Tag Archives: education funding

Academies increase cash balances

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Hard on the heels of the Treasury Select Committee’s Report, with its comments on government funding of education – see previous post on this bog – comes the 10th Annual Academy Benchmark Report from Kreston Global Kreston-Academies-Benchmark-Report-2022-Web.pdf (krestonreeves.com) This detailed report raises a set of interesting questions, and also offers pointers as to why the labour market for teachers in the secondary sector may have been so buoyant during January 2022.

The Kreston Report comments that

“Once again, we are seeing record breaking in-year surpluses for MATs, whilst secondaries are showing a small increase and Primaries have fallen to 2019 levels. But this top level statistic hides the complex mix of variables giving rise to the surpluses. This result is likely to be a by-product of Covid-19 factors rather than an intentional result. The good news is that fewer Trusts are now in a cumulative deficit position and only 19% had an in-year deficit (2020: 25%).”

And

“The size of the in-year surpluses has gone up to record levels; there are less Trusts making in-year deficits, there are less Trusts with cumulative deficits, free reserves are up, and cash balances are up.” (page 12).

The Kreston Report adds that: “From conversations we have had with our Academy clients many were budgeting for in-year deficits or to break even, and were on track for this to happen. “(page 11).

Now, does this mean that a lot of the cash for catch-up programmes is already sitting in secondary school bank accounts? Why wasn’t the saving on supply teachers and other budget heading immediately transferred into support for pupils?

To allow reserves to increase during the pandemic raises questions abut either a lack of congruence between values and budgets or a less than perfect understanding of financial affairs by school leaders? Surely, neither is the case. However, the increase in balances, even if unexpected, does raise some interesting questions about the relationship between decision-making and educational values.

Way back in the 1990s, when I first worked on Assessment Centres for would-be headteachers, this was an issue of concern. Those in education are good at talking, but do they always possess the skills to put their values into actions? What is the relationship between the values of school business managers and education leaders, especially when faced with challenges for which there is no rulebook?

One reason for high cash balances cited by Kreston in the report is my old bugbear, saving for future capital spending. The Kreston Report says this “Some MATs do have a strategy of accumulating funds within the central fund to meet the costs of future capital projects, so this could explain why there are sizeable balances carried forward in some cases.” (page 20) My view has always been that revenue spending should be for today’s pupils, not those of tomorrow, especially when the non-physical environment is so challenged as it has been during the pandemic.

The Kreston report concludes with some interesting benchmark data, but not, as far as I can see, anything on staff recruitment costs. In view of the amount schools can spend in this area, that seems like a curious admission not to extrapolate it from the measure where it is no doubt currently buried.

Taken together, both the Select Committee Report on future spending and the Kreston Report on past trends make for interesting reading for anyone concerned with the education of the nation’s young people.

Keep rural primary schools open

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Two years ago, I wrote a blog about rural schools. Update on rural schools | John Howson (wordpress.com) Recently, the DfE published a new update of their list of maintained primary schools in rural areas. Rural primary schools designation – GOV.UK (www.gov.uk) The designation of ‘rural’ means more stringent rules have to be followed before a case for closing such a ‘maintained’ school can be made out. However, as the Order dealing with closures was made before academies were created, I assume that such procedures don’t apply to such schools.

In the recently published DfE list, there appeared t be only one school ‘proposed for closure. The school was located in North Yorkshire, a county with a large number of small rural primary schools.

As in previous lists there were four ‘greenbelt’ schools in the London boroughs, including two in Enfield. Both of those schools are Church of England schools, as indeed are many in the whole list. This reveals something of the history of the development of education in England and the reluctance of the State to become involved in what was seen as a responsibility of families. As the philosopher J. S. Mill put it “the role of the State is to see that its citizens are educated, not to educate them itself.”

There are echoes in Mill’s statement of the dilemma facing the government today over its approach to covid. The term ‘medical socialism’ a modern take on the phrase ‘nanny state’ has begun to appear in the media to explain the demands for no more restrictions on liberties that many Conservatives at Westminster are championing in the face of rules sought to reduce the speed of the spread of covid through the population.

