Schools face cash clawbacks after overpredicting pupil numbers

Hundreds of schools that overestimated their pupil numbers last year will have to repay £33 million in funding to the government, as a minister warned trusts are “pumping up” pupil forecasts to balance their budgets.

Schools Week can also reveal that the government is now offering the estimated pupils funding model as a “sweetener” in rebrokering packages to entice trusts to take on failing schools.

Freedom of information figures seen by Schools Week show that almost half of the 660 academies and free schools funded under this method last year actually overpredicted their pupil numbers.

The schools now have to repay around £32.9 million to the government. However, this is less than the £50 million owed in the previous year.

Critics say offering the option of the estimated pupils funding model to some trusts but not others is unfair, as it means those approved to use the system can get extra upfront funding.

If a trust under-recruits pupils, the extra funding doesn’t have to be paid back until the following year, although some trusts have negotiated deals to pay the money back over a few years, or even had the debt written off.

Mary Bousted, joint general secretary of the National Education Union, said the funding should not be used for “one type of school effectively as a sweetener”, adding it exposes a lack of sponsors to take over struggling schools.

It follows a warning from academies minister Lord Agnew that trusts are “pumping up the projection on the number of pupils” in the hope their financial problems “will be solved”.

He urged school business managers at the Institute of School Business Leadership conference yesterday (Thursday) to be “the voice of moderation” who stop trustees from overestimating forecasted pupil numbers.

The FOI response revealed that 304 schools of the 660 schools funded that way, overpredicted their pupil numbers. A quarter of the schools predicted their pupil numbers correctly and didn’t owe any money, while the rest underpredicted their pupil numbers so were actually owed funding from the government.

As in previous years, university technical colleges fared badly. Of 49 UTCs that are still open, 30 under-recruited pupils and now have to pay back more than £6.5 million between them.

However the biggest debt owed by a single school last year was £708,707, owed by Folkestone Academy (secondary) in Kent.

A spokesperson for Turner Schools trust, which runs four schools including Folkestone, pointed out the calculation was made in November 2016 before the school transferred to the trust.

They added the trust is in discussion with the DfE because it believes the correct clawback figure is “significantly less than the figure cited”.

Folkestone is one of 54 rebrokered academies that appear in the list of institutions owing money to the DfE last year that had overpredicted their pupil numbers.

The government has admitted trusts may be offered the estimate funding model as part of a “recovery package” to take over a struggling school for a “limited time period to allow for recovery”. However Turner Schools made clear it took no funding sweeteners in exchange for taking over Folkestone.

“Where trusts have taken on failing schools estimates provide stability for growth as the educational performance improves,” a DfE spokesperson added.

Pam Tuckett, partner at accountancy firm Bishop Fleming, said academies funded on estimated pupil numbers “usually get the funding because they’re growing – and it all tends to be down to negotiation”.

Pam Tuckett

Examples of growth include if the school received a better Ofsted grading, or a nearby school was closing down, Tuckett said.

But the “benchmark” for gaining estimated funding isn’t clear, she added.

She spoke of one school she worked with which received estimated pupil number funding after predicting its pupil numbers would expand by just 10 per cent. This was one of the lowest predictions Tuckett had ever encountered from a school that went on to be successful in securing the funding.

Schools Week has previously revealed how schools owing clawback have had the debt written off. The highest write-off was £1 million owed by the Greenwich UTC.

However in the most recent FOI response, the DfE said it is “currently in the middle of the standard recovery period for 2017-18 and are therefore unable to provide a full update on the status of repayment plans and write-offs”.