Nothing left in the tank? Funding Gap Bites


16 November, 2016

It will come as no surprise to most that funding shortages in Schools across the UK have been a cause for concern for a number of years with consistent headlines shouting of cuts, redundancies, deficits and strikes. But now, with the Government revealing that almost 1,000 local authority schools and more than 100 academy trusts in England are in debt it is clear that the problems are deepening.

Education Minister Nick Gibb has indicated that in 2014-15 there were 113 academy trusts with a revenue deficit, representing 4% of trusts, and there were 944 local authority schools in deficit, representing 5.3% of such schools. An NAHT survey last year found that half of head teachers have reduced the hours of teaching assistants, while nearly two-thirds are reducing investment in equipment and it is clear head teachers across the country are struggling to make ends meet.

So how have we reached this point? Research from the Institute of Fiscal Studies shows that while the current government has protected day-to-day spending per pupil in cash terms for the current parliament, rising costs and an increase in pupil numbers have squeezed resources. In short, budgets have failed to keep up with rising costs.

There is a proposed new national funding formula, due to be implemented in 2018, which will allocate funds according to a number of factors categorised under four broad headings, (basic per-pupil funding, additional needs, school costs, and geographic costs). There is however concern surrounding bringing in a new formula at the time of a national funding crisis.

In the midst of such a dire state of affairs and a pervasive atmosphere of uncertainty it is clear that effective forward financial planning and business strategy are imperative to ease the burden and pressure that education establishments are now faced with.

A word from Martin Owen, Forbes' Financial Support Officer:

Schools and academies need to show that they are planning for the future and that resources are being allocated where they are most needed to improve the education of their children. With all the uncertainty of future funding, Governors and Trustees should have an independent review of their financial plans to give them assurances of robust planning. At Forbes, we can provide this through Financial Health Checks, a service working with schools to help them develop financial plans and robust internal procedures. Financial Health Checks are recommended by DfE to give assurances to Governors and Trustees that effective Financial Planning is in place. With this service, schools and academies can review how their limited resources are being used effectively and ensure that future plans continue to deliver where needed.

If you are looking for any more information with regards to our services view our Education section. You can also contact solicitor Ruth Rule-Mullen in our Education department via email or phone on 01772 220195. Alternatively send any question through to Forbes Solicitors via our online Contact Form.


Make an enquiry