Schools may need to become lean and mean in order to adapt to new funding levels, says Sam Ellis, or they may find themselves facing a budget crisis.

Squeezed middle

I think the phrase ‘squeezed middle’ is quite apt for my waistline, as I try to fasten my belt in the same place as I managed to do so last year. It normally applies to the section of society where costs are rising faster than income, but it seems for that reason quite appropriate, too, as a phrase to be attached to many schools.

Let’s start with a theoretical secondary school as a baseline. For the sake of illustration I am going for an 11 to 16 school with year groups of 210 pupils. To demonstrate the squeezed middle idea, this theoretical school has a zero free school meals (FSM) percentage and does not receive any Pupil Premium (PP) funding.

If I start by assuming classes of 30 in Key Stage 3 for most of the week, classes of 20 or less in technology, an option scheme in Key Stage 4 with eight teaching groups across the year in core subjects and three option blocks with ten subjects in each, then my basic requirement is an average class size of 26.6.

If I add in some teacher time for learning support and for some groups in Key Stage 3 to be under 30, I can easily plan a curriculum for this school on an average class size of 24.

Assuming my teachers teach at a contact ratio of 0.78, I need a pupil-to-teacher ratio of 0.78 × 24 = 18.72, which translates into just over 56 teachers for this pupil roll.

If I take an average teacher cost of £45,000, including National Insurance (NI) and superannuation, then I need £45,000 ÷ 18.72 = £2,400 per pupil in my revenue funding to cover my teaching costs.

If my theoretical school spends at the national median for secondary academies with Key Stage 4 as given on the Department for Education (DfE) website for the year ending August 2013, I need another £2,468 per pupil. That brings a baseline total for my revenue funding of £2,468 + £2,400 = £4,868 per pupil.

I hope my actual revenue funding will be higher than this so that I have some flexible income with which to make a difference.

The numbers above are purely illustrative of a general idea. There is a cost to the basic curriculum I need to offer. There is a second cost required to simply open and equip the school.

The sum of these two costs needs to be less than the funding I receive if I am to have any flexibility in my budget with which to make a difference. That element of flexibility is what I am referring to as the ‘squeezed middle’.

Deprivation factor

If we now consider a more realistic school, there will be a measure of deprivation in the school. Associated with that there will be some additional funding but also an additional need to spend and account for such funding.

It is unlikely that all the year group numbers will fit neatly into curriculum class sizes. It may be that I cannot get my teacher contact ratio up to 0.78. In the worst case scenario these two factors alone can easily eat up around another 10 per cent of my total funding.

The middle is coming under some pressure already and we have not considered whether the school can actually operate at the median value for all other spending.

Another pressure on the middle may be the need to sustain a small post-16 section. When the new post-16 funding settles down, a sixth form with an average class size much lower than about 19 will need some subsidy from the main school, squeezing the middle just a little more.

The real danger is trying to perpetuate the past, a bit like me vainly trying to get my belt to fasten at the same place.

The cost of my teaching staff will almost certainly increase due to pay rises and some decisions on pay scales made following the April 2013 changes could easily add to this problem. The basic costs of opening the building will increase due to inflation.

It makes serious engagement with financial efficiency and effective procurement a must.

As the distribution of funding changes in a fat cash situation there will be winners and losers. Once it settles down everyone’s middle will be squeezed to some extent due to inflation factors alone. What worries me is that some of the losers in the funding reorganisation may find their middle already squeezed out of existence.

In the case of my waistline, I can see a solution in a sensible diet and some exercise. Some schools may well be able to adopt a similar strategy to become lean and mean and adapt to new funding levels.

The squeezed middle is a serious threat for all to some extent and plans for addressing it need to start immediately.

• Sam Ellis is ASCL’s funding specialist

If you are interested in more detail on the calculations please email me at sam.ellis@ascl.org.uk

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