Tag Archives: funding

Schools still hoarding cash

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Figures released by the DfE yesterday at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/264737/SR54-2013Text.pdf 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.

Working for success: planning for failure

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The news that an academy chain has lost responsibility for 10 schools raises a number of interesting questions. The most obvious is who has the responsibility to find these children an appropriate education? In the present instance, the DfE seems to be doing that by looking for a replacement sponsor or sponsors. How long should they be allowed if it is a question of teaching and learning standards?

No doubt the Laws’ Leaders, as David Laws’ new national leaders are likely to be dubbed, could be sent in to lead individual schools during any interim while new sponsors are brought on board, but what about the ownership of the assets? The situation becomes even more interesting if it were, say, a church group of academies. Would the solution be to change diocese, but who would own the assets if the schools had previously been voluntary aided? Suppose the Trustees decided that they didn’t want anyone else running the school, and just effectively closed it down. Who finds the pupils new schools? Generally, when a private school goes bust, which is often at short notice, and frequently just before a term starts or ends, and the local authority steps in to help find places for the pupils that need them. However, where it is no longer the admissions authority for most schools in a locality, how will it do this if the other academies refuse to cooperate because the in-coming pupils might affect their examination results or their balanced admissions policy?

As with the problem highlighted in my previous post, what happens if any closure affects the transport budget for the local authority? Will the DfE pick up the extra costs or establish some form of insurance scheme?

Presumably, when a new sponsor takes over the running of part of an existing chain there will have to be a financial reckoning as well, especially as academy budgets run to a different cycle than that of local authorities and central government. Will any existing service contracts with the academy chain be automatically continued or regarded as up for renewal as a result of the loss of responsibility?

Hopefully, these issues will be rare occurrences, but new developments in any field often come with associated failures, so they must not have been unexpected. When a whole local authority is judged unacceptable, it is clear what happens, as it is when a single school fails. However, the failure of a group or part of a group of schools brings these fresh challenges, especially, potentially, in relation to the assets.

All these questions highlight the desperate need for an effective middle tier for state education in England operating within an overall framework that clearly delineates areas of responsibility. The relative functions of the national government at Westminster, local authorities, the churches and other faith groups, and the non-aligned academy chains, plus the large number of independent sponsor academies, all need to be able to operate within some form of secure and understandable framework. At present, especially for the primary sector, the fastest growing area for academy development at present, the rules are still unclear. Approaching four years since the 2010 Academy Act became law this is not an acceptable position of schooling across England to find itself in.

More financial pressures for DfE

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In the week that the Minister of State at the DfE announced the final figures for the Pupil Premium in 2013-14, with a £53 Christmas bonus for primary school pupils receiving the cash this year, and an increase to £1,300 for primary age pupils in 2014-15, the government also announced the latest thinking on school rolls until the early 2020s.

At the present time, there is still no end in sight to the growth in the primary school population that will increase from a low point in 2009 of 3.9 million pupils to a predicted 4.8 million by 2022. That is a rise of nearly 850,000 pupils, or an increase in the primary school population of more than a fifth in thirteen years. The secondary school population in years 7-11 is still on schedule to bottom out in 2015, at just over 2.7 million pupils, before recovering to just over 3.0 million by 2022, with more increases to come in the rest of that decade.

An extra million or so pupils by 2022 will place considerable strain on education finances that currently cost the nation £27 billion just for the remaining local authority maintained schools, with the costs of academies in addition. (Academies have a different financial year to local authority schools thus making comparisons almost impossible.) In 2012-13 the average cost of a primary school pupil in a maintained school was £4,193, up from £4,099 the previous year. On that basis, the additional 600,000 pupils expected in the primary sector by 2022 will cost £2.5 billion by 2022, even without the compounding effects of inflation during the intervening years. It is difficult to see how the government will be able to protect school budgets throughout the whole of that period since an economic recovery rarely lasts for a decade, and a more likely scenario is that the economy will have traversed through another whole economic cycle during that period. Hopefully, the downturn will not be of the same magnitude as was inflicted on the economy during the Labour government under Gordon Brown’s stewardship.

