Financial management – and balancing this with school improvement – is something that Jon Wright has significant experience of. His first headship saw him lead his secondary school out of category and deficit and to outstanding within five years.
After 15 years in Lancaster Mr Wright was appointed executive head at Great Sankey High School, an 11 to 18 academy in Warrington, Cheshire, with almost 2,000 students. He became CEO of the Omega multi-academy trust, consisting of Great Sankey and four primary schools, in January.
Mr Wright says that balancing the books and school improvement are inextricably linked: “It’s rare that you will get school improvement without the financial efficiencies to be able to create money to drive that agenda.”
The funding climate was a major driver behind the creation of the MAT, Mr Wright explained. “It should give us economies of scale, for example by giving us more purchasing power, as well as economies through the use of some staff across the trust and common back office services but it takes the best part of three years before the scale provided by a MAT can deliver true savings.
“As an expanding school, we can see financial solvency on the horizon but it is dealing with the couple of years it will take to get to that point. That’s a difficult challenge but my default position with school improvement is that you can’t afford not to do it.”
Understand the finances
Although many heads have the services of a school business manager or financial director it is important they take time to develop a good understanding of finances, Mr Wright advises.
Accounting can seem an arcane world so Mr Wright urges leaders to work with their business managers to make budgets more immediately understandable. Mr Wright’s approach was to work closely with his finance director to break the budget down into basic categories so that it was easier to see where money was allocated and the impact it was having. Working with the finance director, Mr Wright has managed to shave around £250,000 off both the salary and the non-pay aspects of the budget – a saving that will help subsidise his change agenda.
Start from scratch if necessary
When Mr Wright arrived in post, he and his finance director decided to reconfigure the budget from scratch. They identified the large senior leadership team as neither affordable nor sustainable in the current climate.
“That made me go back to basics and look at what we had to spend money on and what we could change. There can be little room for manoeuvre when you take up a new headship so you have to create your own space,” he said. “We signed up to a national buying framework agreement to drive down our costs, for example. If your school is in a big local authority they can do this on your behalf but if your local authority is smaller you are unlikely to benefit in quite the same way so this is a good option to bring down costs.”
Consider generating income
Generating additional income to strengthen the school budget is appealing but this is often easier said than done, according to Mr Wright.
“The current climate presents a paradox, with the government saying there has never been more money in education than now. That may be the case but often it is tied up in pots such as the Strategic School Improvement Fund and the Teaching and Leadership Innovation Fund that you have to bid for.
“That drives you to look at these bids and align yourself to larger groups such as local authorities or Teaching Schools.”
Schools should also look at other funding sources outside traditional government channels, such as local business sponsorship, and be prepared to invest in the services of a bid writer to give them the best shot with funding applications.
Share the responsibility
Mr Wright strongly believes that responsibility for the efficient use of the school budget is wider than just the head and business manager. He advises that every cost centre manager must draw up a plan detailing how their budget will be used – and they are expected to evaluate the impact of their spend.
“We are in the process of training the cost centre managers to understand the accountability that comes with their role,” he explained. He has also introduced a bidding process for surplus cash, in which cost centre managers create a detailed bid that spells out how the money will be used to support students.
Manage the risk
It is important to conduct regular, thorough reviews of the risks that might threaten sound financial management, said Mr Wright.
“We have a risk management process that we started as part of the due diligence process as we prepared to enter the MAT. The register includes everything from educational standards to buildings finance.
“It should consider the implications of every possible risk on your ability to deliver on your strategic school improvement priorities. For example, if you have a dip in standards that might result in a dip in inspection grades, and that might have an impact on student numbers.
“You also have to consider the risks of reducing expenditure that might not seem a priority at the time. I know that some schools will cut marketing budgets because it is over-subscribed, but you need to consider what might happen if, for example, a free school is built on your doorstep.”
- Liam Donnison is managing director of Best Practice Network, a DfE-licensed provider of National Professional Qualifications (NPQs) for school leaders. Jon Wright’s insights form part of the new NPQs, developed and delivered by Outstanding Leaders Partnership and Best Practice Network. Visit www.outstandingleaders.org