Some academy trusts’ budgets are “not worth the paper they are written on” because they had to be submitted before staff pay rises had been confirmed, education leaders are warning.
On average, trusts’ budgeted spending has increased by 1 to 2 per cent since the deadline for sending returns to the Education and Skills Funding Agency (ESFA) - a figure equating to hundreds of thousands of pounds for large secondaries.
The findings come from a survey of 150 school leaders by the Institute for School Business Leadership (ISBL), seen by Tes.
Meanwhile, separate data obtained by Tes via a freedom of information request shows that the number of returns submitted late increased this year, from 1.9 to 2.3 per cent of trusts, as leaders scrambled to rewrite their budgets.
Teacher pay increases this year were confirmed the week before the 26 July budget deadline. Proposed support staff pay rises were announced just a day before that date.
While pay settlements have previously been close to the budget return deadline, this year the awards were higher than many schools were expecting, meaning many under-budgeted.
The Department for Education (DfE) had initially proposed a 3 per cent rise for most teachers and leaders in its submission to the School Teachers’ Review Body (STRB) in March, but later changed this to 5 per cent for experienced teachers.
School leaders are warning that the deadline for returns needs to be later, or the teacher pay settlement sorted earlier, to avoid the process being a “nonsense” again in the future.
Stephen Morales, chief executive of the ISBL, said that for a large secondary school, a spending increase of 1 or 2 per cent could equate to more than £100,000, and for trusts with multiple schools, this figure could be far larger.
Removing the budget ‘guesswork’
Rob McDonough, chair of the Confederation of School Trusts (CST) and CEO of the East Midlands Education Trust, said the current process meant that trusts were being asked to submit budgets when the cost of their “most expensive resource” - staff - was still unknown.
He added that some of the budgets submitted to the ESFA “aren’t really worth the paper they are written on”.
“We must either bring forward the national recommendations on both teachers and local government pay or we must move back the deadline for budget submission to later in the year, as it was in 2020,” he said.
This would remove the “guesswork” out of the budgeting process and give school leaders the information they need to set accurate budgets and the time they need to adjust their costs accordingly, he said.
He added: “Trusts often take their budget planning through various processes of scrutiny and meetings, and with the teacher pay award coming so soon before the deadline, many will have been unable to redo all of that before the deadline. Some will have submitted late, and some will have to submit their returns based on old information.”
Geoff Barton, general secretary of the Association of School and College Leaders (ASCL), said that teacher salaries were obviously a “huge part” of a school budget and that “it makes a nonsense of the process if schools do not know what the pay award will be until the last moment, and effectively have to guess at a figure when putting their budgets together”.
He added: “Many schools will have based their forecasts on the figures published in the DfE’s submission to the pay review body in March…all those budgets would then have to be revised with no time in which to do that.”
And Ian Hartwright, pay and funding specialist at the NAHT school leaders’ union, said the current process “disrupts budgeting, payroll and planning, creating unnecessary additional workload in schools”.
In a report published in July, the STRB said that it had invited then education secretary Nadhim Zahawi to submit evidence by 16 February 2022, but that the DfE informed it “that it would be unable to meet this deadline so it was extended to 4 March for all consultees”.
It subsequently added: “Any delay to the process is unfortunate and adds to the concerns of consultees about our reports increasingly being published at the end of the academic year, making timely implementation more challenging.”
Warning over ‘catastrophic’ measures
As well as dealing with unfunded pay rises, school leaders are warning of the “catastrophic” measures they will be forced to take this winter - including restricting heating and cutting staff - as they face five-fold energy price hikes.
Heads have told Tes they are “crying out” for intervention from the government, and say their budgets were “never designed” to cope with price increases on this scale.
Leaders have warned new prime minister Liz Truss that the funding crisis in schools should be a priority for her new government.
The DfE said its current consultation on Implementing the Direct National Funding Formula put forward proposals for how the funding cycle would operate under a new funding system.
It said this included providing schools with early information to support their budget planning, while ensuring enough time to gather and quality assure data and calculate allocations accurately.
