How the Financial Health Score Works
Methodology behind MATpulse's composite 0-100 financial health score — peer-based continuous scoring with DfE threshold guardrails.
What the score measures
The Financial Health Score is a composite metric from 0 to 100 that summarises a school's financial resilience relative to similar schools. It combines three components with asymmetric weighting: reserves health (40 points), staff cost sustainability (35 points), and revenue resilience (25 points). The weighting reflects how actionable each area is for school leaders — reserves and staff costs are discussed at every finance committee, while revenue diversification is important but less immediately controllable.
Peer-based scoring
Each component uses continuous scoring based on the school's percentile position among its 30 FBIT-aligned peer schools (matched by phase, region, FSM%, and SEN%). A school at the 50th percentile among peers scores roughly half the available points for that component. This means the score automatically adjusts for school context — a primary school in the North East is compared against similar primaries in the region, not against London secondaries. There are no cliff effects or arbitrary thresholds in the scoring — the distribution is smooth and continuous.
Reserves health (0-40 points)
The largest component, reflecting how critical reserves are to financial resilience. The base score (0-30) comes from the school's reserves-as-percentage-of-income percentile among peers. A trajectory adjustment (up to +10 or -5) rewards schools whose reserves are stable or improving and penalises sustained decline over 2+ years. DfE guardrails apply: schools with reserves below 5% of income (the ESFA vulnerability threshold) are capped at 20/40 regardless of peer position. Schools with negative reserves are capped at 10/40.
Staff cost sustainability (0-35 points)
The base score (0-35) comes from the school's staff-costs-as-percentage-of-income percentile among peers, inverted so that lower costs score higher. Where granular expenditure data is available (84% of schools), an agency and supply staff adjustment is applied: schools spending above 5% of income on agency/supply receive a -3 penalty; above 8% receives -5. This captures structural workforce pressure that headline staff cost figures can mask. DfE guardrail: schools above 80% staff costs (the GOV.UK 'high' threshold) are capped at 15/35.
Revenue resilience (0-25 points)
A composite of three sub-indicators. In-year balance health (50% weight): the proportion of recent years with a surplus, scaled to 12.5 points. A school in surplus every year scores full marks; persistent deficits score zero. Pupil number trend (25% weight): 3-year change in pupil count, scaled to 6.25 points. Growing or stable rolls score higher. Income diversity (25% weight): self-generated income as a proportion of total income, scaled to 6.25 points. Schools with more diversified income are less vulnerable to funding formula changes.
What the score does not include
The score does not use vacancy rate data (only 6% of schools report this reliably), teacher turnover (55% coverage — shown on profiles when available but not scored), or ICT expenditure (25% of schools report zero due to AAR/CFR categorisation differences). Only metrics with 90%+ population rates are used in the score to ensure reliability. The score also does not capture building condition, SEND provision costs, or curriculum breadth — all of which may legitimately affect a school's cost structure.
DfE sources and guardrails
The peer selection methodology mirrors the DfE's Financial Benchmarking and Insights Tool (FBIT). Financial thresholds reference: staff costs 80% (GOV.UK governors guidance), reserves 5-20% (ESFA financial oversight guidance), and the SRM self-assessment checklist. These absolute thresholds act as guardrails — a school cannot score well on a component purely because its peers are also in difficulty. The score is designed to support self-evaluation, not to replace professional financial judgement.
Limitations
The score is a screening tool, not a diagnosis. A low score does not necessarily mean a school is in financial crisis — a school investing in a building project may temporarily show depleted reserves. High agency spend may reflect a deliberate strategy during a recruitment drive. The score should always be read alongside the detailed financial data, peer benchmarking charts, and the school's own context. For academies, the ESFA formally assesses financial health at trust level, not at individual school level. MATpulse computes school-level scores for all schools regardless, but users should be aware that academy reserves are pooled across the trust.