At this year’s MATPN conference, School Business Services Senior Finance Consultant Amy Phillips delivered a keynote that resonated strongly with trust leaders navigating one of the most challenging financial periods the sector has faced. Her session, The Good, The Bad and The Deficit, explored what effective budget setting looks like, the pitfalls trusts should avoid, and the sector‑wide trends shaping financial strategy for 2026/27 and beyond.
Amy’s extensive experience supporting MATs across the country gives her a unique vantage point on the pressures that trusts are facing, and the practical steps that can make a meaningful difference.
“Effective budgeting isn’t about predicting the future, it’s about preparing for it.” — Amy Phillips, Senior Finance Consultant, SBS
What Good Budget Setting Looks Like
Strong budget setting is proactive, collaborative, and grounded in strategic intent. Amy highlighted several characteristics of effective practice:
Scenario planning that reflects reality
Trusts benefit from preparing multiple scenarios; constrained, moderate, and optimistic, to understand the range of possible outcomes and plan accordingly.
Clear roles and responsibilities
Defining who does what early in the process prevents confusion and ensures accountability throughout the budgeting cycle.
Open, honest communication
Transparent conversations between finance teams, school leaders, and trustees help ensure everyone is aligned and working toward the same priorities.
Budgets linked to strategic plans
Whether it’s School Improvement Plans, Estates strategies, or IT roadmaps, budgets should reflect how the trust intends to deliver for pupils.
Explaining year‑on‑year variances
Providing clear notes for LGBs and Trustees builds confidence and helps decision‑makers understand what has changed and why.
Using sector guidance
Organisations such as ISBL and CST offer valuable benchmarking and assumptions that can strengthen the accuracy of budget planning. SBS also proudly offers events and webinars to support schools with budget planning and preparation, such as the annual Budget Assumptions webinar.
What Bad Budget Setting Looks Like
Amy also explored the common pitfalls that can undermine financial sustainability:
“We’ve always done it that way”
Relying on legacy processes can prevent trusts from identifying opportunities to improve efficiency or accuracy.
Over‑optimism or avoidance
The mindset of “it’ll all come out in the wash” rarely holds true. Early identification of issues gives trusts time to act.
Only one scenario
Without ‘what if’ modelling, trusts lose flexibility and risk being blindsided by change.
Poor communication
Mixed messages, unclear responsibilities, and siloed working can lead to frustration and misaligned decision‑making.
Sector Trends: What Trusts Are Experiencing Right Now
Across the trusts SBS supports, Amy is seeing a varied picture:
- Some MATs are expecting both budgeted and forecasted deficits
- Others are forecasting deficits despite currently holding surpluses
- Some are forecasting small surpluses, having made efficiency savings in-year, but for many, this is often with a view to re-building depleted reserves
- Mid‑year is proving a crucial time to review in-year performance against budget and to plan ahead. How will what we know in 25/26 help to shape 26-27 and beyond?
This mid‑year review is particularly valuable as trusts begin preparing for their 2026/27 budgets, ensuring assumptions remain relevant and realistic.
Strategies to Mitigate Deficits
Amy shared several practical measures trusts can take to strengthen their financial position:
Maximising income
- Ensuring pupil numbers and funding are accurately reflected
- Strengthening in‑house catering through quality and promotion
- Increasing uptake of wraparound care and clubs
- Encouraging targeted parental contributions
- Running fundraising linked to specific, pupil‑focused projects such as outdoor initiatives
Using ICFP metrics with context
ICFP is a powerful tool, but only when interpreted thoughtfully and applied to each school’s unique circumstances.
Leveraging national services
These can support trusts in making cost‑effective, compliant decisions.
Timely and regular re‑forecasting
Understanding what is happening in reality, not just what was approved months ago, allows trusts to address anomalies early and plan more effectively for the next budget cycle.
Tackling Falling Pupil Numbers
One of the biggest drivers of deficits is the national decline in birth rates, leading to increased competition for pupils. Amy outlined several strategies trusts are using to respond:
Stronger marketing and visibility
Schools are vibrant, inspiring places, but they need to tell that story. Open events, social media activity, school videos, and community engagement all help families understand what makes a school special.
Human connection
Events like “meet the teacher” or “meet the headteacher” can be powerful. People remain a school’s greatest asset.
Adjusting PAN where necessary
Some schools are reducing their Published Admission Number to ensure long‑term sustainability.
- Primary: from 60 to 45 or even 30
- Secondary: from 240 to 180 or 150
While not ideal, this can be the right strategic move. ICFP modelling is essential to support the process.
Looking Ahead
Budgeting in the current climate is undeniably challenging, but as Amy emphasised at MATPN, trusts are not powerless. With clear processes, honest communication, strategic alignment, and regular re‑forecasting, MATs can navigate uncertainty with confidence.
At School Business Services, our team of experienced finance consultants work alongside trusts across the country to strengthen financial planning, improve processes, and support long‑term sustainability.
If your trust would benefit from expert guidance on budgeting, forecasting, or ICFP, we’re here to help.
Authored by Amy Phillips
Senior Finance Consultant
Amy Phillips is a Senior Finance Consultant at School Business Services, supporting schools, academies and Multi‑Academy Trusts across the country. With 17 years of accountancy experience, including a decade working directly within the education sector, she specialises in budgeting, forecasting, financial reporting, and coaching School Business Professionals.
Having held finance roles in secondary, primary and MAT settings, Amy brings valuable on‑the‑ground insight to her consultancy work. She is known for her empathetic, practical approach and her ability to guide teams through complex financial challenges with clarity and confidence.
Amy holds a First‑Class Honours degree in Business Management, the CIPFA Certificate in Financial Reporting for Academies, and the CIPFA Diploma in School Financial and Operational Leadership. These were all achieved through part‑time study alongside her professional roles.
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