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Exclusive: Depth of school funding crisis revealed

Exclusive: Depth of school funding crisis revealed

Dozens of councils told the DfE that balancing their schools budgets was impossible within three years

25th October 2019, 5:03am

The depth of the school funding crisis has been laid bare in documents seen by Tes detailing the gaping holes in education budgets across the country.

The freedom of information responses reveal the substantial deficits in many councils’ schools budgets and suggest that dozens of areas will stay in the red for years to come.

The news comes amid dire warnings over the state of school funding, with unions claiming that four out of five schools will receive less money per pupil in 2020 than in 2015.

Now it has emerged that the vast majority of the 32 councils that were told to submit a financial recovery plan to the Department for Education responded by saying that their education budgets would still be in deficit after three years.

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Julia Harnden, funding specialist at the Association of School and College Leaders, said: “It is another sign of the immense pressure on education funding that several local authorities are unable to clear their deficits.

“We hope the Department for Education will take a sensible approach over local authority deficits given this extremely challenging context and will not expect any kind of unfeasible cost-reduction plan. We also hope that whoever is in government over the next few years ensures that the education sector is funded sufficiently.”

The 32 local authorities were told to submit the recovery plans after ending 2018-19 with a cumulative deficit of 1 per cent or more in their main schools’ budget, known as the dedicated schools grant.

The plans were supposed to show how they would eliminate the deficits within three years. But 29 out of the 32 told the DfE that this was impossible.

Spiralling cost of supporting children with SEND

All the plans, sent to Tes as freedom of information responses, highlighted the spiralling costs of supporting children with special educational needs and disabilities (SEND).

They also set out councils’ plans for balancing budgets in future, including spending less on some services as well as asking schools to contribute more to costs.

Since the plans were drawn up, the DfE has announced an extra £7 billion for schools over the next three years, including £780 million for SEND in 2020-21. This means the financial position of the 29 councils might have changed, according to the DfE.

However, the department has admitted in its own consultation paper that the new money is not enough to clear all the deficits.

It says that despite the additional funding “a number of authorities will already have substantial deficits at the end of 2019-20 and will not be able to recover them immediately”.

Jules White, head of the Worth Less? school funding campaign, said: “While the government’s recent funding announcement is a step in the right direction, the independent Institute for Fiscal Studies have confirmed that the very best it will do will see per pupil funding restored to levels of over a decade ago when we get to 2023.

“It is unsurprising, therefore, that schools and local authorities are still reporting significant financial shortfalls.

“The government and DfE must not sit on their laurels and it will be crucial that further real terms investment is put in place to ensure that schools are sufficiently funded both in the short and longer terms.

“There is still considerable unease among heads that our budgets will be severely stretched again without further meaningful investment.”

Extra funding fears

Education funding specialist Julie Cordiner agreed the extra cash would fall short of what is needed. She said: “The £780 million is very welcome but it’s not going to be enough.” She also highlighted the fact that there is no commitment to continue the SEND funding boost beyond 2021.

There are fears that the money will not be targeted at the areas that most need more funding.

This is because around half of the “high needs” budget for children with complex SEND is currently given to councils based on their planned spending from 2017-18, frozen in cash terms. But in some areas, costs have increased dramatically in the intervening years.

“That’s a huge problem,” said Ms Cordiner. “There’s no guarantee that the extra money will go to the right places. There will be some lucky local authorities that get their deficits wiped out, but some won’t get anywhere near.”

Adding to the pressures, proposals published two weeks ago would prevent councils from using their general funds to plug gaps in school funding, which unions say could increase the budget pressures.

Ms Cordiner said the move demonstrated how holes in education budgets have become so large that the amount of money being moved from councils’ general funding pots has become unsustainable.

“The size of the deficits [in education] is now so massive that they [the government] are worried that they will be hammered by people saying, ‘There’s no money for people in social care,’” she said. “They’re worried about the impact on other services.”

Councils have also warned that the extra money may not be enough to solve the funding problems.

In Stoke-on-Trent, which had a deficit of £14 million (-6.53 per cent), the council said it was still working through its recovery plan.

A spokesperson for the council said:“We don’t know the level of funding we will be receiving at this stage so we are unable to say whether this will be enough and we are still working through the deficit recovery plan.

“The pressure is related to changes to national policy, such as increasing the upper age limit to 25 and the introduction of education, health and care plans resulting in a rise in the demand for these services.”

A Department for Education spokesperson said: “This government has announced the biggest funding boost for schools in a decade which will give every school more money for every child.

“This means that every school in the country can see per pupil funding rise in line with inflation next year. To suggest otherwise is simply misleading.

“All secondary schools will receive a minimum of £5,000 per pupil next year, while all primary schools will get a minimum of £4,000 from 2021-22 - with the biggest increases going to the schools that need it most.

“We’re investing a total of £14 billion more in schools over the next three years to give schools, teachers and parents the certainty to plan, improve standards and ensure all children get the top quality education they deserve.”