Education finance experts, SAAF Education, have years of experience helping schools, academies and MATs manage their budgets effectively. In this blog, we share the steps to planning and managing your school budget!
With the new academy financial year impending, you may be focused on end-of-year financial administration and putting a plan in place for budget spend.
Allocating and managing your budget can be challenging, especially without a well-planned budget and long-term financial plan in place.
Without good management and financial planning, your organisation could struggle to allocate resources and you could descend into a deficit.
It is in the best interest of your establishment and pupils that you manage the budget effectively to provide the best service to them.
Review your budget
It is crucial that you review your budget for the year ahead and long-term.
Colleagues responsible for budgets can carry out analyses to determine areas of improvement. They can also identify which areas may need extra funding based on exam results and resources.
Reviewing past performance can provide valuable insight into underspends, overspends and accuracy. It can also provide information on the areas which have historically had the most investment. This insight will help shape your school budget.
Financial benchmarking against other schools will also help you understand how spend compares and puts finances into context.
You can read our blog on financial benchmarking and utilise the schools benchmarking tool.
Plan ahead
Once the first step has been completed, it is then time to think about resource, staffing and premises needs for the next year. The planning stage is often a cohesive process.
Some considerations you need to make for planning are:
Medium-term planning
We recommend setting a budgetary forecast for three to five years in line with guidance from the ESFA. It is difficult to predict what changes and challenges may occur in this length of time, but it is worthwhile.
Planning long-term will also help to ensure that your budget aligns with the school, academy or trusts' overall strategy and ethos.
Modelling some scenarios and ‘what-if’ situations, such as inflation or salary increases/decreases, will help put situations into context and allow you to prepare. Conducting a risk analysis and considering development and local planning will also be beneficial here.
Researching the local and national education community will give you oversight of changes in funding, keeping you on top of your planning.
Implementation
Once your budget has attained approval from the governing body/trustees, it can be implemented. The monitoring and evaluation stage will now begin.
As stated in our dealing with the responsibilities of school budgeting blog, you should never stop reviewing your school budget. This means you should consistently monitor your spend against budget.
This alongside your month-end processes, will help you keep control of the factors affecting your finances so that you can focus on the bigger challenges.
Get support from our finance experts
Get support with your school or academy budgeting here.
SAAF provide a range of workshops throughout the year, click here to find out more.
A: Effective budget planning is essential to allocate resources appropriately and avoid falling into deficit. Without a well-planned budget and long-term financial plan, your organisation could struggle to provide the best service to pupils. Good financial management ensures you can meet staffing, premises and resource needs whilst maintaining financial stability.
A: Colleagues responsible for budgets should carry out the initial analyses and planning work, identifying areas for improvement and extra funding needs based on exam results and resources. Once developed, your budget must attain approval from the governing body or trustees before implementation. This collaborative approach ensures oversight and accountability throughout the process.
A: Start by reviewing your budget for the year ahead and long-term, examining past performance to identify underspends, overspends and accuracy. Financial benchmarking against other schools helps you understand how your spend compares and puts finances into context. Research the local and national education community to stay informed about funding changes and maintain oversight of your financial position.
A: During the planning stage, consider key factors including funding changes, procurement needs, development plans (such as school improvement, IT and facilities), class sizes and pupil numbers, staffing profiles, price increases, and local authority plans. Review historical spending patterns to understand which areas have had the most investment, then align your budget allocation with your school, academy or trust's overall strategy and ethos.
A: We recommend setting a budgetary forecast for three to five years in line with ESFA guidance. Model different scenarios and 'what-if' situations, such as inflation or salary increases, to prepare for potential challenges. Conduct a risk analysis and consider development and local planning to ensure your long-term budget remains realistic and aligned with your strategic goals.