8
Conclusion
Forty-Second Report - Financial sustain…
Acknowledged
We asked the Department why so many maintained schools were in deficit. The Department highlighted that the financial health of the school system had held up well and that most maintained schools and academy trusts were in surplus. The ESFA noted that only four local authorities had a net deficit …
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We asked the Department why so many maintained schools were in deficit. The Department highlighted that the financial health of the school system had held up well and that most maintained schools and academy trusts were in surplus. The ESFA noted that only four local authorities had a net deficit when all their individual school balances were combined.18 It said that it was not obvious what the drivers were for the geographical variation, for example there was no clear rural-urban split and it was not linked to deprivation.19 The Department told us that it thought a number of factors contributed to the variation across the country and the situation was challenging because the factors 8 Q 167 9 Qq 151–152 10 Q 172 11 C&AG’s Report, para 6 12 C&AG’s Report, School funding in England, Session 2021–22, HC 300, 2 July 2021, para 10 13 HC Committee of Public Accounts, School Funding, Twenty-First Report of Session 2021–22, October 2021 14 Q 96 15 C&AG’s Report, paras 8, 1.9 16 C&AG’s Report, para 9 17 C&AG’s Report, para 1.15, Figure 5 18 Qq 36, 39–40 19 Q 36, C&AG’s Report, para 1.16 Financial sustainability of schools in England 9 interacted. It explained that historical patterns of funding and the balance of maintained schools to academies in each local authority area were important factors. In addition, in some cases, capital investment and the condition of school buildings made a significant difference.20
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Government response AI summary
The government agrees with the Committee’s recommendation and states that the national funding formula (NFF) distributes funding to schools fairly, regardless of geographical location. They are introducing a consistent approach to budget planning and monitoring across local authority-maintained schools, including analysis of reserves in different …
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HM Treasury
16
Conclusion
Forty-Second Report - Financial sustain…
Acknowledged
We have heard examples of local schools taking steps such as cutting staff, particularly teaching assistants, and reducing provision for pupils with SEND, in order to make savings.34 We also received written evidence from stakeholders in the sector about how schools had responded to financial pressures and the damaging impact …
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We have heard examples of local schools taking steps such as cutting staff, particularly teaching assistants, and reducing provision for pupils with SEND, in order to make savings.34 We also received written evidence from stakeholders in the sector about how schools had responded to financial pressures and the damaging impact that these measures could have on the support schools could provide. The National Education Union said that, faced with cost pressures, the major levers schools could pull were linked to staffing, which meant cuts in teacher and support staff jobs, increased pupil-teacher ratios, larger class sizes and reduced curriculum options. It considered these actions harmed education.35 The National Association of Head Teachers reported that many schools had reduced budgets over a number of years to move to a surplus position at lower levels of expenditure, masking the impact of cuts, particularly to both teaching and support staff.36 And a secondary school headteacher wrote to tell us that real-terms reductions in funding had impacted pupil class sizes which had grown significantly, and had increased teacher workload which affected the school’s ability to attract and retain teachers and leaders.37
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Government response AI summary
The department will commission research on how a sample of schools has experienced and responded to previous financial pressures and on the anticipated impact of additional funding, with results expected by end-March 2023.
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HM Treasury