What is financial benchmarking?
Financial benchmarking can be a valuable process as it enables comparisons of income and expenditure with other schools and academies. With this comparison you will then be able to consider how your resources can be used more efficiently and identify areas of improvement that may be required.
Why should you benchmark?
Benchmarking is a requirement for the School Financial Value Standard (SFVS) that all maintained school governors need to complete and the School Resource Management Self Assessment Tool (SRMSAT) for academies, MATs or free schools.
Benchmarking allows you to understand your position and identify areas of strengths & areas to improve.
Areas of expenditure to consider may be:
- Teachers costs
- Support staff costs
- Supplies and services of both educational resources or non-educational resources
- Building maintenance and improvement
IMPORTANT NOTE: Benchmarking is only a guide and if you find yourself at the end of the spectrum, lower or higher than other establishments; you should consider the reasons for this.
Are there special circumstances that would explain your school appearing in the upper or lower quartile? This should be taken into account when comparing to similar educational establishments.
How to benchmark for the best results
When selecting who to compare your data with, you should keep in mind characteristics such as: area, school size and percentage of pupil premium children.
For effective benchmarking it is best to compare yourself with educational establishments whose characteristics are similar. They do not need to be ‘identical’ in order to produce a good comparison.
When evaluating your results, it is best to ask yourself a number of questions such as:
- How does your spending compare with the spending of similar schools and what does that tell you?
- How do these results compare with the results you received last year? Are there any large changes?
- Does your spending relate to your school improvement priorities?
Asking yourself questions like these will help you analyse your data more effectively.
Using the data
Once you have collected and analysed your data, it is best to start planning for the next financial year and how you will tackle the changes and implement any improvements. When doing this you should consider:
- How will you monitor your spending on a regular basis to ensure your finances are being used according to school priorities and stay within the specific budget set?
- How will this benchmarking data help to inform future decision making?
- How will you make these changes to make sure your resources are used to support high-quality teaching and the best outcomes for your pupils?
Remember, the benchmarking comparison will not explain why your establishment has higher or lower expenditure than your comparative establishments, it is to review the differences and identify the reasons for them. Once you have identified the factors that led to the variance from similar schools, you can then discuss and evaluate how resources can be managed more effectively in the future.
If there are any areas where you cannot give a reason for the spending variances in comparison to similar schools, then realistic goals should be made to review spend and make changes.
Benchmarking data is available for schools and academies
Don’t worry if you have completed your SFVS or SRMSAT form already. It is an acceptable response to the benchmarking question to explain that you will complete the benchmarking before the end of the financial year and present it to governors after that.
The following questions are included in the SFVS or SRMSAT which relate to benchmarking:
- Do you benchmark the size of your senior leadership team annually against that of similar schools?
- Do you benchmark your income and expenditure annually against that of similar schools and investigate further where any category appears to be out of line?
You can access the data here: https://schools-financial-benchmarking.service.gov.uk/
If you would like support to complete your financial benchmarking, click the button below to contact us.
