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Free article: What are the financial implications of the lockdown?

Published: Monday, 24 August 2020 13:18

The financial and business implications of a pandemic lockdown are something that schools, academies and colleges have never had to deal with before. We’re still in the early stages of understanding what the long-term impact will be. Beverley Dowsett sets out her predictions.

Summary points

  • There will have been additional costs for schools over the past few months due to the Covid-19 pandemic lockdown, but also some savings.
  • Some of the costs incurred will continue into the long term.
  • Although at the moment we are largely planning for the unknown, there are some practical steps that the SBM can take.

The past few months have seen schools dealing with uncertainty, confusion and mixed messages. This is not the ideal context for school business managers to carve out budgets and financial plans. Considering the endless possibilities makes a budget-setting process or a re-forecast of a budget the most complicated process in the lifetime of most schools.

What is clear is that, with no concrete guidelines for the next couple of years, budgets are going to have to be flexible and adaptable to the current requirements and any future restrictions the government will impose for the virus to be controlled. Looking at current budgets there are a number of areas that will need to be kept under review and the financial impact considered.

Although SBMs will be most anxious about potential additional costs, it is also important to remember that over the past few months there will have been some savings for many schools. For example, it is likely that there will have been less spent on supply costs, overtime, exam fees and invigilator costs.

Alongside this, the curriculum will have changed and, depending on whether the school was open or not, there could have been reduced costs here too. When reviewing a current school budget, the only area that may not have changed is the contracted staff costs.

Taking all the above into account, budgets will need to be reactive in the short term to address the changes in working practice, adaptable and regularly reviewed over the next year or so.


Currently no long-term additional government funding has been announced to cover the additional costs incurred for adapting establishments over the past months and according to current requirements. Therefore, current budgets will need to cover these costs. In the long term the government’s economic position may be unstable and could be very different from that planned. Therefore, changes to central funding in the future could have an impact on future school budgets.

Lettings have been severely affected and are likely to continue to be affected for the foreseeable future. The cost of implementing changes to the organisation for these to resume may outweigh the financial viability of letting out the school. In addition, some of those groups previously paying to use the school premises may no longer exist or be in financial difficulties themselves.

Many schools apply for grants to support the organisation; the current climate may mean that some of the organisations will no longer exist and those grants that are available may be more sought after.


Changes to expenditure will be very different for each school, so all areas of a budget will need to be considered. Schools are operating under very different conditions, but there are some costs that they have in common and that we are still only beginning to be able to budget for accurately. The main costs include:

• cleaning – including staffing costs, overtime and products

• the cost of any PPE required

• building adaptation and maintenance

• additional staffing

• transport costs.

The amount of PPE required is unclear and rules will have been interpreted differently. However, all schools have incurred some costs and even into the long term we can expect that those dealing with food, cleaning and first-aid issues will need to protect themselves and others.

The type of school building makes a huge difference, but most schools have had to engage in some form of adaptation over the past few months. There have been adaptations to classrooms, corridors, stairways, entrances, canteen areas and playgrounds, with marking out for possible movement flows.

Some staff have not been able to return to work for reasons of self-isolation or child care. The requirement for children to be taught in smaller groups has created tensions for those managing the school budget.

There could be increased transport costs, particularly for schools that have a wide catchment area and use fleets of buses. These may need to be increased or journeys staggered for social distancing purposes. Much depends upon the continued government guidance, particularly in respect of the distance that people continue to be required to keep between each other.

External support

In the short term, external support may not be allowed on site, some may be covered remotely, such as local authority support, finance and HR. However, there are a number of other types of external support that will be difficult to maintain and regulate.

Supply staff, invigilators, sports and music coaches are just some of those who are used to moving between our schools. Lack of availability and constraints on movement may result in the need for curriculum changes and changes of role for current staff. Contractors for repairs or building projects may have to work differently.

If all work has to be completed when schools are shut, there will be an increase in staffing costs and potentially contract cost increases because of demand.

Planning for the unknown

There are some practical elements of this that the SBM will need to plan for:

  • deliveries to the site – these must be delivered safely, opened and packaging destroyed
  • reception – the safety of staff and distancing requirements must be met
  • digital sign-in screens – these must be cleaned regularly, along with other public areas
  • office staff areas – these must meet the distancing requirements
  • sourcing of any new equipment required
  • possible changes in supplier because of the economic downturn.

Most schools opened with a relatively small number of students, which caused issues of its own. As the numbers have increased, so the costs have grown in September, requiring further revision of budgets.

In the longer term, additional needs may include:

  • extra staff to police the government guidelines, for example canteen, midday supervision
  • spreading exams over more rooms, involving extra invigilators
  • an increase in exam fees for students wishing to sit exams to achieve a grade
  • increased cleaning and catering contracts for new standards of working
  • changes in waste disposal and hygiene requirements
  • provision of mental and physical support for staff and students affected by the virus lockdown
  • shift working for some staff to ensure safety, and changes to school opening and closing times, which will have a financial impact on caretaking staff and others
  • provision of additional teaching and learning support, leading to additional costs.

Looking down a school budget there are very few areas that will not suffer from either short-term change or long-term impact. Not only in financial terms but also in terms of delivery.

Review and reflect

The government has always recommended regular reviews of budgets, but this will be a vital tool in the coming months and years if schools are to have the finances available for sudden new requirements and changes. Keeping a detailed analysis of budgets, particularly the costs of short-term requirements, will be essential for developing future budgets.

Contingency planning for changes to requirements will be difficult with the financial position most schools are in but, if possible, need to be considered.

Government financial support for the future may be very different. Grants may be reduced and additional funding hard to achieve. There is even the possibility of general funding change as the government finances will have been stretched and will continue to be so for the next few months.

So, budget, review, analyse, reflect and start again.

Further information

• Guidance: School funding: exceptional costs associated with coronavirus (COVID-19) for the period from March to July 2020, DfE: https://bit.ly/3gvPlZu


Use the following item in the Toolkit to put the ideas in the article into practice:

• Form – Budget changes

About the author

Beverley Dowsett has over 40 years of experience working within the education sector, working with schools, academies, local authorities and, most recently, as a financial consultant and trainer. Beverley is the former Director of Finance for the Academies Enterprise Trust.

Last modified on Friday, 28 August 2020 12:38

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