Budget guide for SBMs
Budget guide for SBMs
A large part of an SBM’s role is to allocate and manage the school's budget. This can be a difficult task especially with dwindling budgets to work with. Whether you’re new to being an SBM or have been in the job for many years, here at GLS we are here to help you with your budget. Follow our budget guide for SBMs to better understand and help you manage your schools’ budget.
Make your budget work for your school improvement plan
It is very easy to drown in multiple numbers when it comes to managing and allocating the schools budget. However, it is important to not just follow the budget allocation and management from the previous years. Instead, the budget should reflect your school improvement plan. Think about everything you would like to achieve for your school if you had unlimited budget. Then look at what budget you have and what can be done from that improvement plan in the year ahead.
Set this school improvement plan on a five-year basis. You can show two years ahead, the current year and the next two years forecast for your budget doing this. When setting up and allocating the budget it is important to have:
- Older budgets for reflection on past performance in terms of under and overspending
- Student numbers and predicting changes of this due to other local schools changing their admission policies
- Staffing requirements including update pay
- Exam results to pinpoint the areas in the curriculum that need improvement and better resources- more money can be allocated to certain subjects
- Other factors that need to be included in the budget such as maintenance expenditure.
Principles of school budgeting
When dealing with the school budget, it is vital for SBMs to understand the principles of school budgeting. This is the various funding streams the school receives to generate a budget and purchase resources. There are four principles that you need to have knowledge of and gain an understanding of.
- Revenue funding- This should be used within a year and is spent on resources such as stationery, repairs, salaries and heating.
- Capital funding- This funding is aimed towards long term resources needed such as building work or technology fixing/building.
- Devolved funding- A funding that comes with certain conditions on your spending options. It can only be spent on long-term projects. Student premium money would have to be spent as well with this funding. You will need to provide evidence that the money is targeting students and benefitting them.
- Delegated funding- A no string attached type of funding such as a dedicated schools grant.
These four types of funding can change over time, impacting future budgets. Due to this, it is a good idea to ensure that future budgets don’t rely heavily on one of these funding sources. Use the breakdown of these principles your school receives to create an appropriate and effective budget for the future.
Preparing a budget
There are three stages to preparing a budget for your school that you need to understand and fulfil to create an effective budget. Carrying these stages out allows you to provide your staff and students with the best budget possible, giving them high-quality resources in areas that are needed. Once budgets are prepared, store them in a secure box to be approved if needed. Once the budget is done, ensure to have a separate secure box to keep all bills and budgets together.
Reviewing past performances
The first vital stage to begin preparing your budget is to review past performances of previous allocated budgets. There is a wealth of historical information and data that you can access based on past budgets even dating back to before you could have started your position. Using these allows you to view how the performance of the budget allocation went.
There are multiple areas you can work out and focus on to prepare your budget from using past budget data such as:
- Determine the accuracy of past budgets
- Pinpoint any overspending or underspending concerns from the past to change in the future
- Find which areas may need extra funding that struggled in the past with the budget it was given
Reviewing past performances can give you a clearer overview of your new budget and help you to allocate expenditures wisely. You can also benchmark your school’s performance against other schools in the local area so that you can put past purchases into context. To do this, you can use the Department of Education’s benchmarking system. Through this, you can see what schools in the area are spending for certain areas and resources to aid you with what is best for your school.
Planning for requirement
The second stage to preparing your schools budget is planning for requirement. This stage enables you to discover what your school requires based on income and cost scenarios from historical data and current data you have. There are multiple considerations in this stage such as:
- Development plans
- Ofsted reports
- Student numbers
- Increases of price for resources
- Local government plans
- Staff requirements
- Changing principles of funding
A great way to establish what your school needs is to talk to staff as they can pinpoint areas that need more budget to help their job and the school run effectively. Allow staff to show you what is lacking and how more budget to certain areas can really benefit them and the students. Staff are the ones that can truly see gaps in the budget as they are most likely to be affected by discrepancies in the budget.
