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The Purse Strings of Power

July 22nd, 2009

I am going to write about money. You can’t get very far without it. The way that it is handled, from the Treasury downwards, has to be a very powerful management tool. It has been a powerful force implementing the policy of inclusion. As the ‘good book’ says “The Lord giveth and the Lord taketh away.”
Don’t underestimate the role of the Treasury.  Death of a Nightingale explores the area where control should stop and participation begin.  As you read what follows you may wonder whether the one does stop and whether the other actually does begin.

These are just some of the proposals I made as a governor in 2004.
* The Budget approved by the Governing Body should be included in or attached to the minutes of the meeting where it is agreed. The Budget should anticipate all anticipated income and expenditure, capital and revenue, affecting the school for the year in question.

* No changes should be made to the budget without the agreement of Governing Body recorded in the minutes.

* Indicative Budgets should always be presented to the Finance Sub-Committee and then the Governing Body, as well as to head teachers, in time for its contents to be questioned and, if necessary, amended. It should be presented alongside the budget and the performance up date for the current year.

* The Finance Committee should review - at least termly- the capital and revenue income and expenditure accounts compared against budget and previous year’s spend with a note of variance at the time. The variance should not be variance against total budget spend for the year as a whole. Any variance of more than say 5% shall be reported to the termly meeting of the Governing Body.

* A system of accruals that is the norm in business accounting should be adopted as soon as possible.

Should I have had to recommend these things? The setting and monitoring of budgets is key to any enterprise. It should be the easiest thing in the world to organise. It is, after all, simply money IN and money OUT. In my working life I have been involved with many budgets, but as a governor I actually had to ask a chartered accountant to explain to me how the LEA had put its figures together.
Does the Treasury really want to encourage participation? Do they? Does anyone?

Over the years I have come across many very worthy charities from bereavement counseling to work with deprived families. Every year each one of them goes out with a begging bowl just to survive. Professional carers have to spend their valuable time trying to raise money. They all had one thing in common. They had no core funding. Larger charities have no such problem, and they don’t worry about it.
This situation is going to get worse not better as public expenditure is cut, and the nation feels itself poorer and needs become greater.

Around the country Community Foundations help donors identify well run charities to which their charitable donations can be given and they make a genuine difference to people’s lives. They have grown rapidly in recent years. There are now 55 of them, and they can reach 95% of the UK’s population. They already make grants of about £70m every year. The State should provide these Foundations with matched funding to enable them to allocate core funding to selected charities.
It is going to become increasingly evident that the State does not have the resources to make necessary social provision on its own. Social provision should be seen as a working partnership between the State and charities, and the State needs to put its money where its mouth is. It says that it cares.

‘Make money work better’ would be a good mission statement, especially in times of financial stringency. This would be one sure way.

Likewise running schools needs to be seen as a working partnership between the State and Governors who give their time and their know how without payment.
Will they stop the pretence that they are creating partnerships and will they actively encourage participation? I wonder.