School budgets raided of £22m to replace scrapped ESG funding


School budgets have been raided to the tune of tens of millions of pounds by cash-strapped councils scrambling to make up an education services grant funding black hole.

Thirty-six local authorities have top-sliced more than £22.4 million from school budgets between them this year to make up for the loss of the education services grant, analysis shows.

Some councils charge over £60 per pupil.

The finding is heaping further pressure on already squeezed school budgets – which are also facing hikes in pension contributions amid squeezed funding.

We really need the government to listen to councils, headteachers and parents about the very real impact that budget reductions are having

The real top-slice figure is also likely to be much larger because dozens more councils have been given leave to skim money from schools. It is also understood more councils are set to ask permission from their schools forum to do the same next year.

At the same time, town halls have warned they are still top-slicing far less than they used to receive from the government, leaving them in a worse financial position to help their local schools.

Headteachers have hit out at the situation, calling it “classic robbing Peter to pay Paul”.

The education services grant was slashed in 2017, and although funding for councils to fulfil certain legal duties such as place planning was retained in the form of “central school services” funding, councils lost money for the general funding element of the ESG, which covered extra services such as legal costs and improvement services.

It was revealed last year that 61 councils had been granted permission by their schools forums to top-slice money for these general services – such as legal costs and improvement services – in 2018-19.

Of those, 36 responded to Schools Week’s enquiries, admitting to a combined top-slice of £22,419,459 million this year.

The highest top-slice rate was in Bedford, where the £600,980 top-slice in 2018-19 represents 1.4 per cent of the schools budget.

Other councils with a large top-slice were the Isle of Wight (£600,000, or 1.3 per cent), West Sussex (£2.2 million, or 0.77 per cent) and Wakefield (£392,276, or 0.62 per cent).

Minutes from West Sussex’s schools forum meeting in December 2017, where the top-slice was approved, show discontent among some members.

“Many responses commented on the impact of the charge on school budgets despite the increased funding allocated in as part of national funding formula arrangements,” it said.

“Other responses did not support the charges in view of the pressures on school budgets. Some responses reluctantly supported the proposed charge.”

A West Sussex County Council spokesman said it had had to “significantly reduce our costs for the services we provide our maintained schools.

“This ensures the amount we now charge schools for services like school improvement is kept to a minimum.”

Jules White, a West Sussex headteacher who leads the WorthLess? school funding campaign, told Schools Week the top-slicing was “classic robbing Peter to pay Paul”, and said his campaign stood in solidarity with councils forced to pass on the cuts in order to protect “critical services”.

The amount top-sliced per pupil also varies significantly between areas, from £5 in Gloucestershire and £7.80 in North Lincolnshire to £66 in Medway, Solihull and York.

There is a benefit to this flexibility as local authorities are best placed to understand the needs and requirements of their local area

However, despite the high per-pupil rate charged, a Medway Council spokesperson said the money taken from schools “does not cover the full cost of delivering these services and we use funding from our own resources to cover the shortfall”.

Jasmine Ali, cabinet member for children, schools and adult care at Southwark Council, which took £350,000, or 0.13 per cent of the schools budget to pay for its services, said: “We really need the government to listen to councils, headteachers and parents about the very real impact that budget reductions are having.”

A DfE spokesperson said ending the ESG had been a “difficult decision”, and pointed to £450 million of funding that still helps councils with their retained duties.

“This new funding model means that local authorities can choose to fund some services for maintained schools from their schools’ budgets, with the agreement of their local schools forum.

“There is a benefit to this flexibility as local authorities are best placed to understand the needs and requirements of their local area.”

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  1. Tracy Doyle

    It wasn’t a ‘difficult decision’ by the Dfe – the deletion of ESG was part of the plan for all schools to be academies in MATs. That requirement was dropped, but the cut to esg continued.