Predictive forecasting
The third and final stage to preparing a budget is predictive forecasting. Forecast your budget in a three-to-five-year plan. It can be difficult to predict changes in areas such as future funding and what your staff needs. However, you can use what you know will likely occur and hypothetical scenarios such as internal developments.
To help you be able to do this, it is always best to maintain an active presence within your local and national educational community. Doing this can assist you with gaining insight into future changes that you can use within your predictions for your future budget.
Consider as many scenarios as possible to be able to assess financial impact based on various factors that affect the hypothetical budget you can create. Factors could be areas such as inflation or salary increases. Through this you can make use of what if scenarios in trends that can fit wider historical data. This means you can predict the scenarios that are the most probable to occur so you can put them into your future forecasting.
Budget implementation
Once you prepared your school budget and it can be approved, it can be implemented. When it comes to budget implementation should include monitoring and evaluation of the budget. This should continue throughout the financial year so that any issues can be addressed. It can give you an opportunity to improve areas next year or whenever another budget needs to be created too.
Try to monitor and evaluate the budget each month so that it is easier if you need to submit any budget reports for anyone who may need them. This evaluation aids you with the following years budgeting reviews and makes it easier to forecast budgets.
Value for money & demonstrate value for money
Due to many changes recently, it can be very difficult to secure funding that is enough to support schools. Because of this it is vital to get value for money and demonstrate it as much as possible throughout spending your budget.
A great way to demonstrate value for money is by getting familiar with price comparisons. Doing this allows you to secure the best deals for products and resources your school needs. There are other practices that SBMs need to utilise to get the best value for money out of their set budget. These are:
- Annual contracts to save money
- Bulk buying
- Leasing equipment and resources
- Working with other schools with purchasing
- Day to day purchasing
It is also good to find out that securing value for money affects your overall spending of the budget. Have there been any cheap purchases where a more expensive one could have given your school better results or lasted longer? Other questions you need to evaluate when demonstrating value for money can be, was the low-cost purchase the best quality you could get? What was the outcome of a cheaper spend? These questions allow you to have a better sense of value for money rather than just looking at prices of resources.
Help staff understand financial accountability
It is important to help your staff understand financial accountability as they may feel like they don’t need to worry about budgeting but may come to you to ask for cash. A useful way to help staff understand financial accountability is by using real-life scenarios. Gather your staff together and allow them to ask any questions based on finance and budgeting. Doing this can give your staff peace of mind with finances as you are approachable and transparent with the school budget. It can also allow you to see their financial knowledge too. Ask them about any trips they want to plan or resources they need and take them through the process they can take.
Throughout discussions and the Q&A, it is vital to analyse your staff's answers and how they would manage budgets. There are numerous questions to ask yourself such as:
- Have they costed the trip/resources appropriately?
- Have they considered who to get money off such as parents for trips and how much?
- Are they aware of bringing VAT receipts to you as they can be used to offset the school’s tax bill?
- Have they included hidden costs that may arise?
If there are any members of staff that have managed some of your school’s budget before, ask them to share with their colleagues their experiences. They can show staff what went well for them and what lessons they learned from it. It is also a great opportunity for them to speak up about information they would have liked to know when they managed finances so that you can let other staff know. This allows your staff to fully understand finances and learn from each other as well as learn everything they need to know from yourself.
Why don't you convince your staff to introduce money management to their students too? Provide them with budget resources to use for children so that students can also start to gain knowledge about budgeting and the importance of setting budgets.
Use this budget guide for SBMs to set up and manage your school’s budget in an effective manner, ensuring that vital areas are funded properly. Following this guide can help you provide the highest quality resources and other things you may need to improve your school for students and staff. Ensure to analyse and monitor the budget you set for different areas to see what is working and what can be improved. Learn from your staff and their needs and strive towards an efficient and positive budget.
For more assistance with budgets, read our ‘how to shop practically with decreasing budgets’ blog to help you shop more wisely with ever-diminishing budgets.
