Value for Money (VFM) Based on the Audit Commission Report Valuable Lessons –July 2009

National Perspective Value for money requires economy and efficiency as well as effectiveness (the 3 e’s) FMSiS focus on processes rather than the real achievement of economy and efficiency Councils focus on processes and helping schools in financial difficulties OFSTED’s VFM focused more on effectiveness rather than economy and efficiency

3 components for VFM DefinitionExample EconomyMinimising the costs of resources used for a good, service or activity Are school supplies purchased at the best available price? EfficiencyThe relationship between outputs and the resources used to produce them Does the timetable make the best use of teachers? EffectivenessThe extent to which objectives have been achieved To what extent has the deployment of teaching assistants raised levels of attainment and pupil well- being?

What is VFM? Best use of available resources, including getting better outcomes for the same spend, or freeing up resources that are being used inefficiently for other purposes

The Audit Commission has: Provided separate guidance to: Councils Governors School staff with financial responsibilities (these have been distributed by schools finance) Summary report Full report

Audit Commission will: Work with Ofsted to review/improve the criteria for assessing value for money Update their Managing School Resources tool- helps school self-assess whether they are getting the best from their budgets Provide a new tool to help schools cost workforce expenditure and compare this with performance

Procurement Schools spent £6.8 billion in 2007/08 on goods and services Schools could save £400 million through better procurement alone Running costs 22% of schools expenditure, quoted nationally In the ERYC schools spent £44,424,436 = 22.73% of overall spend

Entering into Contracts Photocopier contracts (e.g) –Free copiers can be costly –‘Ever green’ contracts Be very aware before signing any contract, read the small print, terms and conditions. Get Legal services to check it out. Could be very costly !! Check termination terms. If you forget, the contract could run for another year

Workforce Workforce cost £24.2 billion Comparing 1997 there are – 32,000 more teachers –100,000 more teaching assistants –70,000 more support staff While pupil numbers have fallen by 80,000 Nationally quoted 78% of overall spend by schools In ERYC 77.27% = £161,132,171

Statement The deployment of classroom staff is the most important financial decision in a school

School Balances £680 million in 1999/2000 £1.76 billion in 2007/08 £2 billion in 2008/09 Nearly 40% of schools have excessive balances Could release £500 million nationally from excess balances

Funding Surpluses can grow due to uncertainty about future years funding Right response to uncertainty is good financial management, rather than retaining resources Funding is for the pupils in school now

Funding Settlements The likelihood is that funding growth will be lower than in recent years. Schools need to be planning now for ways of coping with a much more austere future. Greatest challenge to public sector managers – whilst raising standards

Making Efficiency Gains Without adversely affecting children’s education:- Use national benchmarking tool to identify high cost Improve planning to include the cost of the workforce and link financial and performance information Collaborate with other schools Federation Report produced for school staff Managing school resources toolkit- help schools review and improve these processes

Governors Role FMSiS has improved Governors ability to challenge Governors should not think that by challenging a headteachers authority is undermined – it is part of their role Governors should be involved in decisions regarding VFM

Councils should: Challenge schools to produce well costed development plans Provide VFM training Align the finance and service improvement support Encourage schools to use the national benchmarking website Encourage collaboration working arrangements

Question If we spend this amount of money on this item / person, what is the desired outcome? If you had an extra £10,000 in your budget, what would you spend it on?

Practical ways – to start you off Set printer to print double sided and black and white file, print, then click on ‘properties’ Switch off computer screen when not in use

Questions How have you achieved / demonstrated VFM in your school? What constraints do schools feel there are to achieving best value for money? What can the Authority do to help? What can schools do ?