3 ways to utilise financial benchmarking data

Financial benchmarking gives us an indication of areas to focus on. It doesn’t give us the answers.

Earlier this week I had the pleasure of presenting alongside Carl Fagan from the Department for Education at The Academies Show in Birmingham, on the subject of schools financial benchmarking.

For those of you who weren’t able to make the session but were interested in the subject here are my experiences that I shared on the day.

I have to say well done to the team at the Department for Education for the work that they have done to improve the benchmarking tool. I think it looks great and is a much better user experience. I think we all find it a challenge how long it takes to process and publish the information but they are accepting of this and I am sure it will improve in the future. It takes time to process data and it is a huge task. Change takes time.

I did record a vlog of this presentation but I am not brave enough to share it yet. I did share it with some School Business Leaders and I asked them for some advice on how I could improve, because I think I am ok at presenting, but I can certainly improve. The only way that is going to happen is if I practice and get feedback to help me develop my skills.

I am sure that I didn’t say all of this, in these exact words, but this is version of my speech…

” Good morning, my name is Hayley Dunn and I am the Finance Director of a Multi Academy Trust in South Staffordshire. I am a qualified accountant and a Fellow of the recently re-branded NASBM, which is now called ISBL – The Institute of School Business Leadership.

I am going to share with you 3 ways which I have used benchmarking data in practice.

It is really important to remember that benchmarking data doesn’t give us the answers, but it does give us a starting point by highlighting the areas to focus on. It is not a tool to use to hold leaders accountable.

So, the 3 ways that I have used benchmarking are:

  1. In schools as part of the annual cycle of financial processes and procedures
  2. As a research tool when applying for a position
  3. As a due diligence tool as part of the MAT growth strategy

Firstly, I use it within my own schools as part of my normal annual financial processes and procedures. By highlighting the areas that are significantly above or below the average.

On one occasion this highlighted catering as looking high. We looked in to this further, did some investigating. Once we had all the information I wrote a report that was presented to the Governing Board.

It is really important that it is not just the business manager or finance staff who are engaging with this date, your senior leadership team and Governing Board, need to have an awareness and an understanding. The same way that I would expect the Senior Leadership Team (including the School Business Leader) and Governing Board to be engaging with pupil performance and progress data.

It is also good practice to offer a session each year for any of the Governors who want to go through it in detail, because often the board won’t all be financially skilled.

Secondly, when I decided to apply for the position of Finance Director, part of my due diligence on checking them out was to look at their data. It is a really great way to prepare for an interview. It is publicly available information and can give you a flavor of their income and expenditure.

If you are asked what you know about the organisation, you can refer to the data and for example, say “I can see from your benchmarking data that you are generating income” and from your website I can see that is from “Rental Income”; and “I think you could increase that income by linking with local sports clubs”. It demonstrates that you are already understanding how the organisation runs.

Thirdly, now in my role of Finance Director, as we look to grow our Multi Academy Trust it is a useful tool to use as part of due diligence.

I also want to mention to you, the Department for Education’s metric tool, Carl isn’t doing a demo of that today, but it is a really useful tool.

It takes your school and groups it with 49 other schools. It gives you an indication of your schools efficiency. Based on pupil attainment and the money the school receives for pupils. It also ranks that list. This may give you a different data set to use for information gathering. If you are near the top of the list, that is great, if not you can research to see what other schools are doing that you could consider trying.

My top tip!

Benchmarking is useful as an indicator, but what I found more useful as a School Business Manager was working with a peer group to get behind the data in to more detailed analysis. 

A small group of school business managers from a similar area, with a similar demographic and look at detailed information. For example, how much you pay for a ream of paper, how much you pay for energy, how you deal with cover, what your staffing structure looks like, what your business support staff structure looks like, etc and get in to some real detailed conversations.

That is something I would really encourage you to think about doing.”

The benchmarking and metric tool are available free from the Department for Education, along with lots of other useful information:

https://www.gov.uk/government/collections/schools-financial-health-and-efficiency

I am now keeping an eye on the developments that the Department for Education are working on like the pilot of the Schools Buying Hubs, because I believe collaboration is the way forward. We are not in competition with each other and we need to work together to improve the outcomes for all pupils.

#BeTheChange

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