Secondary schools – Are they a business to do business with?

Tony Storey OBE was a Secondary Head teacher for 37 years. He gives a unique insight into how like a business a school is, clearly pointing out what’s important to them.

Secondary schools have a business profile with a 1200 11-18 students, school operating on an annual budget of circa £6 million, 80-85% of which is related to staffing costs: permanent full and part-time teaching staff, ‘technical’ support staff (Lab technicians, workshop technicians, IT technicians), Library staff, site management and cleaning personnel, catering staff, teaching assistants, secretarial, finance and administrative staff, lunchtime supervisors, supply staff. The payroll can involve 80-150 people – more if a school operates community further education and sports functions.

Some state sector schools are C of E or R.C. Aided, Foundation Schools, or Academies although the bulk are still Local Authority (LA) Community schools. School finance is pass ported to individual schools by the LA whether the finance is central government initiated from the local community charge, from the Specialist Schools and Academies Trust (SSAT), or until recently from the Learning Skills Council (LSC) for Sixth Form funding. Academies are funded directly from the Government plus support from sponsors.

The Head teacher is responsible, in a Chief Executive role, for the effective management of the budget reporting on this to the Governing body and as required to the LA, OFSTED, or the SSAT. To assist in this a Head will have a Deputy Head and Leadership Group, which includes a Business Manager, possibly some gubernatorial expertise to draw upon, and an ability to utilise an external consultant if helpful and cost effective. The LA has an audit role although Foundation Schools, Academies and Aided schools may employ their own auditors. C of E Aided schools have links to the Diocesan authorities.

Unless some of the finance is ring-fenced to specific areas – Sixth Form, school specialism, building projects – it’s vireable to cover staffing costs, site and building maintenance, insurance, teaching resources, furnishing and fabric, IT depreciation and renewal, elements of school transport, ‘admin’ costs, examination fees, licenses, grounds maintenance, library and IT enhancement!

A secondary school’s mission is to provide effective education to GCSE and AS/A2 level for its community of pupils, some of which may have special needs. This implies good teaching with appropriate resources and support, extra curricular activities and residential courses to add value, and where possible community use of the facilities in a building which evokes a well maintained positive ethos and brio! Its core function revolves around its student clients and parent customers.

Efficient financial management seeks to balance the books on an annual basis with an eye to needs over the immediate event horizon. A school can carry a year-end surplus or deficit, but eyebrows may be raised if this is more than + or – 5% unless it can be clearly identified to a realistic future building or renovation project.

Everything has a cost implication:-

• Curriculum change may involve new text book resources, or additional or changing staffing needs.
• Number of public exam entries as a cost per pupil entry.
• On or off site job training for teachers and support staff.
• Extra support staff requests, which push up the staffing, the budget may already be at 80-85%.
• Cover staff in lieu of staff absence or staff out of school or on maternity leave.
• How often the grounds and playing fields are serviced: grass cutting, line markings, flower beds
• The rolling ‘Forth Bridge’ programme of external and internal building maintenance.
• Upgrading or enhancing IT systems for students, teaching, or admin staff.
• Electricity, oil, lab gas, coal, water costs as required.
• Variable teaching staff recruitment costs with salaries relative to the nature of a post, seniority level at appointment, plus incremental progression on the existing payroll.
• Staff development and training costs.
• Communication costs: telephones, web site maintenance, newsletters, lap tops for staff.
• Extra curricular support: music / drama; sports equipment, and transport etc.
• Reprographic costs for teaching resource material, ‘in house’ booklets, parental communications.
• Essential servicing: window cleaning, water supply treatments, female toilet servicing, catering equipment, boiler house maintenance, and emergency glazing / plumbing repairs.
• On site and grounds CCTV systems and maintenance.
• Advertising and recruitment costs for teaching and support staff.

Given that staffing costs are 80-85% only 15% of the budget is available for all other needs. Hence all financial expenditure has to be analysed for:-

• Priority of need.
• Health and Safety essentials given risk analysis.
• Knock on costs in servicing, depreciation, and incremental growth.
• Fairness in terms of which age and academic nature of pupils benefits (i.e. expenditure on Sixth Form re Years 7-11).
• ‘Marketing’ gains in attracting students.

The Business Manager has to monitor the on-line budget in progress whilst building up a future budget profile, short and longer term, keeping in close touch with the Head, Leadership Team, Site and Catering Managers. Schools need to make timetabling, curriculum decisions and end-on staffing recruitment or replacement analysis in the Spring Term prior to a new financial year (April-March), but with any major changes operative from September. Hence detailed budget planning for the next April starts in December.

