Tips for Budgeting in Schools

May 17, 2022 | Finance Posts

Schools are required to submit a balanced budget for the forthcoming year, covering all forms of income and expenditure.

Governors have to ratify these usually by the 31st May, however this may vary across Local Authorities.

It is also important to prepare a three-year forecast.  This should take into account all known variations.  Governors will then have an indication of the financial position at the end of the three-year period.

Here are a few tips we can offer for budgeting in schools:

Budget Preparation

The school budget is based on the school improvement plan. Monitored regularly will ensure the assumptions are still valid.

The SFVS recommend that governors receive budget monitoring reports at least six times a year.

This then gives governors the opportunity to review the budget against the school improvement plan.

They can also then raise concerns and make changes to ensure the budget reflects actual activity.

Staffing Costs

When preparing the budget, schools should pay significant attention to staffing costs.

The standard benchmark for staffing costs is 75%.  This comprises of the largest proportion of the schools’ expenditure with very little room to make cost savings.

The budget should take into consideration anticipated staffing changes (leavers, replacements, new staff) as well as incremental progression and future pay awards.

It is therefore vital to ensure the schools staffing is accurate and up to date.

HCSS budgeting software is an extremely useful tool.  It helps to ensure that these factors are costed in and accounted for in the budget forecast.

School Contracts and Service Level Agreements

School contracts and service level agreements also comprise a considerable proportion of the schools expenditure.

As good practice it is recommended these are reviewed annually.  This ensures the school secures best value of money and service.

This may also present opportunity for cost savings to be made by negotiating reduced service and new terms depending on the needs of the school.

Other things to take into account

Schools should also take into account relevant available information such as historic data.

Spending patterns in previous years may be helpful in providing projections.

It can also be helpful to compare income and expenditure over previous years to allocate provisions depending on anticipated or no changes in different budgetary areas.

For more support with budget planning, monitoring and reporting or any other school financial issues, you can find out more about our services here.