Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

Tougher school finance scrutiny announced

  • Comment

Councils could face government intervention over their systems for overseeing schools’ budgets if just one school in their area breaches a deficit limit, under new plans from the Department for Education.

Under the plans, the department will approach a local authority if 2.5% of its maintained schools have been in deficit of 2.5% or more for the past four years.

The changes have been made after a National Audit Office report in October 2011 found that one in five secondary schools were in deficit at the end of 2009-10 and almost half of councils believed they lacked sufficient resources to effectively monitor schools’ financial management.

However, a DfE report shows some councils warned that under the new system, the department could intervene over just one school.

The report, which covers the responses to a consultation on the plans, said some respondents pointed out that: “As numbers of local authority maintained schools reduce, as a result of schools converting to academies, for smaller local authorities 2.5% may relate to only one school, in which case intervention may seem excessive.”

It also said some had called for a change to the system, so that the department would only intervene if a minimum number of schools had been running with a 2.5% deficit for four years.

However, the document said the department would introduce the original proposal. It did not mention implementing the threshold of a minimum number of schools.

It said 95 organisations responded to the question, “do you agree it is appropriate to approach an LA if it has 2.5% of schools that have been in deficit of 2.5% or more since 2007-2008 (i.e. for 4 years)?” Of these, 54 said yes, 34 said no and 7 were not sure.  

The report said that, starting this year, the department would ask local authorities to “provide additional information” about their financial management of schools in cases where:

  • A council had overspent its Dedicated Schools Grant (DSG) by 2% or more
  • A council had underspent its DSG by 5% or more
  • 2.5% of a council’s maintained schools had been in deficit of 2.5% or more for the last 4 years
  • 5% of schools had had a surplus of 15% or more for the last 5 years

The DfE report can be read in full here.

  • Comment

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions.

Links may be included in your comments but HTML is not permitted.