Advice for schools looking into the ‘hardship fund’

Advice for schools looking into the ‘hardship fund’

The Government has unveiled a £40 million “hardship fund” aimed at assisting local authority-maintained schools (just in 35 areas) to afford a 6.5 per cent teacher pay rise – this support is only available for one year.

The fund is part of the Government’s teacher pay deal, designed to aid schools facing significant financial challenges, particularly smaller and special schools that might find the pay rise unaffordable on an individual basis.

Half of this fund, £20 million, is allocated to academies, which can seek additional support from the Education and Skills Funding Agency.

The other half is reserved for schools managed by councils, specifically targeting local authorities where school-level deficits exceed one per cent of their total school income.

Liverpool, North Tyneside, and Worcestershire are among the few set to receive more than £1 million from this package.

The Department for Education (DfE) has given local authorities considerable leeway in how they distribute this funding, emphasising that it should be allocated on a case-by-case basis to schools in dire need, not necessarily those with deficits due to the teacher pay award alone.

However, the DfE has also made clear that there are no plans to extend similar support into the next financial year, placing schools in a position where they must absorb the additional costs without further Government aid.

Councils are urged to use this funding transparently, with expectations to report on their allocations in meetings with the school’s forum.

In response to the limited and one-off nature of the Government’s hardship fund, schools should adopt a proactive and strategic approach to safeguard their finances.

Here are several steps schools can take to protect their financial health:

  • Budget review and adjustment: Schools should conduct a thorough review of their current budgets, identifying areas where they can make savings without compromising the quality of education. This might involve reallocating resources to prioritise essential spending or postponing non-critical projects.
  • Financial forecasting: Engage in detailed financial forecasting to understand the long-term implications of the teacher pay rise and other financial pressures. Forecasting can help schools plan for future deficits and surpluses, enabling better financial decisions.
  • Diversifying income: Explore opportunities to diversify income sources. This could include renting out school facilities, applying for grants, establishing partnerships with local businesses, or fundraising activities involving the wider community.
  • Cost-sharing and collaboration: Collaborate with other schools to share costs on procurement, staff training, and resources. Economies of scale can lead to significant savings, reducing individual schools’ financial burdens.
  • Efficiency improvements: Identify opportunities to improve operational efficiency, such as reducing energy costs, implementing paperless administration, or optimising staffing structures. Small efficiencies can lead to significant savings over time.
  • Stakeholder engagement: Engage with stakeholders, including parents, local businesses, and the community, to garner support. This could involve seeking donations, volunteer support, or sponsorship deals that can offset some operational costs.
  • Advocacy and lobbying: Schools can join forces to lobby the Government for additional funding or more sustainable financial policies. This might involve working with educational unions, local government representatives, or national education bodies to advocate for the needs of schools.
  • Professional advice: Consider seeking advice from financial professionals who can provide tailored advice on managing school finances effectively and strategically planning for future challenges.

By taking these steps, schools can better navigate the financial challenges posed by the one-off hardship fund and the broader context of educational funding, ensuring they remain financially viable while continuing to deliver high-quality education.

If you’d like to receive further financial advice and support from an experienced and qualified accountant, please contact one of our team.

Advice for schools looking into the ‘hardship fund’
Advice for schools looking into the ‘hardship fund’