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So you think you can start your own school?

Categories : HomeOur WorldPolitics

One of the key policy announcements of the Queen’s speech this week was the announcement that parents would be able to set up “free schools” which they can run themselves. If you wanted to set up a school for your and your neighbours' kids, what would be the financial implications? We talked to a school governor to understand how current school budgets worked and to see if this could give us any insights into whether 5, 10 or 15 kids would be necessary for your school to make it feasible. The governor's school is a primary school. It is fairly big for a primary school with around 800 pupils. In the current financial year it was given just under £2.8 million by the local authority to operate the school, with around £420k for pupils that need special support and £470k grants to improve educational quality. This totals £3.7 million. With 800 pupils this gives just over £4,500 per pupil. This sounds like a lot – but how is it spent? The following chart shows the breakdown of spending in the school budget: -



Direct staff It will not surprise you to know that the biggest area of spending is teaching staff. This comes in a number of different flavours. Firstly there is the class teacher – 4 forms of entry and 7 years gives 28 of them working the school (an average of more than 28 pupils per teacher). However you need more than 1 teacher per class. Teachers are now entitled to get 5% of their working time away from their class to allow them to catch up with any planning, preparation and assessment work (PPA) that needs to be done. In addition, some of these teachers also have other responsibilities such as leading one or more years, or being curriculum area leaders. They also need time away from class to perform these parts of their roles. Most schools will have extra staff who will cover for this PPA and management time – often in the form of teachers that specialise in subjects such as music or PE. In this school there are 3 such full time teachers as well as others who come in for part time. As well as this we also have the head, deputy head and assistant head staff (depending on the size of the school). This school has 1 head and 2 full time assistant heads. Smaller schools could well have a part-time deputy or assistant who teaches as well as fulfils a management role. However, teachers are only around 66% of the direct staff budget. The next biggest part of the direct teaching area is Learning Support Assistants (LSAs). These are people who do not have quite the same qualifications as teachers, but who still have some skill and training in educating children. They assist the teacher, particularly in taking small groups that are either behind or ahead of the rest of the group. Also in this budget area is contingency for agency staff and insurance to cover for the times when your staff get sick (or cannot return to school due to being abroad when the airspace closes for volcanic ash reasons)! Do it yourself? Let’s say that you want to set-up a small primary school yourself for the kids of you and your neighbours. Of course the government has not released any details about how their scheme would work, however it if were similar to the current school funding system, would your small school be feasible? The Local Authority (LA) would probably give you more than the £4,500 per pupil, however not too much more – studies have shown that even if the LA uses other formula to drive school funding, these other formula are themselves largely dependant on pupil numbers. Assuming that the LA is generous you might get £5,000 per pupil. How many pupils would you need to make your ‘school’ viable? Assuming that your school is fairly small you will need a teacher. It will need to be a fairly good teacher as they will have to teach pupils from a range of ages, and they will also have to develop all of the curriculum themselves. Such a teacher would probably cost you in the order of £50,000 once pensions and national insurance are taken into account. To save money your neighbour is going to act as the LSA – nice to see that they have so much time. Also you will house the school in your own house. School dinners will be home cooked as approved by Jamie. You will still need to pay maintenance on your premises as well as rates and insurance and other legal minimum standards –this could cost £5,000 per year. You will also need some professional help, from specialist staff to help set up the environment to accountants to assist with the accounts. Coming to is another £5,000 per year. You will need to buy educational resources. In the school above this works out at around £350 per pupil for books, pencils, printed sheets, computer equipment etc. However you will not get the same terms, and you will also have to spend more in the early years to buy some of the specialist resources that will last you for a few years. So this could be as high as £500 per pupil. The final result is shown in the table below: -



So the answer to the question posed above is, if you have 5 or 10 pupils your ‘school’ will make a loss. However 15 pupils should be enough to set a valid budget. All you have to worry about now is Ofsted! .

About the author

Jonathan Chadwick
Jonathan Chadwick
Jon has worked for 18 years as an analytical consultant in the UK, USA and Europe for a diverse range of sectors, most recently Financial, Oil & Gas and Government. Jon has extensive experience in benefits realisation, modelling, business analytics, portfolio management and change management. Jon devised and created Figure It Out.

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