Difficult choices for schools in the face of reduced funding

In 2010 the coalition gave education funding ‘flat cash’ protection and continued with the ring fencing of the dedicated schools grant.

Fast forward to 2015 however and this protection is starting to look more precarious. The Lib Dems have raised serious concerns that if the Tories win the next election, education funding will fall by roughly a quarter, this is around £9bn which equates to the equivalent of scrapping the funding of more than two million pupils, while £640m will be slashed from the pupil premium. Their analysis is based on the fact that the 2014 Autumn Statement announced certain tax, borrowing and spending commitments, but has not promised to protect school budgets, despite giving assurances that NHS funding will be spared from further cuts. Their comments were given added credibility this week when  a daily Telegraph article included a photograph of William Hague’s private speech notes which showed that Tory frontbenchers were told to dodge questions about whether the education budget would be cut. 

This is hardly unexpected news, as in October Lord Nash told schools they would need to ‘cut their cloth’ accordingly after the next election. So what does this mean for schools?

A survey in November 2014 by Browne Jacobson and ASCL showed that 55% of all school leaders have earmarked reducing costs as a major priority over the coming academic year, rising to 71% amongst secondary school leaders.

Many head teachers have in the past claimed ‘ I don’t do figures’ , however as the above survey shows this is an area rapidly ascending the priority ladder, and many if not all have found their role is now significantly widened to include the necessity of being ‘financially savvy’. 

Local authorities have had a few years head start on having to cut their cloth accordingly – and it has often been painful and unpalatable. But how do schools follow suit?

Aside from the general efficiency drive in cutting costs there are a number of restructuring options here, namely class sizes, breadth of curriculum options and shared services. 

Around 75-80 percent of a schools budget is spent on staffing, so in order to make savings you can tinker with the smaller stuff, such as cutting unnecessary supplies and services and being more efficient with procurement, but for big savings – the staff is where it’s at!

The first thing to note is that restructuring in a school is largely dependent on pupil numbers, the more pupils you have the more classes you need, and the more staff you need to ‘man’ these classes. It is the class size that is important here, small class sizes may be desirable, but not financially possible. 

If you increase class sizes, you need less staff and so make savings on salary costs – but what effect does this have on attainment and parental choice? 

To a large extent this depends on your cohort (behaviour and ability) and also the teaching and support staff, in being able to manage larger classes. From the parents point of view, schools with large class sizes are likely to be less attractive than those who offer smaller classes –so do they vote with their feet and head for those schools offering smaller classes (if they can find what is likely to become a rare beast in the future). In fact a 2014 mumsnet survey claimed that up to 10 percent of parents responding were considering removing their children from schools due to overcrowding issues. 

John Bangs, from Cambridge University's Faculty of Education, suggests that "smaller classes are part of guaranteeing better educational outcomes”, however with rising pupil numbers in many areas of the country this is often simply not possible. Issues of dealing with overcrowding and simply having the physical space to educate pupils is the more immediate challenge. 

A study from the Organisation for Economic Co-operation and Development (OECD) in 2014 showed that class sizes in the UK were higher than the international average of 21 and above levels seen in countries such as Estonia, Greece, Luxembourg and Slovakia. The OECD have put forward the argument that there is a trade-off between  paying teachers more, (and attracting outstanding teachers)  and having larger class sizes – with many high performing countries choosing the latter. 

Andreas Schleicher, the OECD's director for education and skills, looking at Finland, Japan, Singapore and Korea said: "All those countries prioritise teaching and teachers over infrastructure and class size."

You can only spend your money once, and whether you put it into teaching- in terms of volume or pay is a decision each school will need to take based on its own experiences. 

The other area to consider in restructuring is what the sixth form offers. School funding in this area has been cut to college levels and courses need careful consideration as to their financial and academic worth. Some schools, particularly smaller rural ones claim they can no longer afford to run a sixth form, others are reducing the A level choices to the most popular courses only. A lean choice of subjects may be financially effective for the school, but if students feel it doesn’t offer them what they want, they may head for other institutions which can meet their needs. We are then into a vicious circle – less students means less money – and so the round of cuts begin again!

Playing with class sizes, restricting curriculum options and managing parents expectations can be a tricky and delicate balance – and one where a virtuous circle can so easily turn into a vicious one. 
As we see the financial pressures start to bite, schools may look increasingly at shared services. This is already evident in the growing number of academy chains and collaborations but there are still many academies and local authority schools that are still stand alone institutions. The shared service trend has escalated in recent years within local authorities, and the irony now is that when economies of scale are most needed, many schools on their own do not simply have the buying power of a local authority. Shared staffing, procurement, back office and curriculum delivery across schools may grow as a matter of economic necessity rather than choice. 

Of course all this is conjecture, we don’t know the outcome of the forthcoming election, we don’t know what the education financial settlement will be  but we do know that austerity is continuing and that schools should not expect a funding boost anytime soon, in fact they would be well advised to have a think now ….just in case!

Lisa Forster, CPFA, SS(prac), FAN Advisor 

E: lisa.forster@cipfa.org 
Twitter: @lisaforster7