With around half of primary school expenditure going on teaching staff, and recruitment pressures already emerging, according to the teacher associations, sorting out the wages bill may become even more important in the future if expenditure is not to spiral out of control. However, after so many years of pay restraint that may be easier said than done. The imposition of any national funding formula for schools in 2015 that doesn’t take account of differing labour market pressures is probably doomed to failure, with some potentially dramatic repercussions if the government miscalculates. It will not be enough to say that the decision can be left to schools, as they are too diverse a group to be able to manage any substantial pressures on what amounts to half their budgets.

Mr Gove has not shown himself very good with numbers, but he will surely not want his legacy to be a school system not prepared for the financial challenges that lie ahead.

550 more primary school teachers needed for London in a few years time

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Mid-year estimates from the Office of National Statistics released today* show around 9,000 more children in London in the under-one age category compared with the number of one year olds. That’s a big jump, and more than 20,000 greater than the number of five year olds. If these children stay in the capital then the pressure on services, and not least on schools, is going to remain intense. At least 500 extra teachers will be needed when those born since the last figures were published reach school-age.

Although the present supply of teachers for the primary sector is adequate, the government will need to watch for any decline in interest in teaching the early years, and be prepared to improve the limited funding to encourage training and working in London if such a decline occurs. Fortunately, there is some, but not much, relief from the figures for the South East where there is a slight drop in the totals, but it is only just over a thousand. Elsewhere across the regions of England there don’t seem to be any dramatic changes in the number of under-ones compared with the total of one year-olds.

Pressure on childcare and nursery places is going to be felt ahead of the problems facing the school but at least the government and local authorities have time to respond to the population growth. I personally doubt whether ‘free school’ will be the answer and however much Mr Gove may not like local authorities he would be well advised to ensure that they have sufficient funds left for planning how to handle this increase. No doubt the Mayor of London will also have something to say about the issue since strategic planning for the whole of London is one of his concerns.

Funding these extra pupil numbers is going to be one of the biggest challenges facing education planners over the next decade, especially as class sizes are fixed at a maximum of thirty for the under-7s. Finding space for all the new classrooms is going to almost as big a challenge.

* http://www.ons.gov.uk/ons/publications/re-reference-tables.html?edition=tcm%3A77-319259

Are academies hoarding their cash?

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What’s the use of giving schools money they don’t spend? This has been a theme running through this blog ever since the first entry way back in January. The latest figures for academies and the other esoteric school types funded from Westminster shows that these schools were in some cases no better than their maintained counterparts in using revenue cash to support the learning of their pupils. https://www.gov.uk/government/publications/income-and-expenditure-in-academies-in-england-academic-year-2011-to-2012

No doubt the Treasury will eventually ask why school budgets should be protected if the cash handed to them is promptly put in the bank. Mr Clegg might also ask whether schools are really helping in his drive for a million new jobs by sitting on plies of cash.

Anyway a few numbers:

For 2011/12, the median total income (£ Per Pupil) for secondary academies with Key Stage 4 was £6,333, compared with £7,880 in 2010/11. The decline between the two years may indicate exactly how much initial converter academies were funded in excess of what they had previously received as maintained schools.

According to the DfE, the changing composition of secondary academies, with increasing numbers of converters, has narrowed the difference in total income (£ Per Pupil) between academies and maintained schools (secondary with KS4). For 2011/12 the median total income (£ Per Pupil) for academies (secondary with KS4) was £713 higher than maintained schools (secondary with KS4), compared with £2,469 in 2010/11. Many might ask why median total income per pupil in academies is still more than £700 higher than median per pupil income in maintained schools.

For 2011/12, the median total expenditure (£ Per Pupil) for secondary academies with Key Stage 4 was £6,058, compared with £7,405 in 2010/11. For 2011/12 the median total expenditure (£ Per Pupil) for academies (secondary with KS4) was £556 higher than maintained schools (secondary with KS4), compared with £2,052 in 2010/11. Nevertheless, an academy with median income and expenditure per pupil still banked £275 per pupil. For a school of 1,000 pupils that’s £275,000 just over 4% compared with 6% in the previous year. However, as this is the median figure it may not be as helpful as either the mean or modal class would be.

The trends are similar for secondary schools without Key Stage 4 and for primary and special school academies, although the small numbers make comparisons not really sensible.

