I have been a teacher for 31 years, a head teacher for 16 years and, at the age of 55, this much I know about the challenges for early career headteachers: understanding the finances.

I am in my seventeenth year as a state school secondary head teacher. Recently I was interviewed by an organisation exploring the biggest challenges for early career head teachers. I began the interview with the knotty question, “What do you mean by head teacher?” We settled on the traditional definition of the head teacher who runs the school with a significant level of autonomy, both challenged and supported by a traditional governing body in a critical friend role.
I identified eight major challenges for early career head teachers:

  1. Forging your relationship with the chair of governors (CoG);
  2. Managing the fact that the buck stops with you;
  3. Understanding the finances;
  4. Establishing your core purpose;
  5. Being patient;
  6. Establishing a position on teaching & learning;
  7. Understanding change management;
  8. Coping with the loneliness.

In this current series of short blog posts, I am addressing each of these challenges and providing some tips which might help early career head teachers to overcome them. This post explores understanding the finances.
Understanding the finances

Back in the days when he was director-general of the BBC, I heard Greg Dyke say to an assembled audience of senior school leaders: “Don’t leave the money to anyone else, it’s too important.” It was one of the greatest pieces of advice I had ever heard. No matter how idealistic new headteachers might be, how determined they are that improving teaching and learning will always be the priority, if they don’t have a really good understanding of the money, they will come a cropper.
If you want to be a headteacher, ensure you have a great grasp of the budget and someone to manage it for you who knows what they are doing, preferably from a business background.
Things have changed remarkably since I began my first headship. Back in 2003, heads had a great deal of autonomy over school spending. Many modern headteachers have no direct responsibility for spending the school budget. Even if you have to apply to the Trust board to buy a box of paperclips, it is essential, as Dyke said, that you understand the budget and the relationship between decisions of spending the budget and students’ outcomes.
What I didn’t understand when I began as a headteacher was the hugely important relationship between your school budget and the education that you provide for the students who attract that money in the first place.
I soon learned. My first taste of headship came with the rather unsavoury task of balancing a budget. Before I was appointed, the governing body had already done their sums and predicted a £300,000 year-end budget deficit. They had made the irrevocable decision that we had to reduce most year groups by one whole teacher’s-worth of classes. It meant Set 4 and Set 5 being combined in certain subjects in a number of year groups.
It was then that I had my first glimpse of the educational impact of financial cuts: behaviour in those combined groups, especially in Year 9, was predictably shocking. It was absolute chaos.
Seven months later, the financial year end saw a £150,000 surplus. The governors had been £450,000 out in their financial predictions. Those classes hadn’t needed to be combined. Those students suffered because amateurs were in charge of the finances. I pledged not to let that happen again. I made a promise to learn how to run a multi-million-pound budget.
When it comes to understanding the school budget, nothing quite beats hands-on experience. Good headteachers trust their colleagues to manage budgets. I was lucky to work under Chris Bridge, a headteacher who gave me total responsibility (and accountability) for spending the erstwhile Technology College budget, some £150,000 p.a. It helped me understand finances and was the best preparation I could have had for the moment when I was responsible (along with the Governing body) for the whole school budget.
Developing great teachers is your priority. As school budgets tighten across the globe in this age of austerity, you have to resist the urge to squeeze every last hour of teaching out of your teachers; rather, you must give your teachers time and space to work on their practice and target the budget to allow that.
We have to stop guessing about what works. School budgets are getting tighter and tighter; consequently, it is even more important that every penny we have left to spend impacts positively upon improving the quality of teaching and through to student outcomes. So, focus on what the evidence says has the best chance of working.
So, here are my top five tips for early career head teachers for understanding the finances:

  1. Find a course which unpicks the relationship between curriculum planning and budget. There are good ones. Sam Ellis, ASCL’s erstwhile expert of all things budgetary, used to run such a programme. He was superb.
  2. Have a funding expert you meet once a week, and brief your trade union reps regularly on budget issues. A Finance manager needs to tell you warts and all what is happening with the budget. I have told mine I cannot tolerate budget surprises. Simple things like adding 3% for inflation, and calculating moves up the pay spine, all see your costs rise by significant sums annually. Ask your Finance manager to explain all these simple nuances to budget management.
  3. Keep in touch with all the DfE’s budget announcements. You have to work hard at this. It is hugely complicated, especially at the moment. Beware of pay increases which are only funded for one year by a special grant, which you might well have to pick up the tab for in the following year. Right now, at Huntington, we estimate that we might just receive an extra £200,000 p.a. if certain promised funding increases come to fruition, but it looks like our costs will increase by £240,000 p.a. when specific pay and pension grants cease. The DfE seems to ignore the fact that school budgets are impacted by rising costs – all we ever hear about are the so-called increases in funding, not how those increases are reduced in real terms by significant increases in costs. Be vigilant, and always budget for the worst case scenario.
  4. Understand the difference between revenue and capital. In revenue, the impact of a budget-related decision multiplies down the years, whether you are spending or cutting. If you cut staffing next year by 1 FTE teacher, that saves you c.£45,000 next year, and three years on it will have reduced your balance by c.£135,000. The reverse is true if you plan to have one extra teacher next year. Capital comprises one-off payments that do not, usually, have an impact beyond the year in which the spending takes place. Unless you are in a PFI contract
  5. In the end, ensure you have enough to pay the wages. The rest you can get by on, but the wages are the thing. Staffing is your biggest spending commitment. The thing is, if high quality teaching is the key to great student outcomes, then spending money on great staff is a good thing. Without great staff in front of students, aided by a great support staff team, you are going to struggle to provide the high quality education your students deserve. I have always appointed the best teacher on the day when recruiting – even if there was an almost as good cheaper one available.

And if I was allowed a sixth tip, it would be…treat your school’s money as preciously as if it were your own!

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