Schools financial value standard (SFVS)
Support notes
SectionC:valueformoney
Q14.Benchmarking
Doestheschoolbenchmarkitsincomeandexpenditureannuallyagainstthatofsimilarschoolsandinvestigatefurtherwhereanycategoryappearstobeoutofline?
Part1:whatdoesthequestionmean?
Whatisbenchmarkingandwhyisitimportant?
Benchmarkingisaprocessforcomparing incomeand expenditurein detailwith thatofsimilarschoolsto considerwhetherandhowyourschool canuse resourcesbetterandidentifywhere changescanbemade.This processshould be undertakenannually,butbenchmarkingcan alsobe carriedoutatanytimewhen reviewingschool contractsforprocuringgoodsandservices. Schoolsshould reporttheirfindingsfrombenchmarking tothegoverning body.
Whatinformationshouldschoolsusetobenchmarktheirincomeandexpenditure?
Allmaintainedschoolssubmittheirincome andexpendituredata usingthe ConsistentFinancialReporting(CFR) framework.This standardisedsetofcodes enablesmaintainedschools tocomparetheirincomeandexpenditurewiththatofsimilarschools.Schools’can producesimple chartsandreportsforgovernorstoshow howtheirmoneyisspentincomparison tootherschools.Some localauthoritiesprovidetheirownbenchmarkingdata aswell.
Whydoschoolsneedtobenchmarkagainstsimilarschools?
Sothatmeaningfulcomparisonscanbe madewhen comparingincome andexpenditure.Ifa schoolcomparesitselfto allschoolsor a randomgroup then thedifferencesare likelytoreflecttheschools’differentcircumstances,suchasproportionsofdeprived pupils,ratherthanhelptheschool identifyways tosecurebettervalueformoney. Importantly,schools canbenchmarkeffectivelyagainstschoolswhosecharacteristicsdiffer to somedegree–youdo notneeda setof“identical”schoolstomake meaningfulcomparisons.
Part2:goodpractice
Allschoolsshouldensuretheyarebenchmarkingeffectively
Schools shouldusebenchmarking asacontributing factorto:
- planningandmanaging theirbudget
- identifyingareas andsettingtargets forimproveduseofresources
- achievingvalueformoneyin expenditure and improving itseffectivenesstoimproveperformance
- deliveringeducationalservicestoadefined standard
Benchmarkingyourincomeand expenditure canhelp createacycle ofcontinuousimprovementand develop a culturewhere itiseasier to question the normandmakechanges. Benchmarking is notusedsolelytofocus onreducing costs,butalsotoimprovethequalityand impactoftheschool’sservices. Benchmarkingcanbe mosteffective when done incollaborationwith otherschools,andcanbeused asatool forimprovingorbringing aboutchangeandraising standards.
Selectingtherightschoolstobenchmarkagainst
Youshouldselectacohortofschoolsbasedonyour ownschool’scharacteristics.Youshouldbe selecting“like forlike” togeta betterunderstandingofyourschool’s incomeand expenditureandthatofotherschoolsinyourbenchmarkset.Thecharacteristicsofyourselected setshouldallow sound comparisons to bemade,enable you to askquestionsaboutdifferentcategoriesofincomeandspend andencourageconstructivediscussions with comparatorschoolstohelpyourschoolmakechangesin performanceover time.Typicalparametersforselectionwould includearea,schoolsizeandpercentageofdeprivedpupils.
Interpretingthechartdataforyourschoolandothers
Careshouldbetaken when interpretingcomparativeincomeandexpenditure data.Thisinformationdescribesthepositionofaschool relativetoothers –itdoesnotexplainwhyaschool is inthisposition orindicatewhetheritshouldbe. There maybegood reasonsfor aschooltohave relativelyhighor low figures.What isimportantisthatthe schoolreviewsthe differences,questionsthereasonsforthemandaimstomake changeswhere there arenotadequatereasonsfortheirincome orspending beingoutofline in aparticularcategory.
Part3:whatdoyoudoifthingsarenotrightinyourschool?
Whattodoifyourschooldoesnotregularlybenchmark
Theschoolshouldbegintobenchmarkimmediately.InformationabouttheSchoolsFinancialBenchmarkingwebsiteformaintainedschoolsisinthefurtherinformationsectionbelowandyourlocal authorityisalso asourceofadvice onbenchmarking.Asallschools are responsible forspending large amountsofpublicmoneyeach year,theyneed todemonstrate valueformoneytoparents,auditorsand regulatorsby showing thatthismoneyis being well spenttoachieve thebestoutcomesfortheirpupils.
Whattodoifacategoryofspendappearstobeoutofline
First,you shouldconsiderwhetheryour school has particularcircumstancesthatcreatevalidreasonsforthis.Ifthere arenot,you should considerwhatfactorshave ledto thisand then how the useoftheseresourcescanbeimproved inthefuture.
Furtherinformation
Thereare a numberofsourcesthatmaintained schoolscan usetobeginorimprovetheiruseofbenchmarking.
GOV.UK- youcanaccessinformationonthesupportinglegalframeworkforschoolrevenuefunding,includingrequirementsforbestvalue in localauthorityschemesforfinancingschools.Pleaserefer toparagraph2.4oftheguidance on local authorityschemesforfinancing schools.
Schools FinancialBenchmarking- contains dataforallmaintainedschools.Thewebsiteprovidesdatathatreflectsthe incomeand expenditurecodesthatschoolsuseto submittheirannualCFR returns andenablescomparisons to bemadewith othersimilarschools.Datacurrentlyonthewebsiteisfor2013- 2014.Guidanceonhowtouse thewebsitecanbe locatedbyclickingon theHelp button. The websitekeeps data forthelast5 financialyearsandsoschoolsand local authoritiesthatlog on will beable to viewtheir historicaldata.Schools cannot benchmarktheir historicaldatawithotherschools.
Local authority–schoolscancontacttheirlocalauthoritytoobtain anybenchmarkingdatatheyhave.This usuallyrelates toschoolswithin asingle authorityandsocan becomparable and easyto interpret.Schoolscouldfocus ondatarelatingtoaparticularareaofconcern.