Tag: resilient

  • Driving resilient, stable school budgets in times of uncertainty

    Driving resilient, stable school budgets in times of uncertainty

    A perfect storm of financial pressures, from declining enrollment to escalating economic uncertainty, are pushing K-12 school district budgets to their limits.

    To adapt, districts nationwide are embracing innovative strategies to shore up budget stability. From reducing facility operational costs to forging strong community partnerships, school district leaders can learn from these proven examples to safeguard their financial stability and maintain funding for critical student programs.

    Securing revenue, and finding new revenue streams

    The post-COVID recovery era has been especially challenging for the majority of school districts whose budgets are based on per-pupil enrollment or attendance. Fortunately, there are many examples of school districts that have successfully combatted budget shortfalls through community-driven student engagement, retention and attendance programs. And with shifting populations and school choice schemes on the rise, school districts are also growing more adept at differentiating themselves through strong communications programs and visible investments into modern facilities. These strategies impact budgets by attracting new residents and strengthening student retention. 

    More districts are also looking to partnerships with local utility companies like utility rebates, net-metering programs, and demand response incentives. These programs reward smart energy management (i.e. energy efficiency upgrades, on-site renewables, and strategic energy usage) by offering direct cash infusions and bill credits that can improve a school’s budget health.

    Richland County School District One in South Carolina, for example, was able to take advantage of a net-metering program with their local utility after installing nearly 9MW of rooftop solar across 15 campuses. These solar upgrades will save the district over $29 million in energy costs over the next 20 years, more than funding themselves while creating a new financial cash flow into the district’s budget. This project also enables new STEAM curriculum, engaging students in energy generation and conservation in hands-on learning labs.

    Eliminating cost volatility and avoiding unexpected expenses

    Most US school districts are grappling with a portfolio of facilities that are decades past their prime. Maintaining those aging facilities often becomes reactive rather than planned—leaving districts vulnerable to costly, disruptive emergencies. This cycle of crisis spending is unsustainable, driving up long-term costs. That’s one reason why, in their 2025 Infrastructure Report Card for America’s Schools, the ASCE calls to, “urge school districts to adopt life-cycle cost analysis principles in planning and design processes to evaluate the total cost of projects and achieve the lowest net present value cost, including life-cycle O&M, in addition to capital construction.”

    Outdated HVAC systems, leaky building envelopes and inefficient lighting also strain budgets by consuming massive amounts of energy. With energy price volatility on the rise, inefficient energy usage can present a threat to predictable budgeting, particularly for public schools already navigating tight financial constraints.

    School districts like Greene County Schools (GCS) in Tennessee are seeing big budget impacts from taking a proactive approach to facility and energy management. Facing a growing list of deferred maintenance projects, including more than 400 aging HVAC units, GCS turned to Schneider Electric to help design a comprehensive, long-term energy management strategy that allowed the district to reallocate savings toward deferred maintenance.

    Support top-line priorities by capturing O&M cost savings

    Operations and maintenance (O&M) represent the second-largest expenditure in most school districts, right after personnel. Unlike staffing, however, these costs can be reduced without sacrificing student outcomes. By investing in facility modernizations—like smart building controls, LED lighting, water conserving plumbing, and clean energy technologies—schools can dramatically lower their utility bills and maintenance costs. These savings, when captured strategically, can be diverted back into what matters most: academic programming, staffing, and student engagement. 

    Gilbert Public Schools (GPS) in Arizona discovered first-hand how energy improvements can be an excellent tool to achieve budget sustainability. GPS started by upgrading to high-efficiency LED lighting across the district’s gymnasiums, allowing them to turn a $257,000 initial investment into more than $1.2 million in lifecycle savings over the life of the project. Next, GPS made modernizations that reduced water usage and lowered maintenance costs, from which the district ultimately realized $12.9M in lifecycle savings.

    Finding budget stability in times of uncertainty

    Times are uncertain, but as these stories show, budget stability is still within reach. Through smart resource optimization and strong community partnerships, schools can safeguard funding for their top priorities.

    Visit Schneider Electric’s K-12 Education Hub for more inspiring success stories and insights into our budget stability solutions tailored for schools.

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  • Connect more: creating the conditions for a more resilient and sustainable HE sector in England

    Connect more: creating the conditions for a more resilient and sustainable HE sector in England

    Despite it being the season of cheer, higher education in England isn’t facing the merriest of Christmases.

    Notwithstanding the recent inflationary uplift to the undergraduate fee cap, the financial headwinds in higher education remain extremely challenging. Somehow, in the spring/summer of next year, the Secretary of State for Education is going to have to set out not only what the government expects from the sector in terms of meeting the core priority areas of access, quality and contribution to economic growth, but how it will deliver on its promise to put the sector on a long-term sustainable financial footing.

