Filling the funding gap

22nd June 2018 at 00:00
As budgets are squeezed, entrepreneurial headteachers – or ‘headtrepreneurs’ – are turning to business donations and sponsorship to help them balance the books. But is this something all schools can replicate – and should they even try? Simon Creasey reports

I was brought up on Only Fools and Horses, so I learned the need to be able to sell – and sell big I do,” explains Chris Dyson, headteacher at Parklands Primary School in Seacroft, Leeds. Dyson is the self-proclaimed “market leader” in getting extra money, resources and free “stuff” for his school. By his estimate, it would equate to a spend by the school of around £300,000 per year.

“The kids never contribute even a penny to their education; everything is sponsored and sold,” he says. “And the extra I can bring in is essential to the budget.”

Such a cash injection would be crucial to any school budget at the moment. According to School Cuts, a website run collaboratively by the teaching unions, £2.8 billion has been sliced off school budgets since 2015, £45,400 is the average cut to primary schools and £185,200 is the average to secondary schools.

One headteacher, who wishes to remain anonymous, says the figures just don’t add up anymore: “School budgets are a disaster, it is impossible to run a school simply on what the government will give you now.”

 

Hence, it is not just Dyson who is filling the funding gap with his own revenue streams. Some headteachers are renting out their facilities and buildings, others sell their staff’s professional expertise, while many take Dyson’s approach of drumming up donations and money from local businesses.

While schools have always sought out extra cash through spring fetes and quiz evenings, and rented out a building for a local society meeting or birthday party, what we are seeing from some schools now is, according to many, on a completely different scale.

So how many of these ‘headtrepreneurs’ are there, what are the rules around schools generating income, what are the moral decisions that need to be considered, and how replicable or easy is it to do what they do?

And there is arguably a more important question: should they be attempting to fill the gap left by the government at all?

Season of goodwill

Dyson has been headteacher at Parklands for three years. The school is in an area of high deprivation and his fundraising efforts began by the Christmas of his first year. “It broke my heart when I found out that only 12 families had been to see Santa because they never go off the estate,” recalls Dyson. “So I thought, ‘I’ll bring Santa to you’.”

He didn’t have any surplus funds within the school budget that he could tap into, so he reached out to local businesses and asked for donations. As soon as he managed to get a couple of businesses on board, the situation rapidly – and rather aptly – snowballed, and within a fortnight he received goods and services to the value of £15,000. The hunt for donations soon became a full-time pursuit.

“So residentials, PE kits, water bottles, breakfast club, after-school clubs, all school trips – these are all now funded through businesses,” says Dyson. “The donations enable me to give experiences to children that budget constraints would forbid, and the children can have the educational experience that they deserve.

“It’s part of the job – getting £300,000 a year in keeps class [numbers] at 17 and makes the children and staff very happy.”

Other schools take a different tack to filling the funding gap. Tor Bridge High, in Plymouth, hires out its sports facilities to members of the local community on weekday evenings and at the weekends.

It has also hired out its performing arts centre to the Pauline Quirke Academy for the past five years.

“The facilities are used by the academy every Saturday morning and [this] promotes the school while at the same time generating income,” says Ann Anstis, finance director at Tor Bridge. “On average, our hire of facilities generates an annual income in the region of £85,000.”

In addition, the school rented out an unused part of its playing field to a housing developer who was undertaking work on land adjacent to the campus and the same piece of land was also rented to a local supermarket that was being refurbished. In return for using the land, the supermarket paid for the refurbishment of two food technology rooms at the school.

Reach Academy Feltham also uses its facilities as a revenue stream.

“We are very fortunate to have a new build and raise around £100,000 a year in lettings to a range of community groups, language and dance schools and churches,” explains principal Ed Vainker.

Staff expertise is another commodity that some schools are turning into a revenue stream. There are schools that are hiring out their IT departments to local businesses, while at Tor Bridge High, the school is “currently developing pastoral alternatives to exclusion services that we can sell to other schools in the area,” explains senior leader Ruth Golding.

In the special school sector, expertise is also becoming more of a saleable commodity. With the numbers of children with special education needs and disability increasing in mainstream schools – and with that figure set to rise even further – several special schools are looking at offering SEND-focused CPD to mainstream colleagues.

It all sounds simple, but is it really that easy to make all this revenue generation happen?

According to Dyson, it’s not that difficult to persuade businesses and organisations to donate to schools – you just have to approach people in the right way. His high-profile Twitter account – and relentless dialogue with big firms through that – is a very public face of the work he does offline, too.

“What you shouldn’t do is write an email and copy in 3,000 businesses asking for something,” says Dyson. “I make it personal. I find out who it is that I need to speak to at a business – who is the community liaison person? Then I invite them into the school and I make them feel valued and special. I don’t ask them for any money. I show them around and I show them the dream.”

