Struggling to balance the books

An increasing number of schools in Northumberland are unable to balance their books, according to the latest data from the Department for Education.

Thursday, 25th January 2018, 8:00 am
The going gets tough in Northumberland schools.

Of 155 schools maintained by the local authority in Northumberland, 34 ran a deficit budget in the 2016-2017 financial year.

That’s 22 per cent of all state schools, excluding academies and free schools, who do not have to report their finances in the same way.

A school may run a deficit if it spends more than usual on large projects such as building works.

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However, the National Audit Office, a body which scrutinises public spending, said in a report in 2016 that the increasing number of secondary schools in deficit across the country was a sign that they may be struggling financially.

If a school is unable to balance its books it must notify the local authority, which will generally offer a short-term loan.

Headteachers will often have to cut back on staff and equipment to get back in the black.

In Northumberland, the number of schools in deficit has increased in the last three years.

The figures show nine more schools ran at a loss in the last financial year compared to the same period in 2014-2015.

The number of schools in deficit has also been increasing nationally.

The most recent data shows nine per cent of all local authority maintained schools ran at a deficit, a figure which has almost doubled from five per cent in 2014-2015.

Schools are funded mainly through a grant from the Department for Education, which allocates funds to each local authority based on demographic factors such as pupil numbers, deprivation and additional language needs.

The local authority then decides how to divide the money between individual schools.

Northumberland received £4,874 per pupil in the last financial year – up from £4,301 in 2014-2015.

But schools in England are facing a real-terms cut of 6.5 per cent between the current financial year and 2020, once inflation and rising pupil numbers are taken into account, according to the Institute for Fiscal Studies.

The thinktank calculated this was the largest cut in school spending per pupil over a four-year period since the early 1980s.

Covering pension and national insurance contributions was the biggest struggle for schools, according to a 2017 survey by the National Association of Head Teachers.

‘The increase in costs of over 5.5 per cent every year with no resulting increase in school funding has been disastrous’, the report found.

The NAHT also reported that almost three-quarters of headteachers believed their school budgets would be ‘untenable’ by 2020.

Coun Wayne Daley, cabinet member for children’s services at Northumberland County Council, said: “The council is committed to working closely with all schools to meet the challenges posed by a testing financial environment.

“There has been an estimated overall 2.4 per cent increase in funding for schools in 2018/19, total funds are in excess of £178million.

“Northumberland is proposing to use its local discretion in the coming financial year to ensure that all our schools receive funding levels per pupil in excess of the minimum funding amounts per pupil advised by the Department for Education (£3,300 for primary schools, and £4,600 for secondary schools, in 2018/19).”