Financial Strategy. June 2015

Financial Strategy

June 2015

For consultation at LAT Business Committee

Date approved and adopted by LAT Business Committee

Date to be reviewed:

Responsible Officer:

25

th

June 2015

25

th

June 2015

June 2017

Finance Director

Financial Strategy

Purpose

1. The purpose of this policy is to confirm principles relating the financial strategy of the Longfield Academy Trust. This policy will underpin the Finance Policy which details the operational financial procedures.

Background

2. Since the inception of the Longfield Academy Trust the schools have been largely excluded from any significant funding cuts, which have been experienced by the majority of the public sector. The early indications are that the next comprehensive spending review period will see real term funding cuts within the education sector as a whole.

3. The Department of Education has stated the perfect storm scenario in relation to schools budgets. This is due to increases in employer’s pensions and national insurance contributions, inflationary pay increases for staff, other non-staffing inflationary costs whilst funding for schools is receiving no inflationary increases. In addition to this pressure locally there will be further reductions as

increases in early years and high needs funding blocks will mean a reduction in funding available for the schools block. In essence the Longfield Academy Trust’s schools will be required to do more for less over the life time of the next comprehensive spending review period. As we move into this new era of reduced resource within education, a strategy is required to under pin this transition.

Financial Strategy

4. It is proposed that over the life of the comprehensive spending review period the Longfield Academy Trust will:-

a. Continue to rigorously pursue external grants, via the schools external funding groups. Grants will only be accepted though where there is an either financial or educational benefit for the pupils.

b. Continue to maximise external income. This includes funding from external lettings, research projects, consultancy advice and training.

c. Continue to promote the Trust’s schools as schools of choice within Darlington. As a higher percentage of funding is allocated to schools based on pupil numbers it becomes even more important that all of the schools pupil admission numbers are reached on an annual basis. d. Identify local companies or developers, to seek sponsorship arrangements.

e. Maximise funding options to reduce the environmental impact of the schools.

f. Continue to drive down all costs, with full regard to quality and the effect of pupils learning experience.

g. Strive to increase the size of the trust to share the cost of back office costs and increase the educational improvement capacity within the Trust.

h. Review benchmarking data and pupil to staff ratios, both internally and in comparison to our peers. Benchmarking does not provide clear answers, but helps to underpin decisions. i. Ensure that the individual schools risk registers are relevant and up to date and are reflected

in the medium term financial plan.

j. Continuously reviewing all staffing levels across the trust, ensuring that educational outcomes are not affected.

k.

All schools within the trust must have a surplus reserves balance at the end of each year within its medium term financial plan. (3 years plus current). Reducing reserves over the medium term is acceptable and is to be encouraged as it is a way of avoiding redundancies.

l.

If an individual school is unable to produce a medium term financial plan and requires to temporarily borrow funds from elsewhere within the Trust, a robust recovery plan must be in

circumstances the Accounting Officer may decide to take away delegation of budgets until such time that reserves are in surplus.

m. If schools are unable to produce a surplus budget over the medium term staff may be invited to voluntary reduce their hours/working days or take a period of unpaid sabbatical. Making an application to vary staff working condition does not automatically mean that it will be approved. The Trust will ensure that approving any request is in the best interests of the pupil’s educational experience.

n. The head teachers /finance director will present to the Business Committee at the earliest opportunity options for securing efficiency savings over the medium term.

o. The trust recognises that making redundancy payments to staff is the last resort and all the above options will explored before this occurs.

Role of Directors/Governors

5. The Directors/Governors of the Longfield Academy Trust will be responsible for approving the overall financial strategy, receiving update reports on progress against the above strategy and ensuring that at the highest level the Longfield Academy Trust is solvent

Longfield Academy Trust – Leadership Team

6. The Longfield Academy Trust Leadership Team are responsible for following the approved financial strategy, for close management of the budget position of both the individual schools and the

Appendix 1

Strategy Longfield DSMS Rydal

Continue to rigorously pursue external grants, via the schools external funding groups. Grants will only be accepted though where there is an either financial or

educational benefit for the pupils.

External funding group in place. Successful to date securing grants many various grants. Refresh required for the external funding group though.

