Source · Select Committees · Public Accounts Committee
Recommendation 10
10
The ESFA told us that it was also keen to explore the reasons why maintained...
Conclusion
The ESFA told us that it was also keen to explore the reasons why maintained secondary schools appeared to be in more financial difficulty than maintained primary schools. The Department explained that the differences in the financial health of maintained primary and secondary schools had principally been driven by the different treatment in previous Spending Reviews of 16-to-19 funding compared with five-to-16 funding.22 We note that the Department reduced funding per sixth-form student, which contributed to the balance of funding shifting from secondary schools to primary schools, between 2014–15 and 2020–21.23 The Department said that it was keen to start to redress this position and was doing so through the extra funding committed in the 2021 Spending Review for both the school system as a whole and 16-to-19 students in particular.24 Financial health of academy trusts
Government Response
Not Addressed
HM Government
Not Addressed
1: PAC conclusion: The Department does not understand well enough why there is so much geographical variation in maintained schools’ financial health and why maintained secondary schools are under particular financial pressure. 1: PAC recommendation: The Department should thoroughly investigate the geographical variation in in the financial health of maintained schools, determine the underlying causes and decide whether some schools or local areas need extra support from 2022–23 to be sustainable. 1.1 The government agrees with the Committee’s recommendation. Target implementation date: March 2023 1.2 The national funding formula (NFF), introduced in 2018-19, distributes funding to schools fairly, regardless of geographical location. The formula does not discriminate between maintained schools and academies. The formula is updated annually based on schools’ and pupils’ characteristics. 1.3 It is local authorities’ responsibility to supervise maintained schools, and the Department for Education (the department) expects local authorities to closely monitor maintained schools in financial difficulty, taking action as necessary under their local schemes. 1.3 The department annually publishes information on the reserves of maintained schools, based on schools’ Consistent Financial Reporting (CFR) returns, including analysis of reserves in different phases, and a local authority level breakdown. The latest statistics show a smaller proportion of maintained schools in deficit in 2020-21 compared to 2019-20. The percentage of secondary schools in deficit reduced from 27% to 19% in 2020-21. 1.4 The department monitors variations in phases and will collect perspectives on financial health and explanatory factors from local authority-maintained schools in different geographical areas. The department’s School Resource Management programme is available to schools, allowing them to access available tools and support. The expertise of School Resource Management Advisors (SRMAs) can be deployed to help local authorities and their schools identify opportunities to make better use of their funding. The department will continue to engage and support those local authorities, with schools in deficits, to request Action Plans and offer SRMA expertise to understand and provide advice on addressing these deficits.