A school leaders’ guide to 2025/26: Finance and funding

What’s on the horizon in 2025/26?

As the summer sun begins to fade and we prepare to open our school gates again, the 2025/26 academic year comes into view – not just as a date in the diary, but as a critical juncture for education. 

This coming year, we will have to navigate a shifting policy landscape, as well as evolving societal expectations, and persistent operational pressures. 

For governors and trustees, school leaders, and teachers and staff, the key to success is not merely to respond, but to anticipate.

Indeed, strategic vision has never been more crucial. In a climate marked by constant change, those with foresight will be best placed to lead with clarity and conviction.

As such, this series of short blogs aims not just to summarise existing changes but to predict what’s yet to come. It’s a framework for professional curiosity; a panoramic view of the key themes likely to define the year ahead.

In this blog, we will explore…

5 Finance and funding

The financial pressures on schools remain unrelenting. Inflation is eroding budgets, SEND provision is stretched, and investment in school estates often lags behind need.

The solution lies in multi-year planning that prioritises impact over survival. Collaborative procurement, shared services, and trust-wide efficiencies can help – but only if they are underpinned by clear strategic goals.

Financial decisions must reflect moral purpose: inclusion, outcomes, and wellbeing should drive spending priorities.

1. Multi-year, impact-driven financial planning

• Move away from annual crisis budgets and develop 3–5 year financial models that anticipate key pressures (e.g., pay awards, energy costs, roll changes).
• Link budget lines directly to school improvement priorities so every pound spent can be justified against pupil outcomes, inclusion, and wellbeing.
• Build scenario modelling (best case, worst case, and likely case) to prepare for funding fluctuations.

Practical solutions:

• Use integrated curriculum and financial planning (ICFP) to align staffing with curriculum delivery.
• Review all non-staffing costs annually for impact vs. necessity – stop doing things that have little measurable benefit.
• Ring-fence small “innovation budgets” to trial cost-effective, high-impact projects.

2. Collaborative procurement and shared services

Economies of scale are only effective if they’re strategic not just a bulk-buy of the wrong things.

• Procurement consortia – Join or create buying groups with local schools or your trust for energy, IT licences, insurance, and catering.
• Shared specialist roles – Pool resources for posts like educational psychologists, speech therapists, or specialist subject leaders.
• Trust-wide estate planning – Coordinate maintenance and capital works to secure better contractor rates and funding bids.

Practical solutions:

• Audit current contracts: are there opportunities to renegotiate or retender for better terms?
• Use procurement frameworks (DfE-approved or local authority) to reduce admin time and improve value.
• Track the savings from joint procurement and reinvest them in pupil-facing priorities.

3. Funding for inclusion and SEND sustainability

With rising numbers of pupils requiring SEND support, budgets must be both inclusive and sustainable.

• Targeted funding bids – Explore grants from local, charitable, and national sources for specific inclusion projects.
• Early intervention investment – Spend upfront on high-quality universal provision to reduce costly escalation to EHCP level.
• Cross-school SEND networks – Share specialist staff and training across schools to reduce duplication and improve quality.

Practical solutions:

• Develop a rolling 3-year SEND resource plan mapping anticipated needs, training, and staffing.
• Train admin and support staff to help identify potential funding streams and assist with bid writing.

4. Estates investment: planned, not reactive

Buildings and infrastructure directly affect learning and wellbeing. Waiting until something fails costs more.

• Create a 5-year estate management plan with prioritised works, costs, and potential funding sources.
• Pursue Salix funding and other government schemes for energy efficiency improvements.
• Plan refurbishments to support pedagogical goals (e.g., flexible learning spaces, better acoustics for SEND pupils).

Practical solutions:

• Conduct annual condition surveys with an eye on both compliance and long-term sustainability.
• Explore partnerships with local businesses or colleges for in-kind support or skills exchange in estate projects.

5. Moral purpose at the heart of financial decisions

A healthy budget is not an end in itself; it’s a means to an educational end. Spending should be guided by:

• Inclusion – Prioritise resources that remove barriers for disadvantaged pupils.
• Outcomes – Invest in strategies proven to improve attainment and progress.
• Wellbeing – Fund initiatives that sustain staff morale and pupil engagement, recognising their link to outcomes.

Practical solutions:

• Use an “impact statement” for any spending over an agreed threshold, recording how it will contribute to inclusion, outcomes, or wellbeing.
• Involve governors in values-based budgeting discussions each year to maintain alignment with the school’s moral purpose.

Financial resilience is built on clarity, collaboration, and courage. The best leaders will be those who can make tough financial decisions without losing sight of their moral compass—and who see efficiency not as a cut, but as a chance to reallocate resources towards what matters most.