Forward Financial Plans – Update for Staff Costs and Covid-19 Impact

Why is it important?

A three year forward financial plan, based on your detailed school development plan, provides the school/academy with a clear view of how it will utilise its resources in the most efficient and effective way to provide the best outcomes for the pupils. Apart from being a requirement for the schools SFVS and the academy’s SRMSAT, it enables the governing body to be proactive rather than reactive.

Once the initial plan is produced, it should be updated termly or whenever there is a significant change, this ensures that the full effect of that change across the 3 years is assessed.

Staff cost changes

Three main changes to account for that will not only affect the current budget but have a knock-on effect in future years.

1. staff changes this term are likely to result in a change in salary costs.
2. the agreed support staff pay rise may be more than was budgeted

Incorporate both of these changes in an update to your salary calculations and show the difference in the current budget and your forward plan.

3. Teaching staff percentage increase may differ from what was expected. You can present scenarios to the governing body to enable them to make an informed decision on how they will apply the teacher’s pay percentage across the ranges, considering sustainability.

Covid-19 changes

• Exceptional costs – account for any funding received and any additional expenditure incurred such as PPE or cleaning materials.
• Covid-19 Catch-up Premium – include both the funding and the planned spending; schools this will spread across into 21/22 financial year for the summer term.
• Cancelled school trips – have all costs been recovered from the venue / tour operator / through insurance? If not, you will no doubt be using delegated funds to subsidise the difference in order to fully refund the parents; this added expense can total a sizeable sum for expensive trips such as year 6 residential or secondary ski trips.
• Traded activities such as catering / breakfast club / after school club – the loss of income and drop in related expenditure will affect schools for both the current budget and forward plan; for academies, this may have affected your 19/20 carry forward balance so this needs to be included in your forward plan.
• Own generated income – don’t forget to account for the reduction in lettings for the summer term and possibly the current term.

Assessing the impact

Academies must show that they are operating as a going concern and the forward plan provides evidence of good financial management.

Both schools and academies should have balanced in-year budgets, with planned use of carry forwards; an up to date forward plan will give prior warning of a future deficit position, giving time for remedial action to be taken.

Remember, sustainability is the key.

Further Finance Guidance

See also:

• Trust Capacity Fund – Should You Apply?

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