It is interesting that the rules on rural school closures, and the need for a list of such schools, were made by a Labour government. Whether by inertia or a recognition that many such schools are located in constituencies with Conservative MPs, no government has challenged the rules even though they interfere in the workings of the market for school places.

Of course, other policies have impact on the future of rural schools. On the one hand there are the additional cost to the taxpayer locally of providing ‘free’ transport to another more distant school if more than three miles away or reached by an ‘unsafe’ route. On the other hand, the formula for funding schools may make some rural schools financially unviable unless they are part of a larger grouping where excess costs may be subsidized.

However, the funding formula does have some ‘fudge’ factors. In the previous blog the case of Holy Island First School was cited. The latest DfE data shows the cost per pupil as £91,000 compared with £4,292 for St Philip and St James Primary School in North Oxford. Find a school (skillsfunding.service.gov.uk)

Keeping school in their communities comes at a cost, especially in rural areas, but surely that is a cost worth bearing for the sake of these communities.

Good News for All?

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The latest Education and Training Statistics issued today by the DfE offers both government and opposition something to shout about Education and training statistics for the UK, Reporting Year 2021 – Explore education statistics – GOV.UK (explore-education-statistics.service.gov.uk)

For the government, the news that Pupil Teacher Ratios (PTRs) have improved in the primary sector and not worsened in the secondary sector can be seen as good news even though the improvement in PTRS in the primary sector probably has as much to do with the decline in the birth rate as it does to direct government actions. With pupil numbers still on the increase in the secondary sector, it is not surprising to see no improvement in PTRS in that sector.

 PrimarySecondary
2016/1720.515.5
2017/1820.915.9
2018/1920.916.3
2019/202020.916.6
2020/2120.616.6

Source: DfE Statistics of Education 2021

PTRS in the secondary sector remain at historically high levels for the country as a whole, and there will be areas of the country where the ratio in the secondary sector is even higher than the national average. Too often high PTRs have been associated with areas of deprivation and there are challenges here for the levelling up agenda if that remains the case. The Conservative Government invented the idea of Opportunity Areas to seek to address this issue: have they worked?

Opposition parties will no doubt seize upon the fact that education expenditure in real terms declined by 0.4% comparing the most recent year with the previous year. However, expenditure in the primary sector increased by two per cent and by seven per cent in the secondary sector in cash terms, presumably as a result of the weight on pupil numbers in the funding formula.

One outcome of the covid pandemic is that education’s share of GDP increased between 2019/2020 and 2020/2021 from 4.0% to 4.5%. No doubt it will fall back next years as the wider economy will have recovered from lockdowns and the other disruptions economy brought about by the covid pandemic.

The government can also point to improving percentages in the number of young people classified as NEETs (Not in Education, Employment or Training). In the quarter April to June 2021 the overall figure for the 16-24 age-group was 9.3% as NEETs, down from 11.3% in the same quarter in 2029/2020. Only 3.7% of 16–17-year-olds were classified as NEETS in the April to June 2021 Quarter. However, the largest fall in the percentage of NEETS over the past year was in the 18–24-year-old age-group.

 There is a wealth of other statistics in the release, but many have been so badly affected by the consequences of the pandemic that there is little to say except that 2020/2021 was a highly unusual year and the data will remain as an anomaly in longer-term trend lines of statistics. What will be interesting will be to see how long the recovery period is, and whether if different groups respond in different ways to the outcomes of the pandemic, plus any steps that the government will take to ensure that some groups are not left behind.

What’s the purpose behind school funding?

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The National Audit Office (NAO) has issued a report into school funding. https://www.nao.org.uk/report/school-funding-in-england/?slide=1

The present, and relatively new, National Funding Formula has exercised this blog on a number of different occasions. As recently as early May, I wrote that

The current National Funding Formula is fine as far as it goes. However, as I have written before on this blog, it is based upon a notion of equality that resembles the ‘equal slices of the cake’ model of funding distribution. That’s fine if that’s what you want out of the Formula, and the f40 Group of Local authorities have tirelessly campaigned for fair – more- funding for their areas. Again, they are right to do so.