Some external grants secured. Refresh and refocus of external funding group.

Some external grants secured. Further work on developing

relationships between teaching staff and

finance director/assistant finance director. Further possibilities to be

explored specifically to fund a new school hall. Continue to maximise

external income. This includes funding from external lettings, research projects, consultancy advice and training

Significant amount of funding in place at Longfield. Infrastructure and ethos in place. To continue to build on existing success.

Some lettings being achieved, further possibilities.

Limited external bookings. Limited possibilities for funding to make a significant difference to revenue budget.

Continue to promote the Trust’s schools as schools of choice within Darlington. As a higher percentage of funding is allocated to schools based on pupil numbers it becomes even more important that all of the schools pupil admission numbers are reached on an annual basis

Longfield is over-subscribed and has no current issues attracting pupils

Additional pupil numbers required to allow the school budget to become totally sustainable over the medium term.

No issues with attracting pupil at Rydal.

Reputation of the school improving.

Identify local companies or developers, to seek sponsorship

arrangements.

Limited progress Limited progress Limited progress

Maximise funding options to reduce the environmental impact of the schools.

Solar panels, new roof, new windows, new heating system all in place.

New roof, new windows, new heating system all in place.

New roofing planned for summer.

Continue to drive down all costs, with full regard to quality and the effect of pupils learning experience.

All back office costs being reviewed, tender processes.

All back office costs being reviewed, tender processes.

All back office costs being reviewed, tender processes.

Strive to increase the size of the trust to share the cost of back office costs and increase the educational

improvement capacity within the Trust.

Further work required with Board of Directors.

Further work required with Board of Directors.

Further work required with Board of Directors.

Review benchmarking data and pupil to staff ratios, both internally and in comparison to our peers. Benchmarking does not provide clear answers, but helps to underpin decisions

Benchmarking being used both within the trust and across the Academy sector.

Benchmarking being used both within the trust and across the Academy sector. Pupil to staff ratios worryingly high, especially SLT to pupil ratio.

Benchmarking

undertaken across the primary sector.

Ensure that the individual schools risk registers are relevant and up to date and are reflected in the medium term financial plan

Completed and updated on a termly basis.

Completed and updated on a termly basis.

Completed and updated on a termly basis.

Continuously reviewing all staffing levels across the trust, ensuring that educational outcomes are not affected.

Every time a member of staff levels, structures are reviewed. Efficiency savings not required at the moment.

Review of structures when member of staff leaves. Additional savings would make the DSMS budget look more comfortable.

Every time a member of staff levels, structures reviewed. Efficiency savings not required at the moment.

All schools within the trust must have a

surplus reserves balance at the end of each year within its medium term financial plan. (3 years plus current). Reducing reserves over the medium term is acceptable and is to be encouraged as it is a way of avoiding redundancies.

Reserves still projected at end of third year of plan.

Low level of reserves identified during the lifetime of the medium term financial plan. High risk position.

Low level of reserves identified at the end of the medium term financial plan.

If an individual school is unable to produce a medium term financial plan and requires to temporarily borrow funds from elsewhere within the Trust, a robust recovery plan must be in place and this must be approved by the

Business Committee of the Trust. In such circumstances the Accounting Officer may decide to take away delegation of budgets until such time that

reserves are in surplus.

Balanced budget produced at Longfield, no required need to borrow funds from within the trust.

Although balanced budget is in place, there is a risk that DSMS’s budget may go into deficit.

Balanced budget produced at Rydal, no required need to borrow funds from within the trust.

If schools are unable to produce a surplus budget over the medium term staff may be invited to voluntary reduce their hours/working days or take a period of unpaid sabbatical. Making an application to vary staff working condition does not automatically mean that it will be accepted. The Trust will ensure that approving any request is in the best interests of the pupil’s educational experience.

As above As above As above

The head teachers /finance director will present to the Business Committee at the earliest opportunity options for securing efficiency savings over the medium term.

To be further developed To be further developed To be further developed

The trust recognises that making redundancy payments to staff is the last resort and all the above options will explored before this occurs.

Requirement for redundancies unlikely

Risk that redundancies may be required.

Requirement for redundancies unlikely