or type of school.
You may find it helpful to look at the Education Endowment Foundation’s evidence on the impact and costs of reducing class size.
- Do you know the maximum average class size that your school can operate at within the context of the pupil admissions, the structure of the building, the numbers in different year groups and the need for intervention strategies?
5. Teacher contact ratio
This measure is calculated by taking the total number of teaching periods timetabled for all teachers in the school and dividing that by the total possible number of teaching periods (the number of teaching periods in the timetable cycle multiplied by the FTE teachers). All teachers should have a guaranteed minimum of 10% timetabled planning, preparation and assessment (PPA) time. Therefore the teacher contact ratio will always be lower than 1.0.
The Association of School and College Leaders (ASCL) advocates 0.78 as an aspirational target for the ratio, on the basis that this represents approximately 10% of all teacher time in planning and preparation, 10% in management activity and allows a 2% margin.
6. Proportion of budget spent on the leadership team
Schools have many different leadership and management structures, and comparisons are not straightforward. Consider the following:
- How has your school made decisions on the proportion of its budget to be spent on the leadership team?
- If this is relatively high or low compared with similar schools, is this because of the size of the leadership team, or their pay?
7. 3-to-5-year budget projections
You will need to go to your current 3 or 5-year projections and review the assumptions including:
- projected pupil numbers
- free school meal numbers
- likely pupil premium income
- projections for staffing that will be necessary in these years
8. Spend per pupil for non-pay expenditure lines compared to similar schools
The schools financial benchmarking service will allow you to compare your school’s pattern of expenditure with similar schools. I encourage you to explore opportunities for collaborating.
9. School improvement plan priorities and the relative cost of options
The budgetary process sits firmly within the strategic leadership framework and should link into the overall management and planning cycle.
- Are school improvement initiatives prioritised, costed, and linked to the budget?
10. List of contracts with costs and renewal dates
Each year, your school must review its contracts for all of its services to check which ones are due for renewal. Check that contracts are good value for money (VFM) and meet the school’s needs.
11. Use the ICFP tool
The integrated curriculum and financial planning (ICFP) tool can be used to support your budget planning. The smaller the class size, the greater the cost of delivery per pupil. You should ensure that class size plans are affordable while supporting the best outcomes for pupils. You can also use ICFP to plan the best curriculum for pupils with the funding you have available. It can be used by any phase or type of school.
You may find it helpful to look at the Education Endowment Foundation’s evidence on the impact and costs of reducing class size.
Think about teacher deployment and timetabling, how support staff are deployed and whether it is effective.
You also have non-staff costs to add into your budget. You need to get the right people involved and gain insight and information from stakeholders.
If you’re not using the ICFP, look at the priorities in your school improvement plan. Cost these out, get quotes, tenders, value for money, look at dates of contracts and services. Consider efficiencies – do you really need to make a purchase? Will it be used effectively? Check the notice periods and make sure your contract register is up to date so that you don’t inadvertently buy again if you don't need it.
In summary we need to be mindful of the political, financial and education landscape in which we are operating as this affects our assumptions, as well as the solutions to our challenges. We need to be a flexible as possible to the unknown changes that may come.
Explore our webinar Budget Planning and Preparation: Innovative Ways to Maximise Resources | MATs for further advice and practical guidance.