Wednesday, 3 June 2009

Surviving the downturn...

....preparing the board for losses.

Anne-Marie Etan, Deputy Principal, Finance and Resources, Southwark College.

Southwark facing significant ALR clawback. Lots of FDs only been around for the "good times".

Unknown unknowns (Donald Rumsfeld) - we don't have crystal balls, but...

Known Challenges:
reduction in ALR (Southwark removed nearly all of developmental learning, reduced learners, led to clawback)
pressure on 16-18, funding to LAs
raising participation age
diplomas
academy and presumption school 6th forms
demography
capital projects

T2G (Southwark achieved cash target by April, 20 partner consortium)

Known unknowns
change of government
self regulation
recession (effect on ER)
globalisation
technology impact on delivery

Unknown unknowns
?

Survival kit
  • manage risk & uncertainty - how have risks changed, impact on business plans, financial forecasting and scenario planning, more ad hoc consideration of risk management
  • business planning and budgeting - be part of curriculum planning, income maximisation (course delivery hours), assess course viability (course viability report), staff utilisation, link to budgeting, contingency planning (build in central delivery contingency)
  • review structure and cost base (strict staff costs as % income target, restructuring, efficiency savings, benchmarking)
  • maximise funding
  • cash management
  • diversify income

Ideas

Department mgrs to send risk log ahead of RiskMgt Group
Flex divisional budgets after enrolment
Contingency withheld from divisions to avoid spending too fast
LSC contract benchmarking
Revise financial strategy to set income diversity targets

Preparing the board...

Speak to Chair, early warning, information, offer options, recovery plan

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