    The overall structure of the sector in terms of the total number of providers of higher education and their relationships to each other might arguably be considered a second-order question, subject to the specifics of the government’s plans. But thinking that way would be a mistake.

    The cusp of change

    There are real and present concerns right now about the short term financial stability of a number of providers, with the continued increased risk that a provider exits the market in an unplanned way through liquidation, making the continued absence of a regime for administering distressed providers ever more stark.

    But on a larger scale, if, as some believe, the sector is on the cusp of entering into a new phase of higher education, a much more connected and networked system, tied more closely into regional development agendas, and more oriented to the collective public value that higher education creates, then the thinking needs to start now about how to enable providers to take part in the strategic discussions and scenario plans that can help them to imagine that kind of future, and develop the skills to operate in the new ways that a different HE landscape could require. It is these discussions that need to inform the development of the HE strategy.

    The Office for Students (OfS) has signalled that it considers more structural collaboration to be likely as a response to financial challenge:

    Where necessary, providers will need to prepare for, and deliver in practice, the transformation needed to address the challenges they face. In some cases, this is likely to include looking externally for solutions to secure their financial future, including working with other organisations to reduce costs or identifying potential merger partners or other structural changes.

    Financial challenge may be the backdrop to some of this thinking; it should not be the sole rationale. Looking ahead, the sector would be planning change even if it were in good financial health: preparing for demographic shifts and the challenge of lifelong learning, the rise of AI, and the volatile context for international education and research. Strategic collaboration is rarely an end in itself – it’s nice to work together but ultimately there has to be a clear strategic rationale that two or more providers can realise greater value and hedge more readily against future risks, than each working individually.

    There’s no roadmap

    In the autumn of 2024, Wonkhe and Mills & Reeve convened a number of private and confidential conversations with heads of institution, stakeholders from the sector’s representative bodies, mission groups, and regional networks, Board chairs, and a lender to the sector. We wanted to test the sector’s appetite for structural change; in the first instance assessing providers’ appetite for stepping in to support another provider struggling, but also attitudes to merger and other forms of strategic collaboration short of full merger. Our report, Connect more: creating the conditions for a more resilient and sustainable higher education system in England sets out our full findings and recommendations.

    There is a startling dearth of law and policy around structural collaboration for HE; some issues such as the VAT rules on shared services, are well established, while others are more speculative. What would the regulatory approach be to a “federated” group of HE providers? What are merging providers’ legal responsibilities to students? What data and evidence might providers draw on to inform their planning?

    We found a very similar set of concerns, whether we were discussing a scenario in which a provider is approached by DfE or OfS to acquire another distressed provider, or the wider strategic possibilities afforded by structural collaboration.

    All felt strongly that the driving rationale behind any such structural change – which takes considerable time and effort to achieve – should be strategic, rather than purely financial. Heads of institution could readily imagine the possibilities for widening access to HE, protecting at-risk subjects; boosting research opportunities, and generally realising value through the pooling of expertise, infrastructure and procurement power. The regional devolution and regional economic growth agendas were widely considered to be valued enablers for realising the opportunities for a more networked approach.

    But the hurdles to overcome are also significant. Interviewees gave examples of failed collaboration attempts in other sectors and the negative cultural perceptions attached to measures like mergers. There was a nervousness about competition law and more specifically OfS’ attitude to structural change, the implications for key institutional performance metrics, and a general sense that no quarter would be given in accommodating a period of adjustment following significant structural change. The risks involved were very obvious and immediate, while the benefits were more speculative and would take time to realise.

    Creating conditions

    We have arrived at two broad conclusions: the first being that government and OfS, in tandem with other interested parties such as the Competition and Markets Authority could adopt a number of measures to reduce the risks for providers entering into discussions about strategic collaboration.

    This would not involve steering particular providers or taking a formal view about what forms of collaboration will best serve public policy ends, but would signal a broadly supportive and facilitative attitude on the part of government and the regulator. As one head of institution observed, a positive agenda around the sector’s collaborative activity would be much more galvanising than the continued focus on financial distress.

    The second is that institutions themselves may need to consider their approach to these challenges and think through whether they have the right mix of skills and knowledge within the executive team and on the Board to do scenario planning and strategic thinking around structural change.

    In the last decade, the goal for Boards has been all about making their institution stronger, and more competitive. While that core purpose hasn’t gone away, it could be time to temper it with a closer attention to the ways that working in a more collective way could help higher education prepare itself for whatever the future throws at it.

     

    This article is published in association with Mills & Reeve. View and download Connect more: creating the conditions for a more resilient and sustainable higher education system in England here.

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