Russell Bond explains how his school managed to cut its 3 per cent budget deficit dramatically in just two years.

What a great save

When I joined Perry Beeches – the Academy in 2009 as head of design and technology, it had been through a difficult period. In 2006, just 20 per cent of students achieved five A*-C GCSEs including English and maths and it was under an Ofsted Notice to Improve.

When new headteacher Liam Nolan arrived in 2007, he faced several challenges including a significant budget deficit. Under his leadership, the school was turned around and by 2008, 51 per cent of students were achieving five A*-C GCSEs including English and maths, making Perry Beeches the most improved school in the UK. The deficit, however, was still a problem.

In 2010 I was made assistant head and, with Liam’s backing, I joined Future Leaders, an accelerated leadership development programme that trains aspiring individuals to become headteachers of challenging schools in around four years. We both felt that Future Leaders gave us access to a support network and training opportunities necessary to address the school’s challenges.

As part of the programme, I identified ways of reducing the school’s deficit, paying back the local authority 3 per cent of the total budget, annually over five years. The challenge was how to do it without affecting outcomes for students.

There were a number of strategies we implemented to bring the school back to robust financial health.

FSM entitlement

Some 35 per cent of pupils are eligible for free school meals (FSM) but not all parents were claiming their entitlement, meaning pupils were not receiving their free lunch and the school would not be able to claim the Pupil Premium for them. Letters were sent home to every parent and carer explaining entitlement, along with application forms. Assembly and form time was used to explain that more than one in three students are eligible and that it is an entitlement that should not be stigmatised.

There was a turning point when I was having a conversation with a group of year 11 students. When they understood that it could mean a reduction in tuition fees and additional grants worth thousands of pounds at university, students started to understand why it was worth them filling out the form.

The amount received in Pupil Premium funding increased to £138,890 – one of the largest increases in funding that year. Rather than use incentives – some schools encourage parents to sign up for free school meals with free uniforms, for example – we relied on parents and carers understanding that free school meals is something they are entitled to and means more funds to invest in their children.

Tackling waste

Many members of staff were unaware of the school’s financial situation and funds were being lost through waste. Budget-holders were given training in school finance and attended workshops on managing budgets effectively. The school has always tried to maintain an open policy about its financial situation and one of the five key issues which are emblazoned around the school is “to develop an ethos of financial awareness and responsibility”.

Budget-holders were key in reducing the deficit. They purchased only necessary items; they questioned the need of some expenses and at the end of the year did not buy resources to just use up the budget. Some departments were able to make greater savings than others depending on their specific needs. Others were able to delay the purchase of equipment, for example using existing ICT equipment for an extra year.

We also changed the procedure for all expenditure. Budget-holders now approve purchases electronically and all purchases need to be approved by me. This means that there is an electronic record of all transactions so budgetholders and staff can easily access the information, making the process far more transparent and user-friendly.

One of the largest reductions came from exam entry costs. The school improved its procedure for entering students for exams by reducing the number of students who were entered late, incorrectly or twice. As a result, budget-holders spent less than their allocation and actually created a surplus.

Student awareness

I was also keen for students to learn more about financial matters. I started an in-school bank and more than 300 students now have accounts with NatWest and receive training from the bank’s MoneySense programme. The number signing up is increasing and students are coming forward with suggestions themselves, such as creating a rival bank to create competition. Some have even talked to staff about interest rates and incentives for savers.

Perry Beeches has also bucked the trend of staff cuts and has more staff than ever. We have seen increased numbers on the senior leadership team and in the number of teaching and non-teaching staff. The turnaround to an outstanding school has meant that some staff left for promotion at other schools, but there have been no redundancies.

As a result of these steps, the school has repaid 58 per cent of the deficit by the end of year 1 of the repayment plan. We continued to reduce expenditure in year 2 and we could have cut further to wipe out the remaining deficit but decided to invest in curriculum capitation and pastoral rewards.

The plan has always been to try to reduce the deficit in the most manageable way; we would never want to damage the students’ experience and a reduction in budget cannot lead to a reduction in results and outcomes for our students. Indeed, the 2011 GCSE results were the school’s best ever with 75 per cent achieving five *A-C GCSEs with English and maths.

All decisions were made so that the running of the school continued as normal with no adverse impact on student outcomes. On the contrary, in many cases financial decisions were made which had a positive impact on students, such as taking the whole of year 9 to France for a week, the first time the school had taken a whole year group abroad. Parents paid for the trip but there was a large subsidy from local organisations, school sponsors and student fundraising. It is a key part of the school’s ethos that no student would be left behind because of financial reasons.

Lessons learned

If I were to do it again, I would like to have known the changes to budgets set by the local authority year on year. I would also focus on ensuring that the school spends more on curriculum capitation and pastoral rewards, but decisions were made with the best knowledge available at the time.

Other lessons learned include thinking longer term when signing up to contracts and ensuring that every new deal is always in the best interests of the school.

Overall, the deficit reduction has been a great success and the school now has more fl exibility in future financial years. The financial position also means that the school is able to work on its priorities and have the funding available to make long-term decisions.

• Russell Bond is assistant head at Perry Beeches – the Academy in Birmingham.

Future Leaders is a leadership development programme for individuals who have the talent to accelerate to headship in around four years. Applications will be open from autumn 2012 for a June 2013 start. See www.future-leaders.org.uk

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