More often than not, these businesses are happy to offer up something, usually in return for just a little bit of positive publicity.

“Take the banks,” says Dyson. “After 10 years of negative publicity, they can’t do enough to get involved with schools.”

Building relationships

Dyson also recently reached out to a construction company that was doing some work on a site in the vicinity.

“A lot of schools will know this already but when you have a new housing development, they [the developers] have a pot of money that they have to give to schools and charities within a five-mile radius, so they’re the first people I always tap into.”

In this particular instance, he wrote a speculative letter to the managing director of the company and cheekily suggested that they send their apprentices to the school so that they could paint the classrooms.

“They loved the idea so much they shut down the development for two days and the entire workplace came in and painted the whole school,” says Dyson.

“You have got to dedicate the time and effort to shift that boulder, but when it starts moving, it gathers speed and it’s like a snowball getting bigger and bigger because everyone wants to be part of it,” he says.

As for renting out your facilities, Anstis advises finding ways to keep costs low.

“We try to rationalise our staffing of the facilities as much as possible to minimise our staffing costs,” she says. “One way of achieving this is to look at regular, long-term users and nominate them to become ‘approved keyholders’. This means that they are able to unlock/lock up the premises themselves, which negates the need for staff to be on site.”

Vainker adds: “For it to yield good income, you need to be renting out multiple spaces at a time, and so getting started is expensive and requires some flexibility in staffing”.

Matthew Wolton, an education specialist partner at law firm Knights 1759, says that a popular route is to hand over the management to an external organisation. “There are companies out there who effectively take on the management of five-a-side football pitches outside of school hours,” he explains. “They run them commercially and a pay a very good figure for doing that and the school just takes the money.”

There are, however, complications to consider – logistical, legal and ethical – when hiring out facilities and services, or accepting donations. Wolton says that headteachers should always look at what the potential risks might be from a legal perspective and ensure that appropriate protections are in place.

For instance, schools that allow external groups to come in and use the facilities should get these arrangements approved by the school’s insurance company to ensure these activities are fully covered.

He explains that one option that has proven particularly popular in the academy sector is the creation of subsidiary trading companies, which protect academy trusts should any issues occur with an additional service that it operates. “For instance, if you have a big sports centre with a swimming pool and you want to run it as a commercial operation, what you don’t want to happen is for an accident to occur and then you get a big personal injury claim that goes against the academy,” he explains.

“However, if you operate the commercial operation through a subsidiary trading company, you can insulate the school against any blowback risk. You can also minimise any issues with tax by gifting all of the profit generated from the subsidiary company back to the charity or academy trust.”

Another potential issue that Wolton identifies, this time with donations, is particularly pertinent to academies: related-party transactions. These transactions can sometimes occur when the academy has trustees – who will often be local business people – who try to give something back to the school through the business they run.

In such circumstances total transparency is vital to ensure there is no suggestion that something inappropriate has occurred.

Even with such checks, some heads are still wary of donations. “If a business wanted to donate £100,000 to us on a purely gifted basis, I would happily accept it,” says Tim Gibbs, headteacher at Reepham High school in Norfolk. “[But] as soon as this donation started to clash in any way with the ethos and aims of the comprehensive school that we are, I would be uneasy.

“As a school, I believe you have to do the right thing all the time; we set an example not only to our pupils but to the entire community, and schools have a huge influence on the development of individuals’ and communities’ sense of what is right and what is wrong.”

He adds that, for many headteachers, there just isn’t the time to commit to raising the cash responsibly. “I have no problem with schools who somehow manage to raise funds from businesses, although this is not something I would, on a practical level, have time to work on,” he says.

Position to negotiate

Others believe you have to be the right type of person or school, with a big enough profile (Dyson has 11,000 followers on Twitter and has appeared on television and radio), to get those kinds of offers in the first place.

Jamie Barry, headteacher at Parsons Street Primary School, says that, despite his best efforts, the success of the likes of Dyson is just not replicable for every headteacher.

“I often write to companies to try to get what we can,” he says.

“Unfortunately, I’m not as lucky as some headteachers I know but I always try my best. I’ll do whatever I can as head to provide the best for my children.”

Simon Smith, headteacher at East Whitby Academy, agrees with Barry and Gibbs. “There are elements, personally, that I would struggle with, though we do it on a smaller scale. I struggle with the idea of endorsement and promotion of others’ businesses – that’s a personal thing. So, I suppose it comes down to where you draw your line.”

As for letting your school’s buildings out, there are also more general issues apart from the legal considerations. For example: do you have buildings that anyone would actually want to rent? “It’s all very well if you are a leafy secondary school with a lovely sports hall, lovely grounds and a nice Victorian building, but there will be plenty of schools who have no real means of generating additional funding,” says Wolton.

