How to plan a school budget when you are not a finance person

Sooner or later, almost every school leader has to learn how to plan a school budget. For many of us, that moment arrives with a promotion rather than any training. You were appointed because you understand teaching and people, and suddenly you are responsible for a spreadsheet full of codes, lines and totals that someone else built years ago.

Does that mean you need to become an accountant? It does not. You need to understand what the money is for, ask good questions and make decisions you can explain.

Start with priorities, not last year's numbers

The easiest way to plan a budget is to copy last year's figures and add a little for inflation. It is also the way most schools end up spending money on things that no longer matter.

Before you open the spreadsheet, write down the three or four things your school or department is trying to achieve next year. Then ask a simple question of every significant line. Does this help us get there? If the honest answer is no, that line deserves a conversation.

This is the single most useful habit I can suggest. A budget is not really a financial document. It is a statement of what you believe matters, written in numbers.

How to plan a school budget, step by step

Know your income. Find out where your money comes from and how certain it is. Fees, funding, grants and lettings all behave differently. Plan on the figure you are confident of, not the one you hope for.

Understand your staffing costs. In most schools, staff are by far the largest cost. Ask your finance colleague to show you how salaries, increments and any changes to contracts are built into the figures. Small decisions about staffing often have a bigger effect than everything else put together.

Separate fixed from flexible. Some costs, such as utilities or contracts, are hard to change in the short term. Others, such as resources, trips or training, are choices. Knowing which is which shows you where you actually have room to make decisions.

Build in a contingency. Something unexpected will happen. A roof will leak or a piece of equipment will fail. A sensible reserve is not wasted money. It protects your priorities when the surprise arrives.

Plan for more than one year. A decision that looks affordable this year may not be next year. Ask what each commitment will cost over three years before you agree to it.

Make the budget a shared conversation

The best budgets I have seen were not written by one person in a closed office. Heads of department understood how their allocation was decided. Governors or boards could see how spending linked to the school's plan. Staff knew why some requests were approved and others were not.

Work closely with your bursar or finance manager, too. Ask them to explain anything you do not understand, and do not pretend to follow a figure when you are lost. Over more than twenty years in education, I have found that finance colleagues are usually delighted when a leader asks good questions, because it means the budget is being taken seriously.

Finally, review the budget during the year, not only at the end. A short monthly look at spending against plan will tell you early if something is drifting, while there is still time to act.

So here is a question to take into your next budget meeting. If someone asked you to explain how each of your biggest spending lines supports your priorities, could you do it in a sentence?

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