However, if the new agenda has leveling up at its heart, then it is necessary to ask whether the present method of distributing cash to schools and other education establishments will achieve that aim? Leveling Up will need a new Funding Formula (posted 9th May 2021)

The NAO’s view as summarised in their conclusions is that:

‘With the introduction of the national funding formula, the Department has met its objective of making its allocations more predictable and transparent. However, it is difficult to conclude definitively on whether the Department has met its objective of allocating funding fairly with resources matched to need. There has been a shift in the balance of funding from more deprived to less deprived local areas. This shift has resulted mainly from changes in relative need and the introduction of minimum per-pupil funding levels. Although more deprived local authorities and schools continue on average to receive more per pupil than those that are less deprived, the difference in funding has narrowed. The Department must evaluate the impact of the national funding formula and minimum funding levels over time and use that information to inform whether further action is needed to meet its objectives.’

They also say of school funding in general that:

‘After real-terms reductions in school funding in the two years to 2018-19, the Department has since increased funding and plans further rises. Because of growing pupil numbers, average per-pupil funding was virtually unchanged in real terms between 2014-15 and 2020-21. The increases in cash funding did not cover estimated cost pressures between 2015-16 and 2019-20 but were projected to exceed them in 2020-21, although the Department has not factored in the potential impact of COVID-19 in this assessment.’

The message on deprivation is not good news, especially for the urban areas where large areas of deprivation are more closely linked to local government boundaries. The NAO make it clear that the DfE has allocated the largest funding increases to previously less well funded areas, which tend to be less deprived. (para 14)

Realistically, in my view, there needs to be a funding formula that is aligned with policy objectives. For instance, there should now be enough data about Opportunity Areas to see whether they have been any more successful that previous attempts at area based schemes to improve outcomes or whether national schemes such as the Pupil Premium offer better value for money?

This is an important report for anyone that needs to understand the niceties of school funding and there, as expected, some useful diagrams and charts to help explain how school funding works.

Leveling Up will need a new Funding Formula

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The current National Funding Formula is fine as far as it goes. However, as I have written before on this blog, it is based upon a notion of equality that resembles the ‘equal slices of the cake’ model of funding distribution. That’s fine if that’s what you want out of the Formula, and the f40 Group of Local authorities have tirelessly campaigned for fair – more- funding for their areas. Again, they are right to do so.

However, if the new agenda has levelling up at its heart, then it is necessary to ask whether the present method of distributing cash to schools and other education establishments will achieve that aim?

As the debate about the High Needs Block of funding for SEND has made very clear, some children cost more to educate than others. If you want all children to achieve a minimum standard of education then some will always cost more to achieve that goal than others. The Pupil Premium recognised this fact. Changing the date of calculation and thus excluding some children from the Premium seems an odd way to start the ‘levelling up’ campaign.

There is a key decision for government to make if they really mean to introduce a ‘levelling up’ campaign in the school sector. Do you hypothecate, as with the Pupil Premium, creating funds only to be used for levelling up purposes or do you distribute more funds generally and leave it to the schools and Trusts to manage the distribution of the cash? This approach leaves maintained schools that are not academies in a bit of a limbo as they don’t have a mechanism to ‘pool’ funds for the common good, as MATs are able to do.

When it works well, the second approach is better, as it is less of a blunt tool than the first method as anyone that has read the history of school funding over the last century will know.

There is a further issue with a Formula tied to geographical areas, as this blog has noted before. Oxfordshire is largely an affluent county, but there are pockets of deprivation in Banbury and parts of Oxford; not to mention the issue of rural poverty as well. Any ‘levelling up’ agenda must tackle these issues in addition to the more obvious areas of underperformance in education achievements.

Overlaying this issue of ‘levelling up’ is the effect on the present Formula of the downturn in the birth rate and its consequences for small primary schools. Do we want them to compete by drawing in parents willing to drive their children to such schools? An alternative is to close them and let council Taxpayers pay the cost of transporting children to other schools. Might work in urban areas, but the Tories would quickly find that save our Schools campaigns can impact more on election chances for Councillors than almost anything else except perhaps closure of a local hospital. There are also implications for the climate change agenda. I would be interested to know where the Green Party stands on this matter.

Doing nothing won’t help the ‘levelling up’ agenda, so if the government is really serious in what it is saying, then action will be needed. Making all schools academies, however repugnant the loss of local democratic control is to people like me, does offer some levers hat MATs can use, but local authorities cannot under the present rules.

