1. Financial sustainability
National Audit Office Report
Financial Sustainability of Schools
14 December 2016
The SDBE - Developing Church of England Education

2. The SDBE - Developing Church of England Education
Focus
Challenges to schools’ financial sustainability
DFE understanding of and support for schools’ financial sustainability
How the DFE identifies and addresses the risk of financial failure in schools
The SDBE - Developing Church of England Education

3. The SDBE - Developing Church of England Education
Key facts 1
Real terms reduction in per-pupil funding between and due to cost pressures
Savings which schools need to make by to counteract cost pressures
8.0%
£3.0bn
£1.3bn
procurement
£1.7bn
staff
The SDBE - Developing Church of England Education

4. DFE Settlement in the 2015 spending review
Key facts 2
DFE Settlement in the 2015 spending review
Total core schools’ budget (£m) {DSG + pupil premium}
39,556
40,214
40,953
41,745
42,607
Percentage change each year
1.7
1.8
1.9
2.1
Inflation (general measure)
1.5
No of FTE pupils January 16 -January 20 (thousands)
7,262
7,394
7,516
7,628
7,720
Total schools budget per pupil (£)
5,447
5,439
5,449
5,473
5,519
-0.2
0.2
0.4
0.8
The SDBE - Developing Church of England Education

5. The SDBE - Developing Church of England Education
Key findings 1
There will be a real-terms reduction in per-pupil funding between to
Schools face additional costs - pay rises, national living wage, higher national insurance and teacher pension costs, inflation and the apprenticeship levy
DFE savings estimates do not take account of the cost implications for schools of its policy changes
DFE has not tested the minimum cost of running different types of school to achieve desired educational outcomes.
DFE has not communicated clearly to schools the scale and pace of savings that will be needed.
The SDBE - Developing Church of England Education

6. The SDBE - Developing Church of England Education
Key findings 2
The % of secondary schools spending more than their income increased from 38.8% in to 60.6% in
Staff costs represent approx. 75% of the school budget in maintained schools.
DFE advice does not yet include helping schools to save on workforce and procurement, only on financial management and efficiency savings.
The EFA’s records do not indicate that financial risk in academies is being dealt with consistently and it should intervene more often and earlier in maintained schools at risk.
The SDBE - Developing Church of England Education

7. The SDBE - Developing Church of England Education
Questions
What steps have been taken to ensure governors are aware of the pressure on budgets and its implications?
What action are governors and the SLT currently taking to ensure the school will be able to live within its means with reduced income in the future?
How will your school manage the change?
The SDBE - Developing Church of England Education