Is it Credit Crunch Time for Schools?

 

As the recession deepens, tax revenues will reduce and it seems likely that all public services will feel the pinch in some way. But should schools be worried? And what can they do to make themselves recession-proof?

 

Few would doubt that education is better funded now than it has been for years. Yet local authority guidelines state that aside from legitimate projects, primary and special schools should not put aside more than around 8% and secondary schools around 5% of their annual budgets. This means the money schools have is for the children they are educating today. Putting money aside therefore is really not an option.

 

Gordon Brown has insisted that spending in the public sector must continue to support the economy, which is reassuring. However it may be prudent (to use a Gordon term) for schools to make a few small changes today which could make a big difference in the future, should belt tightening be required. But where should schools start to make savings? Probably the most logical place is with the financial management systems.

 

Tightening the belt

Better financial management will mean governors and leaders know exactly where the money is going and what the impact of any spending is. They can model different budget scenarios to see the results of costs being cut in certain areas and ensure that changes are made where they will have the least impact to learning in the school.

 

Switching to eProcurement will help schools save money too. In some local authorities schools are using the DCSF’s OPEN portal which allows them to shop online and compare prices easily from different suppliers. They can purchase and pay for goods automatically from their financial management system. It means better prices, a better audit trail and less administration time spent on this task. One school told me how teachers tended to buy from the same suppliers every year but by using OPEN they could see the exact same resources at far cheaper prices than their traditional suppliers offered.

 

A rather simple change – the payment of invoices by BACs instead of cheques – can reduce the amount of time taken to authorise and sign cheques. For an average secondary school this results in a saving amounting to £3.5k per year, according to our calculations. Most schools I know could find a good home for that sort of money.

 

Primary schools that switch to computer systems to automate the processing of dinner money payments have reported huge efficiency savings when they replace their paper processes. We have actually had tongue-in-cheek calls to our help desk from school office staff asking us what they can do with their now-spare Friday afternoons since making the change.

 

Look at what you have got

In difficult times people are often asked to do more with the same amount of money and one way to achieve this is by using current resources more effectively. I have just come back from the BETT educational technology exhibition and I saw a number of people looking for pupil tracking systems or software to help with the self-evaluation process or monitoring behaviour. In fact, most schools have already bought and paid for these resources in their management information system. They do not necessarily need to spend money on new resources for these tasks.

 

As the wise financial guru, Warren Buffet put it; “Someone's sitting in the shade today because someone planted a tree a long time ago.” Perhaps it is time for schools to start planting some trees of their own so they can cope with potential leaner times to come. Preparation is after all the key to success.