A quick bit of arithmetic with the raw data suggests that the overall balance in academy bank accounts might be in the order of £175 million including muli-academy trusts where data is available. Around 100 academies may be sitting on cash pies in excess of £1 million each, and this figure is supposed to exclude any reserves held by the schools before they became an academy. However, there are also a large number of academies that appear to have spent more than their incomes.

We will need to see a few more years of data in order to discover whether these initial figures represent a trend. However, we won’t need to wait to discover whether the portion of grant income spend on teaching costs is similar to that in maintained schools. After all, one of the reasons for providing academies with their freedom was to allow them to spend their funding as they see fit to improve the standard of education of their pupils.

Funding for new school places: who has the ultimate responsibility?

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The Public Accounts Committee has just published a short report into the Department for Education and the capital funding for new school places* following anxiety about the supply of places to meet the growth in the school population. It is worth highlighting the following paragraph from the summary of the Committee’s Report:

The Department does not have a good enough understanding of what value for money would look like in the delivery of school places, and whether it is being achieved. In response to fluctuations in local demand local authorities can direct maintained schools to expand or close but do not have this power over academies or free schools. Local authorities need to have mature discussions with all parties, including the academies and free schools, to resolve any mismatch between demand and supply for their communities as a whole. We hope that discussions at local level always prove successful, but the Department needs to be clear about how it will achieve the best value for money solutions in the event that local discussions fail to achieve a resolution. This has to be in the context that Free Schools and Academies are directly accountable to central Government, but the Government has no mechanism to force them to expand to meet the demand for school places. In addition, the Department does not sufficiently understand the risks to children’s learning and development that may arise as authorities strain the sinews of the school estate to deliver enough places. The imperative to increase the quantity of school places should not be achieved at the expense of quality.

This debate was further articulated in paragraph 14 of the report. The Committee asked the Department how it would resolve matters if, for example, it would be better for an academy or free school to expand or to close in accordance with changing demand in an area, but the particular school(s) did not wish to do so. The Department told The Committee that such situations are best settled by sensible discussions between professionals in the area concerned. The DFE said that such situations are intensely local and that, as opposed to a central direction from government, it would rather see local authorities and schools working collectively to meet such challenges. The Department assured us that it monitored these matters closely and that all cases so far had been resolved properly by discussion. The Department stated that, were it not to find a solution through discussion, it would look at the individual circumstances and make decisions accordingly. The parties involved need to be confident that a process to resolve these matters exists.

The Committee’s Report commented it hoped that discussions at local level always prove successful; it added, however, we would like to receive greater reassurance about the actions the DfE will take in order to help resolve matters to achieve the best value for money solutions in the event that local discussions break down.

Now in response to what is happening in Oxfordshire, I find the DfE’s comments curious since they have side-stepped the question of what happens if the DfE sanctions a new school where there is clearly an over-supply of places in the short-term. Both the UTC in Didcot and the Studio School in Banbury are in areas where the local supply for school places in the 14-18 age range is clear sufficient for the next few years, unless there is a dramatic upturn in house building. That hasn’t stopped the DfE introducing these two new schools that will make the position in terms of overall places even worse in the short-term, as I indicated in an earlier column. Whether the capital resources would have been better applied providing additional primary school places in schools where parents want their children to attend is a moot point. Indeed, the Committee recognised that the present system might force local authorities to expand poorly performing schools, because they had no choice of an alternative.

It does seem odd that more than 140 years after the creation of State Education such a basic issue as the provision of places for every child should have caused so much confusion and anxiety. It may be fun to create new types of school, reform the curriculum, or even take on the teachers, but a Secretary of State also has a Department to run, and successive holders of that office under both the present coalition and the previous government don’t always seem to have realised their duty of care to provide a service fit for everyone who uses it, and not some of them. The next crisis in Minister’s in-trays is probably around the matter of teacher supply. Let us hope that they don’t make the same mistakes as has happened with the supply of school places. The provision of teachers is, after all, just as basic an issue as the supply of places. After 140 years we ought to be getting both right not risking serious shortcomings in both. That’s not the way to a world-class education system.

