Local authority support helps schools manage finances but strategic planning needs strengthening

Local authorities play an important role in helping schools manage their finances, but the strategic support they provide varies too much across Wales, according to a new Estyn report, Local authority support for schools to manage their budgets. The report examines how effectively local authorities support maintained schools with financial management and long-term planning at a time of increasing pressure on school budgets.

The review finds that schools generally value the advice and guidance they receive from local authority finance teams. In many cases, schools benefit from strong day-to-day operational support to help them monitor spending, manage grants and ensure compliance with financial requirements.

However, support is less consistent when it comes to helping schools plan strategically. Too often, the focus is on balancing annual budgets rather than supporting schools to make confident medium- and long-term financial decisions.

Budget-setting processes are usually open and transparent, and most local authorities engage schools through consultation groups or budget forums. However, the clarity and timing of financial information can vary significantly, making it difficult for school leaders and governors to plan staffing and curriculum decisions with confidence.

The report also finds that while most authorities monitor financial risk and support schools facing financial difficulties, approaches to early intervention and long-term sustainability are inconsistent. In many cases, responses focus on short-term savings rather than longer-term planning.

Estyn highlights that the strongest practice occurs where finance, human resources and school improvement services work closely together. This helps authorities identify risks earlier and align financial decisions with educational priorities.

Owen Evans, His Majesty’s Chief Inspector at Estyn, said:

“Local authorities across Wales are strongly committed to supporting schools to manage their finances, and schools value the professionalism and accessibility of finance teams.

“However, we found that schools needed clearer, more timely information and stronger support to plan for the medium and long term. Where we saw local authorities bring together finance, workforce and school improvement expertise, they are better able to identify risks early and support schools to make sustainable decisions that benefit learners.”

The report recommends that the Welsh Government improves the timeliness and predictability of funding and simplifies funding arrangements to better support long-term planning. It also calls for stronger national guidance and investment in data to support consistent financial planning across Wales. The report recommends strengthening strategic support from local authorities by improving multi-year planning for schools, providing clearer and more timely financial information, and working more closely across finance, workforce and school improvement services.