ICFP and Budget Assumptions

Budgeting is a gloriously messy process. Across the country finance professionals are doing what seems unnatural for such a process and making guesses about what may occur in the future, like Nostradamus or the soothsayer in Julius Caesar with his warning to , “Beware the ides of March.” In fact, this warning seems apposite in 2025 as the DfE has delayed its major announcement about funding, and specifically the funding for the increase in employer’s NI contributions to mid-March.

With such a huge range of guesses going on we may look to the DfE for some guidance as was mentioned by one of the CFO’s who responded to one of my Linked In posts about budget assumptions: ‘I've often wondered why the central government doesn't share the underlying assumptions behind their high level budgets or provide more steer —even if these are caveated (i.e. political and economical shifts). Would go a long way toward aligning our sector, especially when we're all trying to anticipate not just external inflationary pressures, but also the impact of NJC and Teacher Pay Awards, potential shifts in pension flexibilities, and changes to income streams.’

The problem faced by the DfE is simply that any assumptions they suggest will be treated as fact as soon as they are published.

The best guidance we will get on this is what is published in the Academy Trust Handbook:

2.11 The board must ensure budget forecasts for the current year and beyond are compiled accurately, based on realistic assumptions, including any provision being made to sustain capital assets, and reflect lessons learned from previous years.

This guidance is useful in terms of process, if not in terms of specifics.

There are a few organisations that will, however, help. For several years the Association of School and College Leaders (ASCL) have published three-year budget assumptions and the Confederation of School Trusts publish their School Funding Landscape Summary for the coming year in December of the previous funding year. Both of these need a membership if you want to access the latest versions.

For the last two years ISBL have also produced sets of three year budget assumptions, using a panel of SRMAs to advise, and pulled together by one of our directors, Peter Tomkins. These are available here: https://blog.isbl.org.uk/budget-assumptions-2025-to-2028

As mentioned previously, setting a budget is a messy process and, with no central agreement, everyone undertaking the process will have a different opinion.

But what has this got to do with integrated curriculum and financial planning (ICFP)? The DfE advice includes the idea that the budget should ‘reflect lessons learned from previous years.’ This response to historical budgets can be projected forward by using ICFP: what can we learn from the ICFP metrics about what we are planning in the future?