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Growing the bottom line

28 August 2014

The reality of continued reductions in school funding is universally recognised. A further 10 reduction is anticipated in the next 3 years. If we accept that excellent learning outcomes cost money, then logically the more reduced the schools income stream, the harder it will be for them to achieve the results expected of them. Against this background income generation is becoming viewed as an increasing necessity where schools need to find alternative income streams.

Thinking outside the box

School income generation is where a school creates revenue from its activities. This may be by saving money through smarter and more effective procurement systems, perhaps through cooperative or collaborative behaviour with other schools. This is something that most schools have started to address and represents a relatively quick and easy gain. The more adventurous schools have started to look at additional income generation from their assets, be their site and buildings, their services or their knowledge capital gathered from expertise and experience.

Why would schools consider income generation at a time when there is so much pressure on them to achieve high academic performance from their students? For some head teachers the two elements are entwined, not separate. If business is the engine that drives sustainable teaching outcomes then it is a necessity. If the financial rewards of thinking entrepreneurially are sufficient then business activity becomes increasingly attractive and the result worth the effort. The actual figure at which this happens will be different for each school and will depend upon its circumstances.

The income can be passive income, which is the sort of arrangement that once set up continues to bring in money with little on going effort or more one off activities. An example of passive income is where a primary maintained Trust school in Cornwall is looking at the possibility of borrowing against the prospective income from solar panels, in order to finance an additional classroom that the local authority cannot fund. If a commercial lender has the understanding of the sector it is doing business with, opportunities can be found. There are also opportunities for one off events or regular events such as using sports facilities to run holiday camps during the summer holidays. Schools could make good venues for weddings where the budget is more limited and the numbers of guests high.

A holistic approach

Not all income generation only results in revenue in terms of pounds and pence.

It is also possible that income generation could offer career development opportunities for staff and provide possible performance measurements, adding to the reputation of the school. Income generation might enable the school to build links with the local business community, providing business exchange as well as work experience opportunities. The links between education and business is not always embraced but in a world which is increasingly commercial income generation is an area that should be considered seriously.

Taking the lead

School business managers are key players and probably the most important people in schools to identify the opportunities available to their particular school and scope out a business case. The calibre of school business managers varies and the need for additional and on-going training and support is critical. Strong leadership from head teachers is crucial and not always up front. It requires a head teacher who fully embraces the concept for it to be successful.

Governor support

It is not a governors role to devise a business plan but it is their role to scrutinise the plan that the school business manager puts in front of them and to ask challenging questions both in respect of the financial health of the plan but also the wider impact and outcomes for the school. It is also incumbent upon governors to challenge their schools as to how they are planning to deal with reducing financial budgets and what else is going to be put in place to make up for the revenue reduction.

It may well be that the first step is to work more efficiently and collaboratively through better procurement practices with other schools and cutting out unnecessary expenses but will that be enough and what about the growth and development of the schools vision; can this blossom on its own or would it benefit from some assistance? If the governors have a skills set that would be beneficial to a school looking to explore the income generation route then they should be exploited as a resource of information, experience and contacts.

Governors need to consider their role and their responsibilities with respect to regulation and compliance, constitutional documents and property ownership but maybe it is time that governors looked at the possibility of thinking more outside the box than they have been used to doing. As schools are facing the brave new world and having to make changes to their thinking, perhaps governors should be too.

This article was first published in Education Executive

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