The role of the Business Manager (often integrated with that of Personnel Manager) is a crucial one and many schools now incorporate the post holder on the Leadership Team in order that he or she can monitor decisions for possible finance, personnel problems and needs and, as a senior member of staff, contribute to general educational discussion. The role requires:-

• Financial acumen.
• IT competence.
• Planning scenario sensitivity.
• An understanding of education issues and school day-to-day functioning.
• Knowledge of human resources issues and the law.
• Health and Safety risk analysis awareness.
• Internal audit experience.
• Good communication skills with all staff.
• Close relations with the Leadership Team and Head teacher.
• Awareness of LA, LSC, SSAT, OFSTED monitoring roles.
• An ability to spot budget headings out of kilter with projections.
• Outreach to external organisations (e.g. LA Finance Directive and Schools Forum; Foundation School and Aided Schools Association; potential consultancies etc)
• Experience in tendering.

Some schools undertake purchasing functions ‘in house’. Others utilise LA services or resource some needs from external agencies: cleaning services, building maintenance, grounds maintenance, catering facilities, personnel advice, insurance etc.

Business and management services wishing to interact with schools need to appreciate that they are liable to be dealing with intelligent, skilled, personnel who will be seeking value for money in service provision and are quite capable of talking realities rather than buzzwords with time at a premium. You will need to access the Business Manager direct to outline a service or proposition and have some understanding as to how schools function in a business environment. Cold calls are not awfully helpful and mailing may need to be duplicated ‘for the attention of the School Business Manager’ and ‘for the attention of the Head teacher’.

Many schools seek to undertake major expenditure, particularly on premises related work, on projects for completion during major holiday breaks especially over a six week summer vacation from late July to early September. Get in ‘early’ to assist in the process, and make sure deadlines for completion or delivery are met – schools can't delay re-opening!

Outsourcing by schools can cover new building, building maintenance, energy supplies, supply staff services, grounds maintenance, catering and catering supplies, cleaning services, H & S analysis, skills training, educational development courses, school signage, IT servicing, audit services, equipment and text book supplies, painting contracts, roofing, publishing services, marketing brochures, school uniform supplies, CCTV contracts, sports hall and gym maintenance, First Aid courses for staff, sanitary supply services, window cleaning, reprographics, water treatments …

In marketing a potential service schools will wish to know many of the following at application:-

• The cost of the items or service.
• Any additional ‘delivery’ costs – postage, transport, travel expenses.
• Associated maintenance costs.
• Specification details and warranty/guarantees.
• Lead times for delivery; windows of availability.
• Regularity of provision of support services and materials.
• Any Health and Safety risks or issues.
• Any requirements on site if a presentation, or in service course, or installation.
• Staff training available on new IT/reprographics/workshop equipment: who pays?

Typical school ‘purchases’ over a year include:-

• Advertising for staff.
• Staff in service or outside training (teaching and non-teaching).
• Print services.
• Reprographics equipment and resources.
• IT equipment, peripherals and supplies.
• IT servicing.
• Catering equipment.
• Catering supplies.
• School uniform requisites.
• Grounds maintenance and grass cutting services.
• Building maintenance specialist services (electrical, mechanical, glazing, painting, and roofing).
• Laboratory, workshop, drama studio, sports equipment.
• Text books, library books/media resources.
• Paper from exercise books to duplicating.
• Toilet servicing requisitions.
• Cleaning equipment and materials.
• Fuel supplies.
• AVA equipment – interactive whiteboards, projectors, TV, videos et al.
• CCTV.
• Health and Safety advice.
• Outdoor pursuit’s facilities.
• Transport requirements – sports fixtures, residential course, theatre visits etc.
• Furniture – classroom and office.
• Window cleaning.
• Office equipment.
• Signage provision.
• New buildings: ‘design and build’?
• School brochures and ‘magazines’ (photography, layout, printing)
• Lab and workshop gas supplies.
• Gym and sports hall equipment and Technology workshop equipment servicing.
• Curtains and window blinds; carpeting.
• Security services – locks, key pads etc.
• Car park relining, remarking.
• Catering and site staff clothing.
• Consultancy advice: H&S, Human Resource management, educational development.
• Insurance.
• Pay roll services.
• Auditing.
• School, or pupil, photos

Whereas schools may wish to use some LA central services and supplies organisations where available they are in the market for ‘best buy’, ‘best value’, from the business world. Given it’s a competitive field how you ‘market’ what you can offer is crucial. You can acquire a list of secondary schools (addresses and contact numbers) from an LA or from a schools directory. They prefer snail mailings rather than ‘junk’ e-mail clearly marked for the attention of Business Manager, Head teacher, or Head of Department in internal cost centre (e.g. Catering, Site Management).

There is a requirement for schools to meet FIMSIS Standards, and local finance regulations. It means they will seek estimates and / or quotations to ensure best ‘value for money’. Where necessary (as determined by contract amounts) they will use tendering procedures either engaging the services of a consultant or direct – be competitive as you would with any other organisation.

It’s a polyglot suppliers world with value for money and reliability paramount in the interest of servicing the core clients – the young people. Given the current economic environment schools will be focussing on essentials and seeking to ensure an annual cost neutral budget with a contingency for emergencies.

Tony Storey OBE
Retired Head teacher: The Hayfield School, Doncaster 1971 – 2008