It will be interesting to see what plays out over the next few months in a debate where doing nothing will have as many consequences as doing something.

Are schools wasting £30 million pounds of public money?

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TES Global, the largest supplier of paid-for teacher recruitment advertising in the field of education has just published their accounts for the year ending 31st August 2020. Those so far published are for TES Global Limited. Those for TES topco are yet to appear. The published accounts can be found on the Companies House page, by searching under TES Global.

The accounts for the year to 31st August 2020 included almost six months of the pandemic, so it is not surprising that turnover from continuing operations fell by around £2 million to £59.2 million. Thanks to interest receivable and other income of £25.3 million, the Group made an overall profit of £22.3 million. Without that income there would have been a loss of around £3 million; this despite cutting the wages and salary bill from just under £14 million to around £9.5 million, and slashing headcount from 235 to 191.

The sale of the TES owned Teacher Supply Business in December 2020, for a total consideration of £27 million including upfront cash of £12.5 million, will no doubt further help to strengthen the balance sheet. However, the income from those businesses were, presumably, included in these accounts.

Of interest to me, as Chair of TeachVac, and no doubt civil servants at the DfE running the DfE teacher vacancy site, was how the TES was doing serving the teacher recruitment market, and how much cash was it securing from state-funded schools for recruitment advertising, all of which is now on-line, like both TeachVac and the DfE sites.

As the TES has been pursuing a policy of persuading schools to pay an annual subscription for several years now, rather than point of sale advertising, the TES Group income has been less affected by the downturn in vacancies during the pandemic than it would have been if each advert had been paid for individually. A quick calculation from the published accounts suggests that while overall revenue fell by 4%, advertising revenue continued to benefit from the switch to subscriptions. Such income rose from £37.6 million the previous year to £42.4 million in 2019-2020. Traditional advertising income fell from £17.7 million to £10.9 million during the same period.

The TES has some 1,000 international schools and presumably schools elsewhere in the United Kingdom, as well as non- state-funded schools that contributed to the £42.4 million of revenue. A generous estimate might suggest perhaps £35 million was paid by state-funded schools in England in subscription income in 2019-2020 to the TES.

It is interesting to compare this with the DfE evidence to the STRB earlier this year, where at paragraph 45 they stated that:

With schools spending in the region of £75m on recruitment advertising and not always filling vacancies, there are very significant gains to be made in this area. Over 75% of schools in England 14 are now signed up to use the service and over half a million jobseekers visited Teaching Vacancies in 2020. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/967761/STRB_Written_Evidence_2021.pdf

According to the latest DfE announcement, some 78% of schools have now signed up to the service https://www.publicsectorexecutive.com/articles/councils-encouraged-sign-dfes-free-teaching-vacancies-service?utm_source=Public%20Sector%20Executive&utm_medium=email&utm_campaign=12340062_Newsletter%2027%20Apr&dm_i=IJU,7CHNI,AUR327,TT9F6,1

I wonder where the other £30 million of so is going – surely not to the local press or eteach and The Guardian?

Either way, that is still a lot of cash schools are spending because they don’t have enough confidence in either TeachVac or the DfE sites to allow them to take the risk of not signing up to the TES. Or is it just inertia?

If the government is serious about helping schools save this money spent on recruitment advertising for other purposes, and the cash will surely be needed in the post-pandemic world, however speedy the recovery, given the amount of public cash spent in the past twelve months. There must be a campaign to encourage teachers to use the free sites, and for schools to always ask where applicants either received notice of the vacancy or saw the vacancy that they applied for. This will allow schools to evaluate the effect of paid-for advertising and the TES subscription compared with the use of the free sites instead.

Interestingly, TeachVac reached a new high of 6,000,000 hits in twelve months at the end of April. This was despite the fall in vacancies on the site during the past twelve months as schools cut the number of teaching post advertised.

May 2021 should be the first 1,000,000 hit month for TeachVac, with corresponding highs in visitors and vacancies matched as schools return to a more normal recruitment pattern, as explained in a previous post on this blog.

