Published Wednesday 22nd January 2020

General Education for 11-19 year olds – an Industry Sector with an annual income of £90 billion. The UK spends 7% of its GDP on education, making it the biggest spender on education among OECD countries, ensuring that the role of CFO, Bursar, Business or Finance Manager within this sector is a vitally important one. Incumbents in these roles often little have the time, resources or experience to manage each and every cost area together with the added challenges of statutory constraints and demands not faced by those in the private sector.

Education for the 16 to 19 age group, which has been particularly badly hit by austerity in recent years, is set to face a shortfall of £1.1bn pa, despite the Government’s promises on additional funding. Having worked extensively within the Education sector over the past two decades, ERA have seen at first hand the detrimental impact that lack of funding has on teaching and learning in Schools and Multi Academy Trusts particularly on staffing levels, reduced curriculum provision and extra-curricular activities to an extent where teachers have been forced to pay for teaching materials out of their own pockets.

With these sustainability and financial pressures being key issues facing this Sector, ERA has helped many Educational Organisations across the UK reduce costs, improve service delivery and ensure that they are getting best value from their suppliers. However, ours in not just a ’money saving Crusade’ but also a mission to embed a smarter spending culture and to demonstrate that a pound saved elsewhere really is a pound that can then be put to use in the classroom. There are a number of ‘short term’ fixes to improved financial performances that finance leaders might consider the following in the longer term:

The right skill levels

Ensuring that the leadership team has the right skills to manage change and effectively deal with restricted budgets whilst protecting and improving outcomes for pupils is essential. Leaders should be actively engaging in curriculum-based budgeting (which ensures a balance is achieved between provision of a broad and balanced curriculum and reasonable class sizes) in order to optimise School spending.

Making Change

All organisations are able to improve their financial management and performance by critically examining their expenditure. Across all education spending normally 80% of expenditure is on teaching staff and the remaining 20% on other staff costs. These 20% non-employee related expenses can include such areas, but not exclusively, Office/ Classroom Supplies, Copiers, Energy, Water, Waste and Cleaning & Catering.

Tools and Methods

There are some key tools and methods that Schools and MATs could draw on to achieve good financial performance whilst maintaining positive outcomes for pupils. These include curriculum based planning and budgeting and building budgets from zero. Such techniques will help organisations to analyse their staffing levels and core activities and create a staffing structure around them to deliver the best outcomes for pupils whilst maximising the funding available. Schools can and should be optimising value for money by opting for professional procurement advice and through shared procurement routes and maximising income generation through effective use of School facilities.

With mounting financial pressure on schools it is essential for bursars to ensure money is being used as effectively as purpose. It’s hardly surprising that more people are turning to school cost reduction services like Expense Reduction Analysts. Our education specialists can work with your team to give you peace of mind that your budget is being deployed efficiently whilst identifying improvement opportunities that will help to put money back into the classroom where it belongs.

About the Author: Nick Clement, joined ERA after more than twenty five years in the Mailing and Distribution Industry. He began his career as an area sales representative, successfully fulfilling a number of strategic roles culminating in a board appointment after a period working in the company’s European offices in Frankfurt and Berlin.

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