As schools continue to face financial pressures many will be looking at ways to find efficiencies. Ministers have increasingly encouraged schools and multi-academy trusts to consider whether changing their approach to staff deployment might help.
In March this year, the Education Policy Institute published a report examining school funding pressures in England.[1] As well as looking at trends in the revenue balances of local authority maintained schools, it explored funding pressures caused by increases in pay and associated costs (including employer national insurance contributions and pensions).
Expenditure on teachers and education support staff is a central consideration to the debate on school efficiency. On average, spend in this area accounts for around two-thirds of all school revenue expenditure. In around a tenth of schools it amounts to three-quarters.
It is not therefore surprising to find that even modest increases in staff pay can have significant implications for schools.
Last week the Department for Education announced increases in teacher pay of up to 3.5 per cent, funded by an additional £508m from elsewhere in the DfE budget.[2] This additional funding was calculated on the basis that schools would have already planned, and budgeted for, for an increase of at least 1 per cent.
Meeting even such a modest increase will be difficult for many schools. When we examined the increases in funding that schools would receive over the next two years (based on the published notional national funding formula allocations) we found that nearly half of schools would receive insufficient additional funding to cover a one per cent increase in expenditure on teachers and support staff.
That analysis was based on taking expenditure data at individual school level on teachers and education support staff and then uplifting this by one per cent a year. It therefore makes an implicit assumption that the staffing mix – in terms of the number of teachers and their relative position on pay scales – remains broadly consistent from one year to the next. In other words, this is what the financial position would be if schools continue to maintain the same approach to staffing structures and staff deployment as they currently do.
However, the DfE has argued that there are significant efficiency savings to be made through better staff deployment. As part of a 2016 study by the National Audit Office (NAO), DfE estimated that a total of £3.0bn of efficiencies could be made comprising £1.3bn through improved procurement and £1.7bn through changes to staff deployment.[3] The NAO noted that at that stage the department’s guidance on workforce spending was not available.
So how might schools set about achieving these savings?
In May this year, DfE published a ‘top 10 planning check for governors’ of which a number are of importance when considering staff deployment.[4] In particular, the checklist asks governors to consider:
- The pupil teacher ratio (PTR) – how many pupils there are to each teacher in the school and how this varies across different key stages;
- Class sizes
- Contact ratio – the percentage of a teacher’s time that is spent teaching.
Schools are able to benchmark themselves against other schools on the first two of these measures and for the contact ratio a figure of 0.78 has been suggested by ASCL (10 per cent of time on planning and preparation, 10 per cent on management activity, and a 2 per cent margin). The checklist also asks governors to consider the average cost per teacher and the proportion of expenditure that is spent on the senior leadership team.
Benchmarking tells a school how it compares with other schools operating in similar circumstances, it enables school leaders to start asking the right questions but it does not provide a solution. One solution that has been heavily supported by the minster for the school system, Lord Agnew, and some multi-academy trusts, is curriculum based financial planning.
Thinking back to our earlier analysis of pressures caused by teacher pay, these were based on the assumption that staffing structures would remain consistent from year to year. In a school this would mean, for example, that if a newly qualified history teacher were to leave you would replace with another newly qualified history teacher rather than asking whether an experienced geography teacher is more of a priority.
Over recent weeks we have spoken to a number of multi-academy trusts that have implemented different approaches to curriculum based financial planning and, whilst they vary considerably, they all come back to a simple question – what staffing do we need to deliver the curriculum that we want to deliver?
Proponents of these approaches are often quick to point out that there is nothing fundamentally new in what they are doing, and in many ways they are just building on what schools have been doing over recent decades. However, with school funding continuing to be tight, and a greater need for schools to demonstrate efficiency, it is inevitable that these methods will continue to be encouraged from the top.
So how might it work? A relatively simple calculation shows how some of the DfE’s key measures can be brought together to estimate how many teachers are required. Taking the total number of pupils and dividing by the desired class size gives you the number of sessions that you need to offer. Dividing that by the teacher contact ratio then shows you the total FTE teachers that are required.
For example:
- School A has 1,500 pupils;
- if the desired class size is 27 pupils then we need 1,500/27 = 55.56 sessions; and
- if the contact ratio is set at 0.78 this means we need 55.56 / 0.78 = 71.2 FTE teachers.
In practice the calculations become more complicated as you start to take decisions to tailor the approach to your curriculum needs. This could include allowing different year groups or different subjects to have different class sizes (for example you may have larger classes in year 7 than year 11 or smaller classes in music than in English).
This method this is often referred to as a ‘bonus’. A positive bonus would mean putting on more sessions with classes that are smaller than the class size of 27 and vice versa. Balancing in this way enables schools to deliver subjects that may benefit from smaller groups, deliver subjects that may not otherwise be viable, or provide smaller classes for particular pupils. In this way the contact ratio and the bonus are central to this approach to workforce deployment.
The MATs that we have spoken to so far, and these are by no means a representative sample, have reported significant savings through taking a more structured approach to workforce planning – including turning around seven figure trust deficits.
There are challenges for implementing this across the system. It is more difficult to control variables such as the bonus – in essence the class size – in small schools, and it is difficult to translate some of the ideas to a primary or special school setting. It can also mean that additional pupils can ‘tip’ schools over the desired bonus leaving them looking less efficient and hence it might be a disincentive for schools to expand.
The approaches that we have seen are also largely focused on teachers rather than the wider workforce, in particular how teaching assistants are deployed and how wider pastoral care is delivered. These represent a significant proportion of school expenditure (about a fifth in primary schools and a tenth in secondary schools).
It is clear that the DfE sees this as one way to help schools address funding pressures and the potential savings to schools are large. While these approaches exclude a considerable amount of school spend, it does provide some indication as to the staffing requirements of any school and hence the levels of savings that could be found through changes to staff deployment. At the same time the DfE is right to highlight that any changes in staffing structures need to take account of workload and morale, and impacts on particular groups of teachers and pupils.
Ahead of next year’s spending review we will continue to develop our work programme on school funding and efficiency to examine how schools’ patterns of expenditure are evolving, whether benchmarking can identify further efficiencies, and the extent to which savings through changes to staff deployment might be achieved.
[1] J. Andrews & T Lawrence, ‘School funding pressures in England’, March 2018.
[2] DfE, ‘Government to fund pay rise for teachers’, July 2018.
[3] NAO, ‘The financial sustainability of schools’, December 2016.
[4] DfE, ‘School resource management: top 10 planning checks for governors’, May 2018.