Another nail in the coffin of 3-tier schooling

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Somerset County Council is to reorganise some of its remaining three tier schools into a more usual pattern of primary and secondary sectors according to a BBC story.

Council approves changes to Somerset schools

Somerset County Council has approved changes to nine schools in the Crewkerne and Ilminster area – saying that while the majority of responses to a public consultation had opposed the plans, no viable alternatives had been put forward. Pupils in the schools will move from a three-tier system (infant or junior, middle and upper) to a two-tier system (primary and secondary), with the change prompted by financial instability resulting from low pupil numbers. The Cabinet member for education and transformation said the decision marked a “significant milestone” following a “long and difficult journey”. https://www.bbc.com/news/uk-england-somerset-56430254

Three tier patterns of schooling, similar in nature to the private sector, pre-prep, prep and secondary school model were introduced into the state system in the late 1950s and early 1960s. Usually they were introduced in response to both the move towards non-selective secondary education and the most efficient use of school buildings following the requirement of the 1944 Education Act to remove the remaining all-age elementary schools. All-age schools became briefly fashionable again with the advent of academies, but I have yet to see any research evidence of whether they work any better than the dominant system with a break at eleven.

A few three tier systems still linger on, especially in Northumberland and a few other areas, but for the past two decades authorities have been unwinding most of the systems. There were two models at the height of the three tier approach. A switch to secondary at age 12, where the schools educating children up to twelve were regarded as primary schools and those with a break at 13. The 9-13 schools in those systems were regarded as secondary schools. This compromise affected the funding arrangements for pupils depending upon which system was in operation. Buckinghamshire used the former system whereas Bedfordshire chose the latter.

In Oxfordshire, the City of Oxford, in 1974, at the point where it lost its status as a County borough and became a district council with no further responsibility or schooling, opted for a three tier system of schooling, even though the rest of the county had opted for a two tier comprehensive system. In those days, the city was run by a Conservative administration, and there are those that think the choice of a different system to the county system reflected a view on the loss of perceived status by the city politicians. Certainly, it took until the end of the 1990s before the county achieved a single unified system of education. That lasted a mere decade before the arrival of academies once again fractured the landscape asunder.

Three tier systems had some impressive supporters including Sir Alec Clegg in the West Riding of Yorkshire. But, in the end, they were never destined to be more than a footnote in the history of state schooling in England.

Off to University

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Here’s a hear warming story about a student from among the group of most disadvantaged pupils in our education system https://www.oxfordmail.co.uk/news/19162077.traveller-milly-teaches-classics-going-oxford-university/

I would say in our schools, but most traveller and Romany children don’t go to school on a regular basis.

When I joined Oxfordshire’s Education Committee in the early 1990s – some readers may have to look up the term Education Committee in the history books – Oxfordshire had a fully fitted mobile classroom serving this community. Now, these children sometimes don’t even appear on the pupil outcomes data as a group as their outcomes are so far adrift from those of other groups in society.

Fairground children are a distinct group within the wider category, and in rural areas they spend part of the year traveling from market own to market town for the annual street fair.  So, congratulations to Milly on winning a place at University, and to Joe for the work that his organisation does to promote Oxford University with state school pupils.

I wonder whether anyone has thought about traveller children during the lockdown and whether they have had access to on-line learning. I will be asking the question as this group could surely benefit from the learning about remote teaching and learning gained during the pandemic.

I recall visiting a secondary school a couple of years ago where they had children from a mobile home community site for travellers on their roll. They worked hard to ensure the children received an education even though it took up time and resources. The National Funding Formula and per pupil funding don’t provide for the needs of groups where special arrangements are required.

I won’t say ‘Good Luck’ Milly, because I don’t believe she needs good luck. But, I do hope that she enjoys her time at university.

Understanding Academy Finances

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Recently, I came across a new study into the income and expenditure of academies by Xeinadin https://www.xeinadin-group.com/industries/academies/ When following up on that report, I also came across another and lengthier report from Kreston Reeves https://www.krestonreeves.com/news/academies-benchmark-report-2021/ published last month.

