The concept of efficiency

There was a strong and consistent response that being efficient meant getting the most out of the money available to give children the best quality of education.

Many schools also thought that an overall efficiency indicator, reflecting this concept of efficiency, would be a useful tool for schools to gauge how efficiently they were operating. This meant dividing a measure of attainment by the cost per-pupil. Some thought that we could simply use the value-added score as the attainment measure, while others felt it would be more helpful to be able to compare against similar schools.

Definition of school efficiency

 Efficiency is generally defined as the rate at which organisations turn inputs (financial and other resources) into outputs or outcomes. An organisation can become more efficient by producing more outputs with the same level of input; producing the same output with fewer inputs; or by a combination of both. We have defined school efficiency as the relationship between how much progress pupils make at the school (the ‘output’) and how much income the school receives (the ‘input’). We have chosen value added as the output and income per pupil as the input.

How schools achieve efficiencies with SILVERSPOON ?

All the schools were involved in some form of clustering, working with other schools in some form, such as:

  • regular contacts and exchange visits with other schools;
  • taking advantage of and, in some cases establishing, networking opportunities with other head teachers and business managers to share best practice;
  • sharing benchmarking data with neighbouring schools, whether facilitated by the local authority or the schools themselves;
  • sharing business manager expertise with neighbouring schools that do not have the capacity;
  • sharing teaching and other facilities with neighbouring schools, to broaden the range of opportunities available to children by achieving economies of scale; and
  • participating in collaborative buying consortia, to reduce the costs involved in the procurement process itself and negotiating better deals through exercising combined buying power.

The schools were strong advocates of various forms of benchmarking and mentioned:

using benchmarking data on attainment and spend to see how they match up nationally and against statistical neighbors

using more localized benchmarking data, where they had a better understanding of the context of the other schools involved;

using pricing benchmarking data for common areas of spend, so that they could be sure that they are not paying over the odds; and

establishing the performance of potential contractors through contacts with other schools.

All the schools routinely carried out market testing, in some cases using it to negotiate better deals with existing suppliers, including local authorities. Some schools with more developed procurement practices also focused closely on contractual terms and conditions; and were strong on contract management, in some cases withholding payment when suppliers did not deliver contractual requirements.

Typically the schools budget prudently and withhold a proportion of the budget from departments at the start of the year, requiring them to bid for additional money on the basis of robust business cases. This helped to promote a culture of value for money, in the process giving departmental heads the opportunity to develop their business, as well as teaching, skills.

Some schools generated significant additional income through creative private lettings of the school premises, subject to the limitations of the site.

The schools pointed out the value of an able and dedicated business manager as part of the senior leadership team with a good understanding of the school’s strategic direction, with strong backing from a head teacher equally committed to efficiency.

Spend on teaching staff is by far the largest part of the budget, with support staff generally the next highest. So managing workforce effectively is key to overall efficiency and pupil outcomes. The schools stressed the importance of planning. Many of them have multi-year strategic plans which they update regularly, as well as annual plans. Having clear workforce plans and structures allows them to react effectively when staff leave, not automatically making like-for-like replacements, but taking advantage of the opportunity to move where possible to their preferred structures without the need for costly and disruptive redundancy programmes.

A theme of the visits was keeping down spend on support staff and agency staff to maximise spending on qualified teachers. Schools also stressed the importance of timetabling, class sizes, and using spare capacity effectively to maximize use of resources. A number of schools share classes where practical, to give pupils greater choice and take advantage of spare capacity.

They used the existing pay flexibilities as part of performance management, and thought the further flexibilities being introduced could also be useful.

The schools were aware of the evidence about what works for workforce deployment.

One head teacher said that he takes an afternoon off a few times a year to review academic research at the local university; while another was concerned about being bombarded with too much low value research but thought that some meta-study bringing together all the key evidence would be more useful.


Barriers to efficiency

Some schools did not mention any barriers – while providing information was a burden they could see the justification for it as they were spending public money. The barriers other schools mentioned included:

  • lack of capacity and capability for small schools;
  • geographical restrictions making collaboration more challenging;
  • lack of expert knowledge in areas such as ICT to take the best-informed decisions; and
  • inefficient and inadequate premises.

Although outside the scope of this review, some also mentioned having to deal with different financial and academic years, and late notice of budget allocations.

Motivations and incentives

All schools mentioned providing the best education they could for their children and the associated publication of attainment and Offset inspections. Governors who provided effective challenge were also a key motivator. Many of the schools said that they had encouraged governors to be more challenging in a number of ways such as appointing people with strong finance and commercial skills, encouraging and providing training, and simply telling them to be more challenging.