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Councils begin to top-slice from school budgets to replace ESG funding

More than 60 councils have been given permission to top-slice money from school budgets to make up for cuts to a central government grant.

Councils stopped receiving the education services grant (ESG) last September, and the 2018-19 financial year is the first without transitional funding in place to soften the blow.

The money town halls received via the ESG to fulfil their legal obligations such as school place planning has been replaced in the form of a “central school services block” in the dedicated schools grant. This covers councils’ statutory duties for both maintained schools and academies.

But the general funding element of the ESG, which covered extra services specifically for maintained schools like legal costs and improvement services, is no longer paid, leaving schools to foot the bill.

Now the government has revealed that 61 councils have been given permission by their schools forums to top-slice money from maintained school budgets from this April, to cover those non-statutory duties previously paid-for by the ESG.

The councils were named this week by Nick Gibb, the schools minister, in response to a question from Liberal Democrat education spokesperson Layla Moran.

“The general funding rate of the ESG was only for the responsibilities that local authorities held for their maintained schools,” explained Gibb.

“Local authorities can fund services from the maintained school budget shares, with the agreement of the maintained school members of the schools forum, to meet these responsibilities.”

The government announced its plans to scrap the ESG at the 2015 spending review in order to save £600 million, prompting warnings that councils would struggle to support schools. Earlier this year, it was revealed that academies would lose £353 million by 2020 as a result of the cut.

A Department for Education spokesperson said it had taken the “difficult decision” to cut the ESG “in order to protect the core schools budget”.

 

The list of councils given permission to top-slice is as follows

Camden

York

Lambeth

Bedford Borough

Southwark

Buckinghamshire

Tower Hamlets

Derbyshire

Wandsworth

Poole

Bexley

Hampshire

Brent

Portsmouth

Ealing

Staffordshire

Havering

Swindon

Hillingdon

Bracknell Forest

Hounslow

West Berkshire

Merton

Reading

Waltham Forest

Cambridgeshire

Sandwell

Peterborough

Solihull

Halton

Wolverhampton

Torbay

Knowsley

Essex

Sefton

Herefordshire

Wirral

Medway

Manchester

Blackburn with Darwen

Trafford

Blackpool

Wigan

Shropshire

Doncaster

Telford and Wrekin

Leeds

Cornwall

Wakefield

Gloucestershire

Newcastle upon Tyne

Hertfordshire

North Somerset

Isle of Wight

Hartlepool

Somerset

Redcar and Cleveland

Surrey

Kingston upon Hull

West Sussex

North Lincolnshire



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4 Comments

  1. I’m puzzled. Didn’t LAs always retain some of the funding awarded to maintained schools to pay for admin and legal services? One of the selling points of academies was that academies would be able to keep this top slice.

    • Hi Janet
      Schools have for some time bought back services like finance, HR, Legal, ICT etc but only where they are delegated school functions which they didn’t want to do themselves.
      ESG was for statutory duties that the LA had to do behind the scenes for LA schools. Page 44 onwards of the Operational Guidance for 2018/19 contains a useful table that explains these: https://bit.ly/2sXliUm .

      The first column is the former Retained Duties ESG and the second is the General ESG which also went to academies. The latter was cut for academies at the same time as the LA grant, except that academies already in receipt of protection have continued to receive it on a tapering basis.

      I have no idea why DfE thought it was a good idea to withdraw a grant and put LAs in the situation of having to go cap in hand to schools for the money to replace it, when these are statutory duties that the LA cannot refuse to do! Authorities that haven’t asked schools for money must have found it from Council funding, as these items can’t be charged to the Schools Block.

      • Janet Downs

        Julie – thanks for the info. I’ve had a look at the operational guidance. I thought I was well informed about educational matters but I found the guidance so detailed as to be confusing. (Perhaps I read it too early on a Saturday morning).
        A cynic might say the withdrawal of a grant and the publication of detailed ‘guidance’ might be a ploy to allow the DfE to deflect complaints about school funding by saying such-and-such is an LA responsibility (while at the same time slashing overall funding for LAs). But I couldn’t possibly comment.