Both are interesting in their own ways. However, neither accounts clearly for the fact that there are different pay areas within the School Teachers’ Pay and Conditions Document and the annual recommendations from the School Teachers Review Body. Now, these differences do not matter when percentages are used, but comparing on cash figures may introduce some distortion in the outcomes if the difference between MATs in Inner London and those outside the London and Home Counties pay band areas are ignored, although the Kreston Reeves report does have some regional benchmarking data for six areas of England. Whether lumping together London and the South East and seemingly totally ignoring the East of England is helpful is a matter for the reader to decide.

Neither report considers the labour market for teachers nor the costs associated with it in detail, although there are discussions about both staff and supply teacher costs. Future reports might like to focus on both the costs of retention over recruitment, and the most cost effective ways of recruiting new staff.

I was interested to read in the Kreston Reeves report that:

“The full financial impact of the pandemic will not be known for a while yet. As schools went back in to another lockdown in January 2021, then the savings made in the first lockdown can perhaps be expected to recur, although as there are much higher numbers of key worker children in schools post Christmas, these savings are likely to be more modest. Where this leaves the Academy sector finances for the current academic year is anyone’s guess. The length and frequency of lockdowns, the criteria for allowing children into schools, and the education provided will all have an impact.” (Page 10)

Both reports discuss the matter of how much of a school’s budget is used for central costs of a MAT. They both seem to coalesce around a figure of 5%, although some MATs do seem to operate with either a much higher or lower percentage.  

The fact that academies are on a different financial year to local authority schools isn’t an issue for these reports, but is something that makes comparisons between the different types of schools more difficult, especially over a short-period of time.

How schools receive and spend their income is a matter for public interest, and these reports are helpful, in as far as they go, in understanding the academy sector, and especially the behaviours of MATs.

As most readers of this blog will know, I personally, prefer schools to be under the democratic oversight of locally elected councillors, albeit with a significant degree of autonomy. The fact that some schools have access to considerable letting income while other schools struggle to educate challenging groups of pupils on far less financial support is but one reason to ask for a system designed to benefit all pupils and not just some.

£3 a vacancy

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Finding, matching and linking teacher vacancies to interested applicants for just £3. This seems unbelievable, especially if you add in all the benefits of the data collected to help with expanding our knowledge of the teacher labour market.

But, less than £3 a vacancy is the cost TeachVac’s accountants are telling me as Chair that we spent in the school year 2019-2020 handling more than 50,000 vacancies during that time. Adding teacher capacity comes at negligible cost to the system, and with well over 90% coverage of schools across England, in both state and private sectors, and a five year track record of success, the brand is now well established in the market and offers great value for money.

However, to some extent, TeachVac has been a victim of its own success, the DfE now has a site that carries a fraction of the jobs TeachVac finds. The DfE site also requires schools to do far more work to upload jobs to the site than Teachvac requires.

So it is free to the DfE, free to teachers, but not as free to schools as Teachvac. Indeed, assuming there are development and hosting costs it isn’t free to the DfE. Does it cost the taxpayer more than £3 per vacancy?

School leaders are still happy to see schools spend millions of pounds on recruitment, while complaining that education is under-funded. I don’t subscribe to the argument that education funding must help prop up private sector profits, and I wonder why others with more authority than I will ever have are happy to turn a ‘Nelsonic’ eye to such expenditure.

TeachVac’s latest accounts will soon be visible to all on the Companies House website. They are filed by Oxford Teacher Services Ltd, the holding company. If you would like a sight of the latest accounts before they appear there, do make contact and I will be happy to send you a set.

We have come a long way since the days of hot metal and the moves, firstly from column inches to display advertising, and then to the introduction of colour into vacancy advertising. Shifting recruitment advertising to the web has offered opportunities, not fully exploited by the profession, to cut costs and innovate.

TeachVac has been happy to show the way, and is now looking to expand its expertise gained with teacher vacancies into non-teaching roles. Who knows, we might be able to offer all jobs in schools across England for less than a quarter of a million pounds: now there’s a thought.

Of course if you want to sponsor the site, TeachVac is happy to engage in discussions with you. Imagine, 50,000 vacancies brought to say 60,000 job seekers across the year and around the world as teaching has become a global profession. You can do the arithmetic.

I am proud of what the small team on the Isle of Wight have created over the past five years. Please tell us how we can do even better.