State school debts rise to £103m – but rich schools get even richer

State school debts rise to £103m – but rich schools get even richer

A “wealth gap” appears to be emerging between schools rich in cash and those struggling to pay their bills.

Total budget deficits for local authority (LA) maintained schools rose from £76 million in 2013/14 to £103 million last year.

But the percentage of schools running a deficit has remained largely the same – meaning the most financially unstable schools are falling further into debt.

At the same time, the average surplus for schools rose from £129,620 in 2013/14 to £134,427 last year.

Shadow education secretary Lucy Powell said: “This is yet more evidence of the big financial challenges that many schools face over the coming years, with the risk of larger deficits if the government fails to provide adequate mitigation for those set to lose out through changes to the funding formula.”

She said it was now “vital the government takes action”.

The figures were part of the schools, education and children’s services spending document published by the Department for Education (DfE) last week.

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Malcolm Trobe, deputy general secretary of the Association of School and College Leaders, said the overall picture was “worrying”.

While the percentage of primary schools running a deficit fell from 5 per cent to 4.2 per cent, the number of secondaries rose from 11.2 to 15 per cent.

Micon Metcalfe, business manager at Dunraven School, south London, said the figures appeared to show a group of rich primary schools bucking the trend and increasing their balances.

“Those in deficit appear to be within manageable proportions – but it depends on the size and budget of the school.”

The number of LA maintained schools running a deficit has actually fallen from 1,057 in 2103/14 to 948 last year.

But increasing academisation means the number of schools under local authorities has fallen from 18,708 to 17,693.

The percentage of locally maintained schools running a budget deficit in both years has remained largely the same.

Mr Trobe said the divide could be fuelled by academisation: “Academy trusts are very reluctant to take on a school with a deficit.”

Overall, 93.4 per cent of LA schools ran a surplus last year, worth a total of £2.22 billion and slightly down from the £2.26 billion of the previous year.

Ms Metcalfe added: “With so much money in school balances you can see why the government is not afraid to keep squeezing.”

But next year’s figures could reveal more problems, as they will show the impact of increased pension contributions that schools started paying in September.

A regional breakdown showed 132 of the 152 local authorities allowed schools to run a deficit last year.

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In the north west 108 schools ran a deficit totalling £19.6 million, followed by London with 92 schools with deficits of £16.3 million. Birmingham had the largest total deficit (£7.6 million). It is the largest local authority in the country.

A spokesperson for the Department for Education said the government was “committed to making funding fairer.

“This is vital to our goal of extending opportunity and providing educational excellence everywhere.”