Funding updates: the checks that help schools stay in control

School and trust budgets are under sustained pressure. Falling pupil numbers, rising staffing costs and inflation across contracts mean financial planning needs to be earlier, clearer and more joined‑up than ever.

At SBS, we support schools and trusts to make confident decisions about where money goes next. We’ve set out the key checks that can help you stay in control as you plan ahead. None of these are silver bullets, but together, they create headroom and reduce surprises.

Start with pupil forecasts and look further ahead

Falling birth rates are no longer a future issue for primary schools. In many areas, reduced pupil numbers are already feeding through into lower income, while costs remain largely fixed.

Strong planning starts with:

• Reviewing pupil forecasts two to three years ahead
• Sense‑checking internal data against local authority insights on housing, demographics and migration
• Modelling scenarios early to understand when pressure will land and at what scale

The earlier you see the picture, the more options you have.

Re‑examine lettings income

Lettings income is easy to overlook, particularly where arrangements have been in place for years. Rising energy, cleaning and caretaking costs mean that what once covered its own costs may no longer do so.

Helpful checks include:

• When prices were last reviewed
• Whether charges fully reflect today’s costs
• Whether under‑used spaces could generate additional income

Even modest adjustments, applied consistently, can make a noticeable difference over a year.

Keep pensions under active review

For many schools, Local Government Pension Scheme (LGPS) contributions are one of the few areas easing pressure right now.

Recent valuations show schemes in a strong funding position, resulting in lower employer contribution rates for many schools. Contributions have typically fallen from around 20% to 15–18%, creating short‑term budget headroom. At our recent budget assumptions webinar, most attendees reported decreases, with reductions of 5% or more.

However, the picture is not consistent across the sector. LGPS rates still vary significantly by scheme and region, meaning some schools benefit far more than others.

The practical planning message is:

• Factor savings into medium‑term plans, not just current‑year budgets
• Avoid committing reductions to permanent spend
• Make sure leaders and boards understand that this relief is time‑limited

Where pressure has eased, the opportunity is to strengthen resilience rather than create new risks.

Supply teachers: tighter rules, better control

From September 2026, academy trusts will be required to procure agency supply staff through the Government Commercial Agency (GCA) Supply Teachers framework. The framework caps agency fees and brings greater transparency around costs, helping trusts avoid overpaying for supply.

This makes now the right time to:

• Review current supply arrangements
• Understand future compliance requirements
• Plan for contracts coming to an end

Some trusts are also choosing managed supply solutions aligned with recognised frameworks. SupplyBank, for example, now sits on the GCA framework and provides a fully managed service with transparent rates, vetted partners and consolidated reporting, helping trusts balance cost control with access to quality supply.

Check energy contracts early

Energy remains volatile, and schools that leave procurement too late often face rushed choices and poor value.

Good planning means:

• Checking contract end dates well in advance
• Avoiding default roll‑overs
• Taking time to weigh price certainty against flexibility
• Exploring DfE‑supported procurement routes where appropriate

Review contracts systematically, not reactively

Cleaning, catering, ICT, maintenance and professional services contracts may feel small in isolation, but together they make up a significant slice of non‑staff spend.

A simple contracts register can help:

• Flag renewal dates early
• Create space to challenge price increases
• Reduce the risk of expensive automatic renewals

For MATs, there is an added opportunity. Contract reviews are a good moment to:

• Identify services that individual schools have procured separately
• Consolidate these into a single trust‑wide arrangement
• Use collective spend to negotiate better rates and more consistent service

This kind of consolidation is often one of the simplest ways trusts can reduce cost without reducing provision.

Keep curriculum resource spend under control

Curriculum costs can quietly escalate, particularly where ordering is decentralised.

Schools often find savings by:

• Setting clear departmental budgets
• Checking existing stock before ordering new resources
• Sharing or re‑deploying resources across year groups or trust schools

Better visibility often leads to better use of what you already have.

Plan training and CPD costs with leadership

Leadership‑led training and CPD can represent a significant investment, particularly where external providers or trust‑wide programmes are involved.

Early conversations between finance teams and senior leaders help:

• Align professional development with budget capacity
• Avoid unplanned in‑year pressure
• Support longer‑term workforce planning

Where trusts are reviewing CPD provision, shared training platforms can also help improve value. For example, the SEG Skills Hub brings together accredited training across teaching, leadership and support roles, allowing trusts to plan development more strategically and make better use of group purchasing and consistent provision.

The key is visibility: knowing what is planned, when it will land, and how it supports workforce priorities.

Build inflation‑sensitive services into forecasts

Transport, catering and cleaning remain sensitive to inflation, particularly where contracts include annual uplifts. These increases need to be reflected in forward plans, not absorbed unexpectedly.

Supply costs also remain unpredictable. Using prior‑year spend as a starting point and adjusting for known pressures is often more realistic than assuming costs will fall away.

Don’t miss hidden spend or funded support

Planned ICT upgrades, estates projects and compliance works often surface late in the budget cycle. Regular check‑ins with ICT and premises teams help reduce last‑minute pressure.

At the same time, funded initiatives such as the national rollout of DfE‑funded free breakfast clubs can help offset costs schools may already be carrying, while directly supporting pupils and families.

Strong financial planning isn’t about finding one big saving. It’s about making clear decisions across lots of smaller areas – earlier, and with confidence. These checks help schools and trusts stay in control, protect sustainability and keep the focus where it belongs: on pupils, staff and long‑term outcomes.

Our team of finance consultants all have real life experience in education finance and can support on short-term or long-term projects and SLAs. Our aim is to help schools make confident decisions on where they spend their budget. Find out more about how our finance services and consultancy can help your school or trust. 

SBS Finance Services

Authored by Kelly Crawford
Finance Service Lead

Kelly is a CIMA-qualified accountant and former MAT CFO who joined School Business Services in 2022 as a Senior Finance Consultant. In this role, she helped clients streamline financial processes and produce accurate financial information to support decision-making.

Connect with Kelly Crawford