Blood from a stone

Okay, I had decided to go to bed and write this tomorrow, but having just heard Robert Peston on the news, having swallowed wholesale the nonsense about school back office costs, I decided I couldn’t wait.

Earlier today the Chancellor announced that certain departments would be asked to provide plans for cuts of 25% and 40%. One of the ‘facts’ he quoted in support of the idea that this was possible was that in some schools the spend on back-office support was £200 per child, whereas in others the spend was £1,400 per child. If only every school was able to be spending at the £200 level then think of the savings that could be made!

Obviously, it’s not that simple.

Firstly, one has to consider the figures. Quoting the ends of a range to exemplify a point is obviously a very useful thing to do when you are a politician. As a mathematician I would tell you that the range is only one measure of a population. After all, if 23,999 schools have a spend of £1,400 per child and it’s only one that has £200 then it is clear that the suggestion of huge savings is nonsense. Undoubtedly the truth lies some where between the extremes but until we know where then we don’t know what savings are possible.

Secondly, there is an assumption that the figures being quoted are at all comparable. Well, given that the main reason the DfE accounts have continually been qualified by the auditors is that they are unable to consolidate the school accounts correctly, this has to be in doubt. One of the reasons for that is a lack of consistent financial reporting. We used to have that, but now we don’t. Due, yes, you’ve guessed it, to the DfE mismanagement of the academy process. The problem here is that there is no way of knowing if the £200 includes the same things as the £1,400. How much of the difference between the two numbers is due to differences in accounting between the two schools? I’ll tell you – no one knows.

Thirdly, and I’m beginning to think that this is the one that will come as the biggest shock to the DfE, schools tend to be different to each other. I know! Who knew? This has a knock on effect in many different ways. For example, your average special school has relatively few children, along with relatively few teachers, but often tons of non-teaching staff. Interestingly, the back-office costs of these schools are likely to be more highly correlated with the number of staff members than they are with the number of children.

Now, I’m on record very clearly stating that schools can be more efficient. Obviously one of the ways to this efficiency is through technology, and I have no doubt that is what the chancellor has on his mind. Perhaps he has even read my blog on the subject, and if he hasn’t then perhaps he should. So I’m not going to suggest that there aren’t savings to be made. But I will say two things.

One, the “bull in the china shop”, £200 vs £1,400 approach is counter productive. People aren’t stupid and they will see the comparison is obviously nonsense and then be tempted to push back against any attempt at productivity and efficiency changes on the grounds that the DfE are being unrealistic.

Two, those schools that have developed efficient back-offices have done it over many years and, importantly, with considerable investment. And this is the bit that DfE will miss from the story. Technological efficiency requires investment (in things and in training). Failure to provide for the investment will prevent any change from occurring. And that is the real problem here, because, as I have said many times before, there is no money for investment.

And so we come back to the traditional British problem, which is this. Improved productivity relies on investment. Investment only occurs when the cost of the investment is less than the benefits of the investment. Investment in Britain tends to be made on a short term basis, requiring higher returns than most investments provide, which leads to less investment and fewer opportunities to improve productivity. In schools this is very much exacerbated by the annual budgeting process which does not encourage school financial planning beyond a 12 month horizon.

As part of its movement towards a fairer funding formula (and I have my doubts about that) it is essential that school financial planning is moved as well. So here’s a suggestion. Academy funding agreements are seven-year rolling contracts. If the treasury really wants to see efficiency in schools then it should set out its funding proposals for schools on a seven year rolling basis as well. I know the very idea of this will cause seizures in Whitehall, but if we want better productivity I can see no better way to achieve it.

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One thought on “Blood from a stone

  1. Great article. I would love to see whether there is a correlation between back-office spend and Ofsted rating.

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