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It's not what you've got, but how you spend it

Five London boroughs took part in a study to compare how they use their budgets. Stephen Hoare reports on some unexpected results. You've rationalised staff and zero-base budgeted for your educational supplies; you keep promising to invest in information technology training but you need to take on another "point three" of a teacher for next year. You may be the best financial manager in the world, but there is no way you can magic money out of thin air. Or is there?

A slim booklet on benchmarking circulated to schools just before Christmas by the Department for Education and Employment might just change your life. Benchmarking enables schools to compare their spending per pupil on different budget items with similar schools. But it is not just about how much things cost; it also encourages schools to examine how effective their spending is.

Lyn Hayward head of Kender primary school is a convert to benchmarking. "The big question all headteachers need to have answered is how do we know we are making a difference to a child's education?" she says. "Benchmarking helps us judge whether we are offering value for money."

Jan Braisted, headteacher of Torridon Infants School, is equally enthusiastic. "It's about giving us confidence to be creative with our budgets."

Both headteachers, from the borough of Lewisham, took part in the pilot study described in the DFEE's benchmarking leaflet: a cost-comparison of 37 primary schools of broadly similar size, across five London education authorities: Lewisham, Wandsworth, Hammersmith and Fulham, Tower Hamlets and Croydon.

At first it was thought the exercise would produce some simple "best practice" formulae that could be applied to any school. But wide variations in spending patterns called for closer examination. People realised there were no "right answers" and that location and circumstances played a much larger part in school spending decisions than had been appreciated.

Heads are starting to realise that benchmarking has little if anything to do with cost cutting. Lyn Hayward says: "You can only hunt the margins for so long. We're into our fourth year of [local management of schools] and we've been through the simple cost savings like bricks in the water cisterns. Our high costs go on salaries and that's the bottom line."

Situated in New Cross, one of the most deprived areas of Lewisham, benchmarking has shown Kender Primary to be a high spender. But Ms Hayward claims the technique has helped her set budget priorities.

A higher than average phone bill is the result of the school's policy of ringing home on the first day of any absence, and a high level of contact with the local authority. And Ms Hayward employs six part-time meals supervisors who help her and her deputy keep order during the dinner hour. "We justify these costs by the fact we have few playground misdemeanors and few exclusions. Schools spending the least are not necessarily the most effective."

To make useful judgments about cost-effectiveness, schools also need to know something about comparative schools. So far, Lewisham is the only one of the five authorities to have widened the benchmarking to bring in free school meals, mobility rates, ethnic mix and reading test results. With 48 per cent of the roll on free school meals, a high level of mobility and a high proportion of ethnic minority pupils, Kender's biggest investment is in staff - 89 per cent of the school budget. Lyn Hayward says benchmarking has enabled her to feel quite comfortable with these sorts of figures.

"I felt more confident when I found out what other schools were doing, " she says. "We need all our experienced staff. You have to offset our staff costs against the fact that we've had no exclusions, and we have had a good [Office for Standards in Education] report which found that we had made improvements to our pupils' reading which is now at the national average."

Torridon School has different priorities. In a more prosperous part of the borough, headteacher Jan Braisted is using benchmarking to earmark money for long-term projects and pare down on other things. "It makes us more vigilant with energy costs and I see the need to plan to spend a certain amount each year on replacing computers and furniture as part of the school development plan," she explains.

Torridon, like other schools, is making increased use of classroom assistants. Lewisham advisory headteacher John Harrington says: "Through benchmarking we discovered the percentage spend on teachers is lower and the amount being spent per pupil on support staff is higher than we thought it would be. And we support this development."

Torridon has nine classroom assistants. Jan Braisted says: "They are an important literacy resource. With training, classroom assistants now help teachers by spending time in class helping teach children to read." But but she emphasises they would never replace classroom teachers with assistants.

The school has also come up with some creative uses for the assistants - one looks after the library, another the resources room - making sure the materials go into classes.

Lewisham, like the other authorities, is hoping its schools will continue talking to each other to take the benchmarking debate further. The borough collates school data in spreadsheets which compare budget and background figures without identifying schools. John Harrington says: "If the aim were to produce league tables you would never get the schools involved. Our aim is to get schools to start asking questions."

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