Welcome to Somerset Education R&D
This is a new space on the Somerset Education website where we develop, test, and share early-stage tools and ideas before they become part of our core Financial Survey for Schools methodology or client deliverables.
Think of it as a working space, not a finished shopfront. The tools you find here are deliberately in development—they may be a little rough around the edges, and they will change as we test, learn, and refine them.
Importantly, we want you to be part of that process. Try the tools, challenge the assumptions, and tell us what works, what doesn’t, and what would make them more useful for you and your school.
Our first R&D projects are the Dam Simulator and 5 Minute Budget Builder
Dam Simulator
EXPERIMENTAL
The theory of a financially sustainable school
A school is not financially sustainable simply because it breaks even or posts a surplus.
Our research takes a more precise view: financial sustainability is whether a school’s cash flow from operations is sufficient to meet its combined obligations for asset replacement (using depreciation as a proxy) and debt repayment.
At 100%, the school is likely to be financially sustainable.
Below 100%, it may be quietly running down its buildings, equipment, and balance sheet—even while appearing financially sound on paper.
Above 100%, the school moves towards greater financial resilience. But this raises another important question: at what point does generating additional surplus come at the expense of the educational services being provided to students?
For boards, the practical implication is important: a break-even operating budget is not necessarily a neutral or responsible position. Over time, it can represent slow financial decline because it provides nothing for servicing debt or replacing ageing assets.
A financially sustainable school therefore needs a genuine operating surplus—not simply a balanced budget.
Put the theory to the test
The Dam Simulator visualises this concept by treating a school’s finances like a dam—revenue is the rainfall, operating costs and debt/capital expenditure are the floodgates, and reserves are represented by the water level.
Adjust revenue, operating margin, debt, and capital expenditure assumptions and see what happens to reserves year by year.
FINANCIAL HEALTH ASSESSMENT
Beta
Another tool currently in development is our Financial Health Assessment Worksheet—designed to make assessing a school’s financial health quicker and more practical, particularly during workshops.
Simply enter a small amount of financial, student, and staff data, and the worksheet automatically calculates a selection of key financial ratios.
Then use your Financial Survey for Schools (FSS) reports to enter your target ratios. This allows you to compare relative performance, identify gaps, and explore areas for possible improvement.
5-Minute Budget Builder
Another tool currently in development is our 5-Minute Budget Builder—designed to provide a quick, practical way to explore the financial settings behind a school budget.
Watch this space for an early release, particularly as schools begin contemplating their 2027 budgets.
Help us develop these tools
If you have tried the Dam Simulator, the 5-Minute Budget Builder, or both, we would value your feedback. Tell us what works, what doesn’t, and what would make these tools more useful for you and your school.