* http://www.publications.parliament.uk/pa/cm201314/cmselect/cmpubacc/359/35904.htm

Funding per pupil, spending by schools: does it give value for money

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‘Many of the important operational financial decisions of schools are largely idiosyncratic.’ This was the finding of a DfE sponsored research project that reported in 2012. Earlier today David Laws as Minister of State issued a written ministerial statement on future funding for schools in 2014-15. In the end, whatever decisions are made about how to fund schools, the spending decisions are now taken at the school level. How idiosyncratic schools’ individual decisions are can be determined, at least in historical terms, by an analysis of the raw data the DfE now publishes on its web site

Recent data for academies allows comparisons between such schools expenditure patterns. The latest data is for the school-year 2010-11 since it seemingly takes longer for the private sector to produce accounts than for state owned schools, where data up to March 2012 has been in the public domain for some time now. It would be invidious to look at academies starting in 2010, since they would not have a full complement of pupils, and there are always extra start-up costs. However, taking four academies outside London with starting dates between 2003 and 2008 provides an interesting picture of expenditure over four different categories.

Teaching

All academies with Key Stage 4: National median expenditure £3,544

The 4 academies  £2,047  £3,512  £3,700  £4594

Cleaning

All academies with Key Stage 4: National median expenditure £29

The 4 academies  £65  £72  £99  £123

Staff Development

All academies with Key Stage 4: National median expenditure £71

The 4 academies  £24  £53  £81  £92

Educational Supplies

All academies with Key Stage 4: National median expenditure £603

The 4 academies £602  £779  £880  £885

On every element there is a wide range of expenditure between the four academies. It is important that boards of directors of academies do these sorts of comparisons just as much as governing bodies of community schools so that they can justify the use of what is still in the final analysis public money.

The new funding arrangements for 2014-15 may be the last before a major reform that will grapple with the vexed question of regional funding levels, as well as those at the individual school level. The greater flexibility for the funding of small schools in rural areas highlighted in the ministerial statement will no doubt be welcomed by many in the shire counties and unitary authorities in rural areas, but the approach could mean the end of some small urban primary schools unless they have relatively low overheads and staffing costs towards the lower end of the range. There won’t be many TLRs in those schools, and the new pay arrangements might mean these were the first schools to face the staff with the choice of an increment or the closure of the school.

School funding arrangements will never please everyone, but it is clear that value for money benchmarks that governors and directors of schools can benchmark their own schools against might be a useful aid to constructing budgets and helping ministers decide the funding mechanisms for the future.

Good schools for all or just for some?

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Should society concentrate on making entry to good schools fairer rather than trying to expand the number of good schools? The Sutton Trust Report published earlier today about eligibility for free school meals at the top state schools seemingly opts for supporting the former approach. That’s not surprising since it paints a dismal picture where in the top 500 comprehensive schools the overall rate of pupils eligible for free school meals is half the national average, and only 40 of the 500 top comprehensive schools have higher free school meals than the national average. Indeed, since the Sutton Trust first looked at the issue of the number of pupils on free school meals in top performing schools little has changed, except that more pupils are entitled to free school meals as a result of the recession.

Top State Schools            Local Area of school       National Average

2005 Study          3%                                          12.3%                                    14.3%  Mostly selective schools

2006 Study          5.6%                                      13.7%                                    14.3%  200 comprehensive schools

2013 Study          7.6%                                      15.2%                                    16.5%  500 comprehensive schools

Schools in the top 500 are, according to the Sutton Trust study, more likely to be faith schools; single sex schools; converter academies; voluntary aided schools. Some schools may fall into more than one of these categories. All of these types of schools control their own admissions policies.

The alternative approach, making all schools good schools, is the driver that underpins the coalition’s Pupil Premium policy of adding extra revenue support to pupils on free school meals. The top 500 comprehensive schools won’t see much of this money. The Pupil Premium policy tackles the issue of where children are now, not where the authors of the Sutton Trust study might like them to be. Interestingly, the study is silent about what would happen to pupils displaced from the top 500 schools by those on free school meals? Is it assumed that their parents would lead the drive to improve the schools their offspring ended up at?

