Micon Metcalfe, a School Business Director, shares some tips on where to save money in schools. This is one of the articles in the National Teacher Enquiry Network May Half Term Newsletter (sign up here).
Prompted by yet another newspaper story hinting at school funding cuts in the next Comprehensive Spending Review, I posted a series of tweets with my top financial efficiency tips. I have reproduced these here – with a little more context.
- Know your staff and your salaries. You’d be surprised by errors in an unchecked payroll
This is always one of the first things I do when I start at a new school. My current school employs over 150 staff and I know everyone’s name, role and (broadly), salary. In a previous school, I came across an employee who was paid for 5 days a week yet never worked on a Friday. They’d been given permission some years before to do a college course, had stopped going and never resumed coming back to work. After my tweet, a follower commented that their company had paid a leaver for 2 years before noticing. As I said, you’d be surprised.
Once you know who you employ and for how many hours, you can start to look at how they are deployed and the impact and effectiveness.
- Know your staff absence rate overall and for groups of staff. Know what the local & national rates are and do something if you are above
Our people are our biggest and most precious resource. At my current school the sickness absence rate is just over 1%; the local average is nearer 8%. Even factoring in personal time, it is still below 2.5%. We do our best to make our working environment as good as it can be. This means supportive policies for personal time, good CPD; we run an in-house Masters Programme and support several other staff on external Masters, non-contact time which is above the required minimum (it is never enough). Alongside this, though, is high challenge. We expect excellent attendance and we will follow up and provide support and challenge where attendance falls below expectation. With 100 teachers, reducing absence by 2 days per person, per year could save £36,000 in supply costs.
- Back Office and Site teams. Can you collaborate? Benchmark; are you efficient?
I am frequently surprised at how slow some schools seem to have been in rationalising back office and site services. In part I think it is because we all like to do things slightly differently; there is no ‘set’ job description for a school site manager or admin office. Nevertheless, there are surely efficiency savings to be made. In recent months, our school has been sharing a temp with another local school. We need additional admin capacity whilst we are in the midst of our building programme and they need cover for a long-term sickness absence. Our site team regularly works on a Saturday so we offered key holder services to another school, which meant that they could take on a regular Saturday letting and a neat £9k a year lettings income.
I mentioned benchmarking in tweet number 3 – but I’m going to talk about benchmarking under tweet 8.
- Check Impact. Are TAs, Family Workers, Learning Mentors, having desired impact?
I am genuinely not picking on groups of support staff here. We could apply this to teachers and particular subjects as well (although the national curriculum and the need to provide a broad and balanced education constrains). However, some of the above roles in schools came about initially as a result of ring-fenced grant funding. Some roles also deal with the ‘soft’ side of school support – the impact is hard to measure in results alone. When we review what we do, we should question if a particular intervention is working. In a previous school the Learning Mentor funding had been retained centrally by the LA, who had employed staff and placed them in schools. When the ring-fenced funding ended schools were expected to TUPE the employee onto their payrolls. Most schools did this automatically without considering impact and effectiveness the funded role had. At another school I discovered that one mentor was hardly ever actually seeing any students. Unbelievable – but it seemed it had just been assumed that they were doing their job. My tweets came about because of a story in the Sunday Times headlined ‘230,000 classroom assistants face axe’. This follows (fairly old) research about the efficacy of Teaching Assistants. Schools have autonomy over large budgets. The least we can do is be as sure as we can that we are targeting the majority of our resources (staffing) at things that work.
- Staffing is your main resource. This is where a small saving is quite a lot of money.
I think this is a really important point when discussing school efficiency. On average schools spend between 75-90% of their income on staff; with about 69% on teachers. I recently attended a brilliant talk on funding by Sam Ellis from ASCL. He demonstrated a very simple tool for looking at how tweaks to staffing could mean the difference between a school being in the red or black. Having the right number of staff, teaching the right hours and ensuring an efficient support team is key. I have already discussed the savings an effective staff absence policy can generate.
- Then and only then look at other costs (these are at best 25% of your total spend). Look at your big contracts first. Go to the market.
I can never really quite understand spending a couple of hours trying to squeeze 5p a ream off paper. You have to ask yourself if the cost of 2 hours time and setting up a new supplier on your finance system will be repaid by the savings made on your paper supplies. Of course, if this is a quick win, go for it; otherwise concentrate efforts on the bigger stuff. After staffing, the biggest expenditure is likely to be on ICT, Utilities and Cleaning/Site maintenance. (I won’t go near Capital/Major building works here…). We have been going through a BSF rebuilding programme since December 2010; so we are now 3 financial years on from when we started. We have been unable to tender our cleaning and utilities as our site is literally a moving target and we are transitioning from oil tanks to gas/biomass boilers. Our outside space also bears no resemblance to what we had before. I find this all slightly unsettling – as I have no point of reference for these costs. Without consumption history, it is difficult to get the best prices for gas and electricity. It means we daren’t risk longer-term utility contracts (to fix our costs or take account of market trends). Our cleaning contractor is literally cleaning a different school to that which they tendered for – and I have no answer really when they say they need more hours to keep it clean. We are at the point now where we can start to analyse the incomplete information we have to date and go to market for our cleaning and grounds maintenance. This at least will give us an indication of our future costs.
- Don’t assume that big LA contracts will save you money. But do factor in intangibles like time and expertise. These cost.
The new funding formula is causing changes. In the past, Local Authorities could retain some funding to provide contracts like meals, cleaning and ICT. This money is increasingly devolved to schools and all schools have to agree to ‘de-delegate’ anything. In our Local Authority this has meant the majority of primary schools only finding out the real cost of the school meals contract this April. It had all been dealt with behind the scenes. The authority has also decided to not procure a new group contract – so schools have to form collaborations and procure or seek their own contracts. The time and effort this takes should not be underestimated.
However, schools are also finding that seeking their own services can save money. A direct contract for IT support was less per student than the LA’s recently re-tendered managed service. Well, it was for our school.
Small schools can be at a disadvantage in terms of time, expertise and opportunity to make these sorts of decisions. This is where federation and collaboration might be a way of weathering the funding storm. There is a lot of information on the National College for Teaching and Leadership website about the effectiveness of School Business Managers and their role in the efficiency of Collaborations or Federations and some links are included below. These are not new – there has been a lot of work on efficiency and collaboration for some time now:
- And finally make sure there is someone who takes an almost forensic interest in where the money goes. Chase those pennies too!
This is really important. Know what you spend your money on. I am really interested in School Finance and I also hate waste. Especially wasting of public funds. We have looked at our policies and procedures to make sure that we don’t double or over order things. We don’t waste time on admin intensive systems to recharge things like photocopying to department budgets and we don’t allow overspends unless there is a clear reason. We don’t spend at the end of the financial year for the sake of it. We plan and direct resource where it is needed.
I also like to know how we are doing compared with other schools. The last government introduced Consistent Financial Reporting in maintained schools and schools can access their information and benchmark against similar schools. It is less useful since the conversion of over 50% of secondary schools.
The site for 2011/12-guest login can be accessed here. Schools will be able to log in to their own information.
The current government has started to publish Academy financial information and there are moves to get this into a format that can easily be compared with maintained schools. At present only information for 2010/11 is available; much more useful benchmarking information should become available in the next couple of months as the 2011/12 information will include significantly more converter academies. Still worth a look now, I think.
One final link, The DfE’s Improving Efficiency In Schools. Watch out too for the recent consultation findings.
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