Research & Resources Digest July 2017

This edition’s research round-up focuses on the resources available to support schools to become financially more efficient and sustainable, in particular in the context of ongoing uncertainty following the general election about the level of funding that will be available to schools during this parliament. The articles below summarise some of the key guidance from the Department for Education (DfE) and the Education and Skills Funding Agency (ESFA), as well as a couple of recent reports on the subject of school financial sustainability.


Secretary of State announces additional funding and ‘transition’ to National Funding Formula

The Secretary of State has announced (17th July) that the government will maintain per pupil funding in real terms for the next three years. This is as a result of £1.3 billion additional funding being pledged by the government.

The additional funding will be delivered through the National Funding Formula – which will now be introduced through a phased transition between 2018/19 and 2020. The Secretary of State said that:

“This formula settlement 2019/20 will provide at least £4800 per pupil for every secondary school……. The National Fair Formula will therefore provide higher per pupil funding in respect of every school and in every local area……. It remains our intention that a school’s budget should be set on the basis of a single national formula. But a longer transition does make sense to provide the stability for schools.

In 2018/19 and 2019/20 the national funding formula will set indicative budgets for each school and the total schools funding received by each local authority will be allocated according to our national fair funding formula – and transparently for the first time. Local Authorities will then continue to set a local formula to distribute that funding as they do now and for determining individual school’s budgets in 2018/19 and 2019/20 in consultation with schools in that area and I will shortly publish the operational guidelines to allow them to begin that process. To support their planning, in 2018/19 all local authorities will also receive some increase over the amount that they plan to spend on schools and high needs in 2017/18 and we will confirm gains based on that final formula in September.”

Rt Hon Justine Greening, Secretary of State for Education, 17th July 2017

The additional money will be achieved by finding efficiencies in the Department for Education’s existing budget, and will come from areas such as capital spending and spending on free schools.

Financial sustainability of schools – NAO report

 The National Audit Office (NAO) published a report on the financial sustainability of schools in December (2016) ( which suggested that the government’s approach to managing the risks to schools’ financial sustainability could not be judged to be effective or providing value for money until more progress was made. The report stated that the Department for Education (DfE) had not clearly communicated to schools the scale and pace of the savings required and did not know whether schools would achieve them in practice. The report stated that whilst the DfE had developed and published advice and guidance to help schools improve their financial management and achieve efficiency savings, it had not yet completed work to help schools’ crucial procurement and workforce savings. The NAO analysis indicated that while the financial position of primary schools had been relatively stable, there were signs of financial challenges in secondary schools. It also suggested that the Education Funding Agency (now the Education and Skills Funding Agency) should intervene earlier and more often with local authorities when it has financial concerns about maintained schools.


Schools financial health and efficiency

The DfE and ESFA have, since January 2016, been adding information, tools and guidance to their collection on schools financial health and efficiency. These resources include some ‘top tips’ for strategic planning and efficiency in schools ( including achieving value for money from teaching costs and support staff, sharing a skilled financial practitioner with other schools, and considering how schools can maximise their income, selling key skills to other schools and achieving income from other areas such as letting space.

The ESFA has also published guidance providing information for schools on making the most of financial review and self-assessment tools ( They have also produced a video where colleagues from the DfE and WISE Academies discuss some of the themes surrounding schools financial health and efficiency, covering benchmarking, sharing good practice, and the role of school business management within an academy trust (

This section of the DfE website also provides a range of resources on financial management and efficient resourcing, which looks at school workforce planning, strategic financial planning, budgeting with a 3 to 5 year plan, the role of the school business manager, and maintaining good financial health (

There are a range of case studies, providing examples of how schools and academies have developed effective financial management, resulting in better educational outcomes for children and young people, including around strategic financial planning, staffing and timetabling, procurement and back office efficiency savings, skills and tools for managing school finance effectively, and curriculum based planning (

Guidance for governors and trustees

 The DfE and ESFA have produced guidance for school governors and academy trustees, to support them in their key role of ensuring schools manage their finances efficiently. This guidance includes ‘top 10 planning checks for governors’ ( which senior staff in schools and multi-academy trusts will also find useful. The planning checks are:


  • Staff pay as percentage of total expenditure
  • Average teacher costs
  • Pupil to teacher ratio
  • Class sizes
  • Teacher contact ratio
  • Proportion of budget spent on the leadership team
  • 3 to 5 year budget projections
  • Spend per pupil for non-pay expenditure lines compared to similar schools
  • School improvement plan priorities and the relative cost of options
  • List of contracts with costs and renewal dates
Schools’ buying strategy

The Department for Education (DfE) published guidance (20 January) for schools to help them improve how they buy goods and services ( with the aim of supporting schools to save over £1 billion a year by the 2019 to 2020 academic year on non-staff spend. The strategy includes a range of initiatives to support improved schools’ buying, including: access to buyers’ networks and help with more complex buying, practical help and advice on being a smart consumer, and access to better deals and making buying easier.