Budget Crisis: Six suggestions to help reduce annual spend

By Charlotte James, Business Development Assistant, Room 12

As schools and colleges are now some way into the autumn term, major concerns continue to loom regarding the current lack of sufficient funding, alongside ongoing substantial price rises for energy and other goods.

Naturally, we all want to see schools and colleges thrive, and as a company that specialises in education funding, all of us at Room 12 work hard to help make this happen.  So, it has been worrying to hear that this could be at risk due to the financial strain schools have been put under. 

Room 12 is always on hand to offer support to any schools that could benefit from our expertise, so we’ve put together some suggestions for how school leaders can reduce their annual spend, both in the current academic year and in future:

1.    Funding: Condition Improvement Fund (CIF) grant or loan for eligible projects
The government’s Condition Improvement Fund (CIF) allows eligible voluntary-aided schools, academies, and sixth form colleges to apply for capital funding to support building condition or expansion projects. This could offer much needed financial support for schools to complete essential building maintenance projects, as well as giving schools funding to support expansion projects.

However, schools should be aware that funding is not guaranteed and only around half of applicants secure funding each year. Even when applications are successful, applicants often do not receive the same amount of money as they had requested, as collectively, successful applicants only secured 36.4% of the funding requested

Additionally, academies and sixth form colleges can take out a CIF loan, for all or part of the project costs in their application, to demonstrate their commitment to the scheme. This allows eligible schools to pay towards the project, at a ratio that suits their budget. The loans are provided at Public Works Loan Board rates of interest. 

Applying for a loan in the application is likely to increase the school or college’s chances of being awarded funding as they will be eligible for additional points under the Project Cost criterion. However, the Department for Education makes it clear that Project Need is the most important criterion.

Yet, even when schools apply for a partial or full loan for the project costs, many applications are still unsuccessful. In response to our freedom of information request, the Department for Education disclosed that just 301 of the 639 project applications were successfully awarded a loan in 2022-23. 

2.    Lease equipment
We know many schools have been forced to completely rethink their budgets for 2022/23. For some, this will mean money set aside for new equipment will have had to have been cut. This will sadly put a halt to lots of great projects. 

However, there are other options. Compliant leasing enables schools to spread the payments for equipment over several years, so planned projects can go ahead without delay. Affordable, fixed payments can be agreed based on each school’s needs, enabling school leaders to easily manage their budget. 

Compliantly leasing equipment also means schools can reserve capital for essential maintenance. For example, if a school was unsuccessful in applying for a CIF grant or loan, they could make the decision to lease their new equipment and use the capital they have available to carry out the repairs immediately. 

3.    Use frameworks to get best value for money
Frameworks give schools assurance that approved suppliers of goods and services have been quality checked and provide value for money. 

For example, Everything ICT is an ICT procurement framework for education and other public sector organisations. This framework works with over 150 trusted suppliers to get schools the best deal on their required equipment. 

4.    Sale-and-leaseback
As the current financial pressures on the education sector have come unexpectedly, schools may have previously purchased equipment over the summer period but have now found that the money could be better spent elsewhere. 

Instead of having to cut spending, schools can sell their equipment to Room 12, who will then immediately lease the equipment back. This allows schools to release their capital and spread payments over several years. 

5. Install LED lighting
LED lighting could be used as a solution to reduce electricity bills as it significantly reduces consumption. LED lights are up to 80% more efficient than traditional lighting, meaning schools can achieve the same light quality at a far lower cost. 

Additionally, LED lights last up to six times longer than other types of lights, reducing the need for frequent replacements. 

Of course, we are aware that installing LED lighting can be expensive and may seem out of reach due to restricted budgets. However, it can be affordable through a compliant lease, as this allows schools to spread the cost over several years. This means schools pay for the lighting as they are making savings on their electricity bills. 

6. Install solar panels
Schools can also reduce their electricity bills by installing solar panels, as this allows settings to generate their own electricity. This would not only be a great investment for the short term during the current energy crisis, but also in the long term as the cost savings will benefit the school for over 25 years. 

Solar panels can also reduce the school’s carbon footprint and provide a way for the school to model sustainable behaviour. This ‘live’ example of renewable technology could inspire the whole community and improve engagement in learning about sustainability. 

Like LEDs, solar panels can also be compliantly leased, allowing schools to spread the cost over several years.
We hope these ideas and advice help empower school and college leaders to overcome the tough financial pressures placed on their shoulders and continue to provide the best education for students. 

By Charlotte James, Business Development Assistant at Room 12, an ASCL Preferred Supplier 

Posted: 19/10/2022 12:03:27