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You’ve Got the Purse Strings, Now What? - How new primary academies can budget responsibly

Upon becoming an academy, a formerly maintained primary school will be given complete financial independence. Here, HCSS Education chief executive, Howard Jackson, outlines the steps that newly converted academies should take to ensure that their finances are managed effectively… Amid promises of increased independence and control, the government is encouraging more and more schools to […]

Howard Jackson
by Howard Jackson
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Upon becoming an academy, a formerly maintained primary school will be given complete financial independence. Here, HCSS Education chief executive, Howard Jackson, outlines the steps that newly converted academies should take to ensure that their finances are managed effectively…

Amid promises of increased independence and control, the government is encouraging more and more schools to convert to academy status, and weaker schools to join forces with stronger ones to help raise standards across the board.

Evidence has shown that giving schools greater freedom over things such as their curriculum, budget and staff can help improve the quality of the education they provide. However, when a school converts to academy status it becomes responsible for managing the entirety of its budget. Subsequently, there will be a number of financial considerations that new academies must start to bear in mind.

Teachers’ pay Converting to academy status means that schools can adapt elements of teachers’ pay and conditions to ensure that available time is used as effectively as possible. Under teachers’ pay and conditions, PPA and management time is estimated to make up around 10% of timetabled teaching time. However, it’s possible to save money by releasing teachers from assembly and registration duties, which can reduce reasonable management time. Another thing to consider is to do as some schools have done, and review the use of support staff in the whole school, .

Procurement Another financial responsibility academies have is to manage their procurement. As with all forms of public funding, academies are required to demonstrate openness and fairness when it comes to purchasing. Academies are obliged to publish a statement of best value within their annual statutory accounts, and prove that they have made the most cost-effective use of their funding.

Effective procurement will result in financial savings that can then be reinvested to raise school standards. In May this year the government published a comprehensive guide [PDF] for academy schools on how to manage their procurement effectively, giving schools practical ways to strike the right balance between quality and cost, and achieve value for money on their purchases.

Internal controls In accordance with the official Academies Financial Handbook 2015 [PDF], academies must organise a team of personnel with the skills, knowledge and experience to effectively run the school. An academy trust’s Board of Trustees must appoint a committee that will be able to maintain robust internal control. A key role within this committee is the chief financial officer (CFO), who will be responsible for ensuring that the school exercises good financial management and that its budget is used economically.

The role involves both technical and leadership duties, so it’s advisable to recruit someone with notable business or accountancy experience and qualifications. In some cases, converted primary schools may need to recruit someone new for this role. Attracting the best talent can be another challenge, but with more control over aspects like pay, school leaders have greater recruitment opportunities.

Effective financial management systems Given academies’ increased financial responsibilities, it is wise to invest in a financial management system that can help simplify operations and make keeping track of budgets and finances more straightforward. While there are a number of such products on the market, it would be wise to choose one tailored to the education sector.

It is much more effective to have a system in place specifically set up to address a school’s financial needs – in areas such as electronic ordering and payment, inventory management and ledgers for recording and totalling all monetary transactions. An effective system will help busy members of staff complete their day-to-day financial tasks quickly and accurately and include the ability to produce detailed reports, which can then be passed on to the Board of Trustees. The increased independence that comes from converting to academy status brings with it a number of benefits – but also a lot of changes to adapt to, when it comes to managing the school’s finances. When a primary school becomes an academy, greater transparency and thorough financial accountability will be called for. It’s therefore important that school leaders take steps to ensure that they have a strong team of skilled personnel and the software needed to help them deal with their added responsibilities. With these in place, their budgets can be managed in the most cost-effective way possible.

HCSS Education is an education finance specialist that provides software solutions, training and consultancy services. For more information, contact 01625 511 011 or visit www.hcsseducation.co.uk

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