Councils that adopted the most positive approach to the government’s academies programme risk paying a high financial price for their support under proposals outlined by the Department for Education.
According to the LGA, education secretary Michael Gove’s plans to re-balance the ‘top-slice’ of funding being held back from councils will reward those with the fewest schools to have opted out of maintained status. The top sliced funding is to cover a grant paid to academies to pay for the central services that local authorities usually provide.
The LGA has long questioned the basis on which ministers are withholding £148m in the current financial year and £265m for 2012-13, to fund the Local Authority Central Spend Equivalent Grant (Lacseg). It claims the reductions in costs for councils from no longer providing central services to academies are lower than the government estimates.
The DfE, meanwhile, maintains that the real cost of Lacseg is much higher - more than £1bn - because of higher-than-expected numbers of schools opting out of council control.
Proposals published by DfE will see a ‘per-pupil’ Lacseg amount calculated for all councils over the two years of the current spending review period. The difference between this figure and the top-sliced funding will be refunded to local authorities where it is lower than that already taken by the department.
David Simmonds (Con), left, who chairs the LGA’s children and young people board, said the plans effectively rewarded those councils that had least supported the academies programme.
“If you tried to block your schools from becoming academies and going it alone, you’ll get a big financial refund,” he said. “It appears perverse.”
In an admission that will worry many finance directors, the latest consultation suggests that calculations on the new per-pupil Lacseg spending levels will involve “an incentive for local authorities to improve the efficiency of their centrally retained services”.
The incentive will be based on evidence from “the five local authorities that proposed the smallest proportion of spend on retained functions and the largest amount on those areas to be transferred to academies”.
Cllr Simmonds said the association welcomed ministers’ attempts to redress the current imbalance in funding, and was listening to the concerns of local government.
He added that councils in areas where a high number of schools had opted for academy status may still feel that it had been the right move for those schools, not least to introduce extra funding to them.
Fears also exist over the timescale for the four-week consultation, which closes on 12 January and incorporates the school Christmas holidays.