‘Bankrupt’ councils eye education budgets for savings

School leaders urge government to invest more in public services amid potential cuts

School leaders urge government to invest more in public services amid potential cuts

“Bankrupt” councils are proposing hikes to school catering fees, cuts to educational psychology costs and the replacement of school crossing patrol workers with volunteers.

Seven councils have issued section 114 notices – which mean they are unable to set a balanced budget – since 2020, with the Local Government Association (LGA) warning that 17 per cent of authorities think it is likely or very likely they will issue such a notice in 2024-25.

This week, Labour-run Nottingham City Council published proposals to address its £50 million budget gap for 2024-25, after issuing its section 114 report last month.

As part of plans to shave £1.2 million from its education budget it wants to reduce education psychology costs by “securing assessment at better value”, which it estimates could save £25,000 over two years.

The authority is also looking to an annual increase in school catering fees to generate £150,000 in extra revenue.

Currently, families whose children are eligible for free school meals can access support with uniforms through the household support fund, which is due to close in March. If the grant is not extended, Nottingham’s uniform support will “cease”.

Transport costs covered by schools could also rise in 2024-25 in “line with inflation to ensure that the service continues to fully cover its costs”.

Nottingham also plans to cover all of the costs of its welfare and virtual school teams from the dedicated schools grant, as long as it can get its schools forum to agree.

A final decision on the savings will be made at a full council meeting next year, so the proposals may change.

But Sheena Wheatley, the secretary of the National Education Union for Nottingham, said she was “very concerned about hidden cuts to schools’ budgets” when they were under “immense financial stress”.

For instance, she said schools could step in to fill the void if there were any further cuts to community services.

David Mellen, the council’s leader, said proposals were for “significant savings and service reductions that no one would want to make”.

But they “have to be considered by councillors if the council is to meet its legal requirement to set a balanced budget”.

Conservative-controlled Thurrock Council in Essex proposed earlier this year to review school crossing patrols and “explore provision through the voluntary sector” for a saving of £45,000.

It is not clear if this went ahead as the council did not respond to requests for comment.

It issued a section 114 notice in December last year.

Birmingham City Council, which issued a notice in September, published plans to save £150 million ahead of setting a final budget next year.

The Labour-run council proposed cutting £57 million, a 13 per cent saving, from the children and families directorate, which includes education, early years, SEND and social care. 

Schools Week reported in September that schools in the area were still waiting for their budgets after Birmingham splurged millions on a “disastrous” IT platform.

Geoff Barton, the general secretary of the school leaders’ union ASCL, urged councils to do “everything they can” to avoid impacting schools, although the union recognised the problems originated in national government.

He said “everyone involved in education” was “doing their best” to protect provision for children and young people. “But it is inevitable that less money has an impact and that this will get worse unless there is action by central government to invest more in public services”.

A survey by the LGA published last week found 7 per cent of chief executives or council leaders thought they were very or fairly likely to issue a section 114 notice in 2023-24.

This rose to 17 per cent when they were asked about 2024-25.

More than a quarter (29 per cent) of respondents were not very confident or not at all confident that their local authority would have enough funding to fulfil all of its statutory duties in 2023-24. This was 50 per cent for 2024-25.

The DfE said it would “continue to work with Nottingham local authority to ensure that their spending on the dedicated schools grant is compliant with the conditions of grant – just as we do with all local authorities”.

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