Vainker concedes this may be an issue, but argues that most schools do have usable spaces if you think through different uses. “We are fortunate to be on the outskirts of London and to be a new school with a new building, so that helps enormously,” he says. “However, a lot of different spaces can be rented out – for example, language schools use classrooms at the weekend.”

Yet Gibbs says that, for many schools, the customers are often simply not there. “There is not a great demand for our facilities as we are in rural Norfolk,” he says. “We could pay someone to market what we have but I am unwilling to use public money to pay for that. I would have ethical concerns over using money that could be used to place, say, an learning support assistant in classrooms supporting our pupils being used to market our facilities, even if there was a chance we could benefit financially in the future.”

And Bill Lord, headteacher at Long Sutton Primary and interim executive head of the Federation of Gedney Church End and Lutton St Nicholas Schools, adds that the proximity of other schools can also prove to be problematic. “We are so close to our local secondary, which has a leisure centre and so is set up for evenings and weekend lettings. We have not been able to bring in very much funding at all.

“There are no issues for us in them doing it. They are in a strong position to offer a lot more than us,” he says.

There is also a moral angle to this debate that, as more schools take this option, may increasingly become an issue. Schools and their buildings are funded by the government and have a remit to serve the community, so do they have a moral right to charge that community to use those buildings?

David Moran, chief executive of the E-Act academy chain, argues that school buildings should not be a revenue stream. He says that they should be a resource at cost price for the community the school serves.

“For us, it’s about making our buildings available to the community where there is demand – and we do this at cost to cover any staffing needs,” says Moran. “This shouldn’t be about creating a revenue stream, but instead playing an important role in the local community.”

Vainker counters, though, that it should not be an either/or situation. “I definitely think that schools have a responsibility to be at the heart of the community,” he says. “We have a number of community groups and charities that use our space for free and I think that is absolutely right. However, there is a space for fees and it is up to schools to offer a competitive package to prospective renters.”

Clearly, the donations and extra revenue streams are not as simple as they first look. And it appears that the level of extra cash you can bring in as a school through hiring out your services or facilities is dependent on numerous factors, many of which are not in your control. Meanwhile, with donations, it seems heavily dependent on the headteacher and there is the added issue that if every school in an area all tried to tap up the local businesses, as Dyson does, the slice per school would be much lower or the business might just say no to everyone.

As Julia Harnden, funding specialist at the Association of School and College Leaders, says: “It’s just not feasible for all schools to generate a significant additional income stream.” She adds that there is a serious factor in this discussion that needs close attention, too: is all this revenue generation letting the Department for Education off the hook?

“Yes, you should always use your assets and your financial acumen to the best of your ability but, from our point of view, there is a concern if people feel that they must do this to balance the budget,” she says.

Unfortunately, that is exactly what those doing it now say is the case. “There is a budget crisis and we would be in trouble if we weren’t getting all of this extra money in,” admits Dyson.

Vainker agrees: “Two or three years ago, this was nice to have and funded residential trips and other enrichment. Increasingly, this income is funding the more foundational elements of the school.”

Considering the disparity in schools’ ability to generate extra income, there is a danger here of creating a two-tier system, where some schools are able to maintain the education offering owing to the luck of their buildings and location, or the skillset or profile of their headteacher, while many others cannot. The repercussions of that are broad and substantial, touching on everything from pupil intake and recruitment to results and SEND provision.

Of course, those headteachers who are able to generate income will always do so in order to give their students the best education possible. But many heads argue the reality for most schools is that the funding gap simply cannot be met with donations or additional revenue streams, that savings have to be made, and that financial pressures do mean that children are getting a worse education due to a lack of money. And that cannot continue, they say.

Vic Goddard, headteacher at Passmores Academy, argues that schools have a duty to their students not to hide the strains they are under. “We can keep arbitrarily making cuts but I cannot accept that this generation of young people deserve less support, bigger classes and fewer resources. We’ll be told to make it balance but when is enough, enough? We have to be brave and put in the deficit budgets that are the reality of the situation.

“Until we do, they will keep saying that we can cope. Coping is not enough for my young people. Heads need governors and trustees to do all they can to help make ends meet but must be bold in not harming students futures when we simply cannot justify the experience they are getting. Be brave in saying enough is enough.”

Barry adds that the fact schools are having to raise cash themselves shows just how broken the system has become. “The reality for my school, and most others, is that we ask our parents and carers for more donations than ever before,” he says.

“We haven’t got money to subsidise in the way we have before so these donations are vital, but it does put a pressure on families.

“I think it’s a sad state of affairs that heads have to beg and borrow what they can to fill the funding gap left by the DfE.”


Simon Creasey is a freelance journalist

 

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