Many thanks so far to all schools who have returned their one-year budget plan. If you have yet to send in your budget plan, please could you do so as soon as you can. Thank you.

Within the toolkit schools will also need to complete the 3-year strategic plan for the following two years. This will be based on the current information and best estimates around income and expenditure levels. The strategic plans will need to be signed off by Governors during the first half of this term. A copy of the approved toolkit will need to be uploaded on AVCO by 30 May 2024.

Schools that are struggling to balance their budgets and predicting a deficit in Year 1, 2 or 3 should, in the first instance, contact the Schools’ Accountancy Team [email protected] who will be able to advise on the next steps and the support available from the Local Authority.

The expectation is that if schools initially forecast a deficit position, they are expected to go away and understand why the school is overspending and forecasting the deficit. For example, if pupil numbers are falling, does the staffing establishment need to be reviewed? Revised plans should then be worked on balancing the budgets after identifying any issues in the budget. Any strategic plan received which is showing a deficit position at the end of 2025-26 or 2026-27 will be returned to the school for further work before it must be resubmitted showing balanced positions.

As highlighted in the 2024-25 Budget Commentary, please see below some useful questions that should be considered if a deficit is being forecast:

• Is your monthly financial planning and forecasting being kept up to date? This enables quick response to rapidly changing information.
• Taking a strategic view: Is your strategic planning being updated on a regular basis?
• Do you know your longer-term pupil number information? This will inform funding levels and determine number of teaching staff, other staff and influence spend on non-pay areas.
• Do you use the budget estimate tool to assist in strategic planning?
• Is the information held and available good enough to help form longer term planning?
• Staffing would usually represent around 70%-75% of all expenditure. Is this considerably higher and why? Is establishment information fully up to date?
• What are your average overall teaching costs? What is your average support staff costs?
• Can you estimate year on year changes based on expected changes in: age profile; Management structure; pay rises and on-cost changes?
• Have you benchmarked against similar schools? Link included to DfE Benchmarking site below. 
• Thoroughly review non pay costs. Do contracts and SLAs provide VFM? Use the ‘Buying for schools’ DfE site.

School benchmarking for helpful dashboards and comparisons with other schools: Schools financial benchmarking (gov.uk)