We believe that finance is an integral part of school leadership, sufficiently important to be considered in a category of its own – school financial leadership. At the highest level, strategic financial leadership involves creating a vision for how the available resources will be used to achieve your school’s aims in the longer term, and then implementing that vision in a way that creates the conditions for sustainable improvement.
Curriculum, staffing and school development plans must be linked to the budget to create an interwoven, mutually compatible set of planning documents. Together, these form a blueprint to drive the school forward.
Setting an example
Leaders also need to model behaviours in relation to finances. This means taking a responsible approach to the use of public money and ensuring proper accountability through compliance with legal requirements. Unfortunately, however, there have been examples of schools and academies making illegal transactions and disregarding conflicts of interest when awarding contracts to people connected to leaders, trustees or governors.
This sort of behaviour undermines the whole education system, and causes significant concern among the majority of school leaders who are upright and honest. Published reports provide some salutary lessons about the ease with which financial regulations can be ignored if governors and senior or middle leaders aren’t watchful enough.
Financial leadership also involves translating the vision into reality, coordinating all the different strands of financial decision-making to achieve value for money across the whole school. That means making sure that when spending the school’s money you’re eliminating waste, being as efficient as possible and targeting resources to activities that have the greatest impact on outcomes. Any comparisons with similar schools should include checks on what they’re spending to achieve their results. If they’re spending less and achieving more for a similar profile of pupils, it’s worth exploring further.
But financial leadership isn’t the sole preserve of headteachers. They undoubtedly set the tone, but it needs a team effort across the whole school, with each member of staff playing their part to create a unified approach. If the team is the orchestra, then the headteacher is the conductor – prompting the different sections when they need to come to the fore, and adjusting the volume to create the right blend.
Financial leadership is crucial in times of uncertainty. It gives confidence to staff, leaders, governors, parents, and funding bodies that the school has a robust approach and is in control of its finances. Staff will be looking for reassurance that their employment isn’t at risk. Whilst no school leader can give a cast iron guarantee of how many staff their school will need in future, strong financial leadership will give staff confidence that the school’s stability is being maintained through forward financial planning and effective use of resources, and that any decisions made are in the best interests of the pupils to meet their changing needs. Maintaining confidence in a school’s viability is also essential for retaining high quality staff.
The budget is the means by which you deliver your vision. If you don’t make provision for the cost of initiatives, they’re unlikely to happen. You’ll also be judged on your ability to achieve expenditure and income broadly in line with the plans outlined in your budget. This is an important measure of accountability to both your governors and the organisation that provides your funding, be that your LA or central government.
Once you’ve mastered the skill of reading a budget you can quickly develop the ability to analyse what’s going on in your school.
If you’re going to set a realistic budget and keep to it, then you’ll need to promote a greater understanding of budget planning and monitoring throughout the school. You might think the budget is only relevant to senior leaders and those with financial responsibilities, but there’s a need for a wider section of the school community to understand it.
The level of information you give to governors and staff – from classroom teachers and TAs through to administrative staff – will depend on their role, but everyone can contribute towards the school achieving a sustainable budget. Whether they’re budget holders or not, all staff are paid from the budget, so the way in which they spend their time can have a big influence on whether value for money is being achieved.
Consider how much of your budget is spent on staff. How you use them is crucial; everyone needs to work at maximum efficiency. Do you, your leadership team and governors know how much it costs per day to run the school? The average cost per hour of all teachers across the school? How much it costs to deliver the average lesson, including classroom support?
Making this sort of cost information widely known among senior colleagues can have quite an impact. Once everyone understands the true cost of staff meetings, it’s surprising how quickly ways can be found to run them more efficiently and allow everyone time to spend on work that has a more direct impact in the classroom.
Engage your senior leaders in creative thinking. They should be advocates for a value for money mindset, encouraging other staff to find ways of achieving savings with the lowest possible negative impact on school improvement. They may be able to act as champions for particular areas of expenditure, tasked with making resources go further. Asking them to record savings achieved on an ongoing basis can be a great motivator.
If every member of staff understands the broad approach being taken to guarantee that the school’s finances are being used wisely, they’ll all be able to work together efficiently and effectively to achieve the school’s aims. Everyone will understand the importance of achieving value for money and can share the responsibility for keeping within budget. Staff should be encouraged to look on the school’s budget as if it’s their own money. In fact, it is their own money, since the funding the school receives is generated from the taxes they pay.
Succession planning for leadership is another reason to raise awareness of finance, not just for your school, but for the education system as a whole. Many aspiring headteachers don’t receive enough financial training before taking up headship and inheriting a multi-million-pound budget.
With the prospect of continuing unfunded cost pressures for many schools over the coming years, it’s essential that future leaders are equipped with the skills they need to ensure that a school stays afloat financially. Existing headteachers will also benefit from taking a fresh look at strategies for financial sustainability. A different leadership toolkit is needed to survive the choppy waters we’re likely to be sailing into.
Julie Cordiner is an education funding specialist; Nikola Flint is a school business leader. This article is based on an extract from their book School Budget Mastery – The Basics and Beyond, available to order from Amazon.