Ever since the attempts in the 1960s and 1970s to create a rational secondary school system to replace a system designed for an age when the majority of pupils left school at 14 to join the workforce, secondary schooling has all too often been about social segregation in the urban areas, rather than a force for greater social cohesion. The philosophy inherent in the Sutton Trust report seems to be that of offering an escape route to better education for the deserving poor rather than accepting the view that being poor should not mean having to accept a lower standard of schooling from the State for your children.

A good school for all has always been the standard I want our education system to strive for. Looking at what has happened in London over the past decade shows what can be done. I believe it starts with good quality primary schools for all. As a nation we aren’t there yet, and indeed we are often too fixated about the secondary sector. I firmly believe that good primary education will mean more good secondary schools, and ease the debate about admissions policy. After all, those children who live in really rural areas generally have no choice in the matter about where they go to school: they deserve to go to a top school as much as any other child.

Planning School Places: More than just about the numbers

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On Friday 15th March the National Audit Office issued what can be seen as a critical report about capital funding for primary school places in England http://media.nao.org.uk/uploads/2013/03/10089-001_Capital-funding-for-new-school-places.pdf

The media, as might be expected, latched on to the fact that 250,000 extra places will be needed by September 2014, with a further 400,000 required by 2018, rather than the more technical discussion about the manner in which places are funded, and the value for money associated with the process. The figures for pupil places required are not new, although the shortfall still remains too large, and until recently hasn’t been treated with any degree of urgency at Westminster.

More important than the numbers is what can be read into the Report about the two competing ideologies in British politics – on the one hand, the market as a mechanism for solving all problems; and on the other some form of state planning. The post-war period has been marked in many parts of the public sector by a shift from a planning-based approach to public policy to a more market-based approach. The current generation of think-tank and policy research probably don’t realise that in September 1939 when DORA was introduced overnight (Defence of the Realm Act), using the experiences gained during the first World War, Britain became one of the most controlled and planned societies in the world: today planning is a concept that often seems to have a bad name in public sector policy, especially in education. However, the NAO Report ought to mark a reappraisal if not a turning point in the debate.

In the private sector, future planning is an integral part of every successful business. Just consider the fate of either those retailers that didn’t plan for the effect of the internet on their customers or the train operators who have failed to cope with a record growth in passenger numbers. Without planning comes not just chaos, but also inefficiency and public disappointment that eventually can lead to a sense of dissatisfaction with politicians. Now of course, planning isn’t an exact science, and bad planning can result is poor outcomes for society. But, planning for school places ought to be a basic part of the management of our education service.

Part of the reason for the failure in dealing with provision for the current upswing in the birth rate is undoubtedly the breakdown of the arrangements for controlling schools that stared a quarter of a century ago with the Education Reform Act, and site-level  management of schools. When the Labour Government invented sponsored academies to take over failing schools they destroyed many of the remaining education planning frameworks without making clear what would replace them. With Westminster and Town Hall both either unable or unwilling to take on the responsibility, there has been a sense of drift and ‘passing the buck’ rather than of co-ordinated planning: hence the NAO’s concerns about both numbers and value for money.

One outcome will be that parents in many areas are now faced with Hobson’s choice over what school they can send their child to, and the notion of parental choice will become, like the red squirrel population, restricted to ever smaller areas of the country, at least for the next decade.

Those parents whose children are starting school in locations where selective education still divides children at eleven might also want to consider how their secondary school system will cope with the increased numbers, and whether a system designed in the Nineteenth century for the few fits the educational needs of the many in the Twenty First century, one where all students will be expected to remain in learning until they are eighteen, irrespective of parental income or status.

From my perspective, however we procure the school places, and that might be through a market based approach, the State has a duty to ensure all pupils have a school place available to them that is not an unreasonable distance away from their home and doesn’t demand they attend a school that has an ideology or teaching methodology objectionable to their parents. To fail in planning for this basic task, while still requiring parents to send children to school, if not educated elsewhere, under pain of the criminal law, is a basic failure of government that is unlikely to go unpunished at the ballot box; although whether the right tier of government will shoulder the blame only time will tell.

If the provision of school places isn’t at the top of Minister’s agendas at present then it ought to be. There may be more fun tasks, but concentrating on the basics must now be top of both Ministers and officials ‘to do’ lists. History will judge a Secretary of State harshly if he or she as steward of our state education system fails to provide enough school places during the next decade.