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exploring income generation in schools - defining income generation

9 June 2014

Download a full copy of the report here

Read another section of the report:

defining income generation

necessity v distraction

leading from the front

capacity is key

sweating your assets

sharing good practice

Financial efficiency within schools covers two main areas of activity. Firstly generating savings through employing existing resources more effectively, for example by deploying teaching staff and learning resources more efficiently, streamlining back office functions, reducing insurance premiums and improved procurement practices. The second is through income generation - creating opportunities using existing and new resources to generate additional revenue streams that can be added to traditional funding to further a school’s objectives.

However successful income generation can mean different things to different schools. To some the benefit is measured in terms of improved educational outcomes. Alternatively, there will be instances where the benefit  is purely financial and the additional monies generated can be measured in terms of the cost of a teacher’s salary or similar.

In pure revenue terms the best income generation was identified as being ‘passive’ income which is income that once set up, will continue to be generated without significant further effort; an excellent example being feed in tariffs from solar panels. This is the sort of income that is clearly different from the traditional fundraising activities for a specific purpose.

Case Study

St Teath CP Trust School in Cornwall has 75 children on roll. The school would like to expand their capacity through an additional classroom but have been told by their local authority that there is no funding available for this sort of capital investment. Ironically, because the school has featured positively in its latest Ofsted report, there is no pressing concern about the current arrangements although it is recognised by all concerned that the situation is less than ideal.

In order to take matters into their own hands the school has been making enquiries about borrowing money against the anticipated income from solar panels. The Carbon Trust report held by the school suggests that the school would raise £176,000 in FIT and RHI over a 20 year period. The commercial finance company Siemens are in principle happy to proceed along this route and the Trust has confirmed that it is within its powers to enter into the arrangements on the schools behalf.

By proceeding this way, the school’s finances are separate from those of the Trust and the two are separate legal entities. The risk of the borrowing is consequently removed from the school.

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