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Exploring income generation in schools

9 June 2014

This report reflects on a number of themes and messages that came out of a round table discussion between a group of education leaders including school business managers, head teachers, representatives of the NGA, NASBM and education marketing, about income generation in schools and academies.

To summarise these included:

  •  income generation is being actively pursued by many schools looking to offset the growing pressures on school budgets; those prepared to explore opportunities at this stage could well benefit from being early entrants into the local market
  • there is a fear that income generation can be a distraction from a school’s core purpose but with effective planning and implementation, it can and does provide much needed resources to enable the school to maintain and enhance the high quality educational provision that we all hope to deliver
  • projects need the full support and engagement of the school business manager, the head teacher and governing body
  • the starting point for a school or group of schools is to look at the capital resources available to them. Any new venture must also be underpinned by detailed research and a robust business plan
  • it is important that schools find the means of generating capacity regardless of whether they are targeting the internal or external market
  • professional advice at an early stage will help with business and tax planning to ensure ventures start off on a solid foundation
  • at present school business manager qualifications are not regarded as being fit for purpose by many and need to be driven by the needs of the schools themselves with a greater emphasis on commerce and business management
  • private sector input and professional support in the form of business mentors who understand the sector could help with a new approach to income generation
  • schools should look to link income generation with the curriculum or student and staff development, whenever possible.

Read a specific section of the report: defining income generation | necessity v distraction | leading from the front | capacity is key | sweating your assets | sharing good practice

Download a full copy of the report here

Report background...

The Institute of Fiscal Studies (IFS) has estimated that public spending on education in the UK will have fallen by 3.5% per year in real terms between 2010–11 and 2014–15. According to the IFS this would represent the largest cut in education spending over any four-year period since at least the 1950s. With income levels for many schools flatlining at best and infrastructure and staffing costs on the rise, schools are increasingly having to tighten their belts and seek innovative ways of generating additional income.

It was a message recently reiterated by Lord Nash, speaking at the Academies Show in April, reminding delegates to start preparing for “flat line revenues which, bearing in mind that schools are having to do so much more, means they have to start thinking out of the box in terms of their financial management.”

The trend towards actively exploring fresh income streams was also identified in Browne Jacobson’s 2013 leadership survey of academy and maintained schools which revealed that over half of school leaders surveyed (58%) at the time were less or significantly less optimistic about their financial prospects compared to six months earlier. Not surprisingly a similar number (59%) stated raising additional income would be a priority in the next 12 months. And it is this issue that we turn to in our latest thought leadership discussion.

As one of the leading education law firms in the country, our track record in working in the sector spans over ten years and we have an established client base of more than 800 education organisations. The education sector is used to change but the extent and speed with which it is currently being introduced is particularly challenging.

In order to understand and monitor the reaction of the sector to some of the major changes, Browne Jacobson has been carrying out a series of round table discussions to capture the concerns, challenges and opportunities that sector leaders have identified. The topic of income generation is the third in the series.

Browne Jacobson is very grateful to all the education leaders who generously participated in the event and contributed to a stimulating discussion. Whilst this paper seeks to capture the nature of the discussions, it does not necessarily set out the views of any of these individuals or the organisations they are connected to.

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