School debts ‘have increased sharply’ since 2013

Dec 4, 2015 by

State school debt in England and Wales has increased sharply in the past three years, as budgets tighten and cost pressures hit schools, a report says.

The Times Educational Supplement asked councils how much maintained schools had asked to borrow since 2013-14.

Borrowing in the 137 of 174 local authorities that responded rose £20m to £56.7m, the TES said, over three years.

The government says school budgets have been protected, but heads say they continue to face rising cost pressures.

‘Cost pressures biting’

The Department for Education added it was up to head teachers to prevent their schools from going into debt.

“We have always been clear that local authorities need to work with schools to prevent any deficits and surpluses becoming significant,” it said.

The figures obtained under Freedom of Information laws looked at the financial years 2013-14, 2014-15, and up to the end of November 2015.

They do not cover academies which are not maintained by local authorities.

The data also revealed the average permitted deficit per school, for indebted schools, has almost doubled to £122,828 since 2013-14.

Malcolm Trobe, deputy general secretary of the Association of School and College Leaders, said cost pressures were really biting in schools.

“The simple fact is that there has been no real-terms increase in schools’ budgets, and schools have had to deal with extra costs and inflationary pressures,” he said.

‘Protected budgets’

Although the chancellor’s Spending Review confirmed per pupil funding will be stable as numbers increase, the Institute of Fiscal Studies has warned there will be significant cost pressures of up to 8% on schools over the next five years.

Schools will have to find extra resources to cover rises in pension, National Insurance and pay costs over the course of this Parliament.

Mr Trobe predicted the situation was likely to get worse, saying: “If you can’t balance the budget this year, you’re going to struggle to balance the budget next year and to pay off the deficit.”

The DfE is to look at what needs to be done to rebalance school funding from area to area and is launching a consultation on the issue.

Presently schools are funded at quite different levels, as local authorities receive varying grants based on estimates of their historic needs. Schools are then allocated per pupil funding based on rates set by their local authority.

They then receive extra funds based on how many disadvantaged pupils they have and the characteristics of the school.

Source: School debts ‘have increased sharply’ since 2013 – BBC News

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