Budgeting and Strategy in Schools: The Elusive Link

Abstract

This paper examines the effects upon management control in schools following the assumption of responsibility for delegated budgets required by the Education Reform Act (ERA) 1988. The paper examines the process of construction, approval and amendment of school budgets drawing on a neo‐institutionalist framework. Our investigation has drawn upon extensive interviews in 17 schools in three North West local authorities, supplemented by a postal questionnaire and inspection of relevant documents. We develop two main arguments. First, in order to satisfy their statutory duties LEAs supervised the introduction of internal systems of budgetary control and school development planning in schools. Thus, control procedures were largely designed by internal auditors, who sought to provide an audit trail and to ensure financial probity mainly to satisfy external legitimacy, rather than to influence internal decision‐making. Second, the specific nature of the relationship between budgeting and strategy varies between schools as the extent of formalised planning differs, but in general there is a very loose coupling between strategic objectives and budget expenditures.

Performance Measurement Myths in the Public Sector: A Research Note

“…With reference to the UK's National Health Service (NHS), Lapsley (1994) argued that repeated failures to persuade clinicians to take budgetary responsibility to heart led to the de-coupling of the myth that financial controls were extended to all spheres of hospital activity from much of the action taken at the operating level. Similar findings have been reported from other countries and parts of the public sector (e.g., ter Bogt and van Helden, 2000;Cochrane, 1993;Doolin, 1999;Edwards et al, 2000;Llewellyn, 1998;and Pettersen, 1995). In contrast to such evidence, however, there are indications that operating-level employees may react more favourably to financial PM and control, if the implementation of such mechanisms is supported by more powerful learning processes (cf.…”

Researching Public Sector Transformation: The Role of Management Accounting

“…This table shows that approximately 50% of the papers refer to the first three levels of NPM adoption. This percentage would be even higher, if we take into account that some papers that do not refer to NPM, implicitly discuss NPM concepts and techniques (for instance : Collier, 2001;Edwards et al, 2000;Lowe and Doolin, 1999;and Townley, 2001). Evidently, papers on PSMAR deal primarily with concepts (related to discourse), techniques (formal decisions) and the way in which these techniques are used (practices).…”

‘Performance’ Without Pay? Managing School Budgets Under Performance Related Pay: Evidence from the First Year of PRP

“…D, F and J) teachers who were part of the Senior Management Team (SMT) took this role; in others (A, B, C and G) the role was filled by a non-teaching staff member. The focus on heads reflects the findings of earlier research that, while teachers' views can exert an influence on budgetary allocations, the 'budgeting process' as a whole 'is dominated by the SMT' (Edwards et al, 2000, p. 323; see also Broadbent et al, 1993). and thus heads, as de facto leaders of the SMT, could be expected to exert a decisive influence on budget setting (Boyne et al, 2003, p. 136).…”