With the general election campaigns starting in earnest this week, the major political parties are outlining their respective policies for future school funding.
Conservative policy is to protect England’s schools budget from reception entry at age four or five to the end of GCSEs at 16; albeit funding per pupil will not keep pace with inflation and neither pre-school nor post-16 education is ring fenced. They have pledged to provide an extra £7 billion for additional school places.
Labour plans to increase the overall education budget in England, including schools, nurseries, Sure Start and provision for 16 to 18-year-olds, by at least the rate of inflation. However, per-pupil funding is not specifically protected; meaning some of the increase will be eaten up by rising pupil numbers. Parents of primary school children would be ensured childcare from 8am to 6pm and plans are in place to increase the amount of free childcare for three and four-year-olds from 15 to 25 hours a week.
In a similar vein the Liberal Democrats promise to protect the education budget from cuts, providing more money for disadvantaged school children and free childcare for all two-year-olds. They also propose a two-thirds subsidy on all local bus fares for young people aged 16-21.
None of the parties appear to have taken into account other factors impacting school budgets, such as the rise in National Insurance (NI) contributions. These additional costs to schools will be felt from 2016 onwards. Following public sector pension reforms, the rate of employer contributions into the teachers’ pension scheme will rise. Currently schools pay 14.1% but from September 2015 this will increase to 16.4%.
What does this mean for schools?
The Leeds Schools Forum (an umbrella group representing the 271 state-funded schools in Leeds, including academies and alternative provision) estimates that the combined effect of increases in NI, pension contributions, wages and inflation will eat away £378 million from budgets in 2015/16, rising steeply to £1.1 billion from 2016/17 onwards.
They calculate that a typical state secondary school would have to account for more than £200,000 a year in extra pension and NI contributions, while a two-form entry primary would effectively lose £40,000.
Jon Coles, former Director General of Schools, has shared his opinion on the affect of the additional costs to schools.
Planning your budget in line with a school development plan
The process of linking the budget to the school development plan cycle is complex and requires careful planning and organisation.
The purpose of setting a budget linked to the school’s strategic plans is to ensure that the resources available to the school are targeted efficiently and effectively at maintaining the quality of education provided and improving standards.
When linking the budget process to development planning, the following questions will need to be asked.
- What do we need in order to raise standards and the quality of education in the school?
- What do we need to do to secure the future of the school in line with its strategic vision?
- What is the school’s financial position?
- Are pupil numbers stable?
- What do we need to spend this year and next?
- What are our options?
- What will the budget look like for the next 3-5 years
- How does this help form a picture for the following year and what do we need to put in place now to ensure we have the necessary funding in the future?
Whilst the political situation remains fluid, until the outcome of the General Election is known, the financial impact of changes already agreed is real. Budgets are already affected and will continue to be so. The challenge for school leaders is to identify any risks and to seek professional advice where available.
- DfE guidance on school financial value standards.
- School and college funding and finance information.
- Financial benchmarking for schools.
This article was authored by Ann Silcock - Wythenshawe Catholic Academy Trust