Schools still hoarding cash

Figures released by the DfE yesterday at: suggest that the dwindling band of maintained schools are still not spending all their revenue income. With the revision of the national funding formula yet to see the light of day, these figures might suggest that the current method of funding schools isn’t achieving its key aim of improving teaching and learning as much as possible.

According to the DfE, in 2012-13, the total revenue balance across all Local Authority maintained schools was £2.2 billion, a decrease of £0.1 billion (5.0%) over the 2011-12 revenue balance figure of £2.3 billion. This equates to an average surplus in each maintained school of just over £113,000. However, according to the DfE the total revenue balance of £2.2 billion is 7.5% of the total revenue income across all LA maintained schools. Because of the schools becoming academies that have dropped out of the tables, this is an increase of 0.4 percentage points in revenue balances compared with the 2011-12percentage of 7.1%. So, not only are many maintained schools hording even more cash than last year, but roughly one pound in every £14 the average school receives isn’t spent in the year it is received.

With almost totally devolved budgets, it is legitimate for schools to maintain balances, and the DfE looks at 5% for secondary schools and 8% for other schools as being a reasonable level. There were apparently 464 schools that exceeded this level of reserves. Interestingly, 73 of these schools were in London. Together the London schools were holding in excess of £12 million pounds in reserves above the recommended limit. £2 million of that was apparently held by just four schools in Tower Hamlets: an excess of more than half a million pounds at each school.

By contrast, the average excess reserves in Newham, the next door borough, amounted to just £19,000. Because academies have a different financial year to maintained schools they are excluded from the figures, so comparisons between authorities may not always be helpful, but they do raise questions about what is happening to money lying idle for several years. One Tower Hamlets schools has apparently had over £1 million in uncommitted balances for the past five years since the 2008/09 financial year according to the DfE figures, and appears in the latest table with an uncommitted revenue balance of nearly £1.5 million.

Of course, there are also schools with deficit budgets, but the number has been reducing. According to the DfE, there were 1,111 maintained schools with a revenue balance deficit compared to more than 18,000 schools with a surplus. The total deficit across all LA maintained schools that had a deficit was £81.2 million, a decrease of £28.7 million (26.1%) over the 2011-12 total revenue balance deficit figure of £109.9 million. This equates to an average deficit in each school with a deficit of just over £73,000. The average figure for balances among primary schools in surplus was £93,000 and for secondary schools in surplus it was £405,000.

Last year, I suggested that some of the reserves should be used to create work experience for unemployed young people. In some of the London boroughs with high youth unemployment that might remain a good idea.


5 thoughts on “Schools still hoarding cash

  1. Great piece John, very interesting to see the differences between school surplus from one LA to another (even though the academies are excluded)

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