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Academies prompt funding fears

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Proposals to significantly increase the number of academy schools could leave councils underfunded for supporting the central education services provided to all children, the sector has warned.

Education secretary Michael Gove, after calling on thousands of maintained schools to become academies, moved to reassure council leaders and chief executives that he wanted councils to retain “a strong strategic role”, with councils continuing to be “powerful champions of educational excellence”.

But concerns remain about funding for services such as special education needs (SEN) and pupil referral units (PRUs) for excluded youngsters currently paid out of central budgets, to which not all academies contribute.

Since 2008, a “recoupment” system has allowed councils to retain an element of the Dedicated Schools Grant that represents a converted academy’s contribution to central services.

However, the system is due to end next year and the previous government warned it was minded to revert to the previous pupil-number system that did not make a contribution to central services.

LGC understands the new government has promised to consider the responses to an ongoing consultation on schools funding, and that the Local Government Association will argue for a continuation of recoupment.

Helen Johnston, LGA programme director for children and young people, said the majority of councils’ central schools budgets was spent on SEN and PRUs.

“If you have an area where there are 100 schools, and one or two of them are academies not contributing to the central fund, then the rest of the schools will help,” she said. “If half of the schools are academies, then the half of the schools that aren’t academies will get less. Our position is that we need fair funding.”

A Department of Education spokesman said new academies would receive funding “to recognise the responsibilities” they took away from local authorities.

“We will be talking with DCLG and local authorities about how to manage the impact on local authorities and ensure they are equipped to carry out their functions.”

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