‘Untenable’: Council schools in deficit soar as costs keep rising

Policy experts said the dire situation could 'force' local authorities to 'relinquish' their maintained schools

Policy experts said the dire situation could 'force' local authorities to 'relinquish' their maintained schools

21 Oct 2022, 5:00


As many as half of all the maintained schools in some areas are expected to go into financial deficit this year, putting councils in an “utterly untenable and unsustainable” position and “jeopardising” education.

Policy experts said the dire situation could “force” local authorities to “relinquish” their maintained schools to balance the books, with the government keen for new powers to allow academy conversions en-masse.

Brighton and Hove, the local authority with the fewest academies in the country, expects at least 30 of its 62 maintained and faith schools to end the current financial year in deficit.

Only 14 of its schools were in deficit in April.

The trend is similar in other councils with high numbers of maintained schools.

A spokesperson for Lewisham council said 14 of its schools are in deficit and another 14 with small reserves are expected to – 40 per cent of its schools. “This figure will significantly rise over the next two years unless the Government reviews schools funding in order to maintain and safeguard the education of Lewisham’s children and young people,” they added.

Nearly one in four (22 per cent) of the 56 maintained schools in Wakefield are also projecting a deficit at the end of the financial year, up from 2 per cent last year, when just one was in arrears.

Meanwhile, over a quarter (28 per cent) of the 107 local authority schools in East Sussex are expecting to end the year in the red. Previously less then one per cent of schools were in deficit.

‘Many schools’ fear for financial sustainability

The Local Government Association told Schools Week that “many schools” were concerned about their financial stability as rising costs of fuel, energy and school meals ate into budgets, alongside the need to fund the teacher pay rise. 

“This comes as the financial sustainability of councils and local services is already at a cliff-edge, with the dramatic increase in inflation undermining councils’ budgets,” a spokesperson said.

Alongside national living wage and higher energy costs, this had added “at least £2.4 billion in extra costs on to the budgets councils set in March this year,” they added.

We simply do not have any spare cash to bail out schools

“This is why we are calling on the Government to come up with a long-term plan to manage this crisis as part of our campaign to save local services.”

A spokesperson for Brighton said its schools could be forced to cut staff. The situation was “utterly untenable and unsustainable”, he said.

“We believe this could seriously jeopardise the quality and provision of education to children and young people in the city.”

Like many other councils, Brighton was facing “very severe financial pressures”.

“We simply do not have any spare cash to bail out schools that are suffering financial hardship,” the spokesperson said.

Almost 1 in 10 maintained schools in deficit

Latest figures from the Department for Education show 8.4 per cent of local authority-maintained schools nationally were in deficit last year.

Academies were much better off, with only 2.6 per cent of trusts reporting they were in deficit in 2021.

academy deficit schools
Tom Richmond

Lincolnshire said just over 10 per cent of its schools have set a deficit budget or believe they will have one by April. Thirteen of Wiltshire’s 123 schools (11 per cent) are in deficit, at a cumulative cost of £2.6 million. Both expect numbers to rise, too.

The schools bill proposed giving local councils the option to convert some or all of their remaining schools into academies at the same time.

Tom Richmond, the director of the EDSK thinktank, said councils “may be forced to consider relinquishing schools to balance the books”.

Councils are also dealing with huge funding black holes in their high-needs budgets. Estimates from earlier this year put the combined deficits at £2.4 billion.

The government has pledged £780 million to bailout some councils in return for cost-cutting pledges under its “safety valve” programme.

Don’t ‘prop up’ academies drive with cash problems

Richmond in west London said it would be “very disappointing for the drive towards full academisation to be propped up by schools falling into financial difficulty, rather than conversion being seen as a positive choice”.

Heather Sandy, who chairs an educational achievement policy group for the Association of Directors of Children’s Services, was sceptical about academisation.

“Trusts also face financial pressures and schools that want to join academy trusts, but aren’t able to fund their provision, would present a real challenge.”

She said schools faced “very hard decisions – and all of those impact on children, whether that’s staffing decisions, curriculum or sometimes, unfortunately, decisions … around extra support within schools to protect the most vulnerable pupils.”

She suggested maintained schools could find efficiencies by working with others.

Jeremy Hunt, the chancellor, has signalled public spending cuts are on the way as the government grapples with plugging its own deficit.

Nick Brook, the deputy general secretary of school leaders’ union NAHT, said: “Schools are in the grip of a major funding crisis. Without further investment, education – like many other public services – will be harmed, and ultimately it will be pupils that suffer.”

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