16th June 2017 | Ben

Recenseo News, Education

The Education Profit and Loss

Let me start this blog post by saying that as a Chair of Governors for a secondary school, the funding formula for schools in the UK is fundamentally broken. When schools have to sign up to a national minimum wage, national living wage and national pay structures, it’s somewhat perverse that the per head income is not equal across the country. In recent weeks we’ve seen marches in various parts of the country drawing attention to this important fact.

If funding and costs were equal across the country then OFSTED reports would be far more meaningful. They would actually reflect how well each school had applied its income to deliver the best outcomes for children.

Having said all this, there is a flip side. And that is how little effort some schools put in to changing their own fortunes.

Everything financial comes down to two lines – the bottom line and the top line. They are inextricably linked and no amount of penny pinching will significantly affect the bottom line. Yes, a good cost saving process can deliver savings of up to 15% on ancillary/operating costs, but most of those will creep back within 12-24 months. The only way to make a real difference to the bottom line is to affect the top line – the income – and it is here where I feel schools are not doing enough to change the game.

Schools that are not at capacity are simply not doing enough to increase their pupil numbers, and are therefore missing out on the additional income each student brings. Until every school is full, the argument about funding has holes in it – my opening statement still stands that the income is not always entirely fair, but surely it is better to have more of less than all of nothing? The private school sector has historically been quite good at self-promotion and marketing (it has had to be!) but state schools and academy trusts have not kept pace. Money might be tight and there may not be much to spend on marketing – but if they are not at capacity then continuing to ignore marketing is an own goal and undermines the argument about funding.

With increasing competition from new Free schools and catchment areas mattering less and less in parental choice (Who cares about catchment! You’ve got to compete), marketing has got to be given more prominence in school budgets.

But what about schools which are at capacity and still struggling for money? The question to them is – what are you doing to diversify your income streams? How well do you sweat your assets? Are you renting your premises ‘out of hours’ – perhaps to local community groups or sporting associations? How efficient is your PTA and do you do enough to support them? Are you applying for grants such as section 106, new homes bonus and community infrastructure levy which all come from new housing development in the area?

Whilst the traditional concept of catchment is on its last legs, any school’s ‘area of operation’ (to give it a commercial term) remains relatively concentrated and so marketing activity does not have to be grand – its community engagement that will help change the game – not billboards. Marketing does however need to be targeted and effective and focused on one thing – improving the top line.
Ben Cooper – June 2017

Back to top