    • Alistair Thomas

      I doubt even the DfE thought this was a good idea – this was Osbourne-Treasury think, pure and simple. Since it was exercised with without consideration for the consequences, I too doubt that it was difficult. Simple, stupid, destructive? Yes. Difficult? In fact, rather too easy. Not enough sensible voices in the rest of government to naysay this callous insanity.

      I think Gove used ESG as an inappropriate bribe for Academies under the guise of freeing them from LA interference. In terms of school improvement funds this was effectively allowing them to mark their own homework, and for wider safeguarding or support for ethnical minorities, for those that didn’t actually have the problems it was free money, and for those that had the need then the money may not have been proportional. Certainly the LAs were left with the whole of the problems with a diminishing part of the funds to work with.

      New Academies don’t get the money anymore, and even the original ones may have had it taken away by now, so the removal of ESG has became a challenge for all schools, not just LA-maintained ones.

  2. Alistair Thomas

    And now the penny finally drops? And even now, talk of £22M entirely mispresents the scale of the problem.

    The power to de-delegate (maintained schools allowing LAs to top-slice more of the school budgets that central government insists) is exercised by schools’ forums (made up of representative school leaders). In counties like Worcs, we simply refused to play ball.

    The ESG covered big things like School Improvement – big things that should be outside of individual school control; support for Gypsy Roma Traveller communities – highly localised things, not experienced by 80% of schools and yet a civic responsibility of the whole community; and safeguarding between schools and phases – visibility (and support) for vulnerable children as they move through the system.

    If central government couldn’t see the importance of such vital services, then it wasn’t sensible for schools to compromise the schools budget, already under massive pressure and riddled with disparities due to previous funding policy, even further. Yes, vital services would suffer or even cease. Responsible local authorities like Worcs tried to fill in the hole. Some of this will be genuine concern for the problem, some of it will be local politicians desperately trying to cover up the incompetence of their national colleagues. Some of this money was taken from ocal people via council tax. Part of the problem was that it was too big to fix locally. £600M had been stolen from the budget by Osbourne, albeit in two phases. This was an act of national vandalism that was just too big to compensate for through local measures.

    Don’t get me wrong. The ESG system before Osbourne got his hands on it was not fit for purpose. Part of the problem was that Academisation had seen this money (that needs to be coordinated at scale outside of schools) given to schools to “avoid LA interference” – Insanity No1 – Thanks Gove. The main part of the problem was that the ESG was given to LAs with little prescription. Nominally 15% was ring-fenced for statutory duties (admissions etc) and whilst some of the rest was needed to cover those duties because 15% was never enough, much of the ESG wasn’t ring-fenced and some councils even saw it as “Council Money” – an odd concept even when coming from Council Tax – I might allow guardianship (responsibility) but never ownership (patronage). It’s always our money, not theirs. 151 LAs reinventing the wheel with highly variable competence and sense of responsibility, coloured by political priorities was never going to be a pretty, consistent or efficient system.

    What was (and still is) needed was a national concept of essential services, actually for all of education 0 – 25, not just schools. Delivered locally (council geography) but coordinated regionally and nationally. Overseen by education leaders rather than local government. Each service would be funded according to need, not on some simplistic funds per pupil as the old ESG. In other words, counties with poor schools would get more money to turn the problem around. Safeguarding would not just work between schools or phases, but across counties if need be. In areas like “School” improvement, now Education improvement, the best providers (nurseries, schools, colleges) will ultimately get these funds by providing the service to turn around their struggling neighbours. This latter is one of those rare areas where Academisation is the ideal vehicle to deliver this. Last but not least, the provision of such essential services is much harder and more expensive is a sprawling rural county than in a highly compact urban area, and funding must reflect this.

    It’s clear that central government lacks the vision to provide the required leadership. Few of them have ever worked in state education, fewer still were probably educated by it, so they lack the understanding to even articulate the problem, let alone suggest the solution.

    This depresses me, but I really despair when the education press scream about the minutiae but can’t even place them in the context of the big picture. Lousy title, some good content but poor or missing conclusions. Could do much better – see me after school.