Third of schools unable to cover their costs

New research has revealed that nearly a third of local authority secondary schools in England are unable to cover their costs, with the number of schools with budgets in the red having almost quadrupled in four years.

The Education Policy Institute, who conducted the research, said that the average local authority secondary school debt is £483,000, highlighting a ‘marked deterioration’, despite the Department for Education maintaining that more than 90 per cent of state schools are in surplus.

The findings show that 30.3 per cent of local authority maintained secondary schools were in deficit last year, almost four times that of 2014. Additionally, one in every 10 local authority secondary school has a deficit of over 10 per cent of their total income, while the proportion of special schools in deficit has nearly doubled since 2014, with an average deficit of nearly £225,298.

The proportion of academies spending more than their income is less than for local authority maintained schools, while 38 per cent of primary academies were found to be spending more than their income last year, compared to 51 per cent of local authority primary schools in 2016-17. Similarly, for secondaries, the figures were half for academies (50 per cent) and just under two-thirds (64 per cent) for local authority schools. The Education Policy Institute also warns that the propensity to have an in-year deficit is lower in academies in multi-academy trusts than for local authority schools.

Looking at schools with excess surpluses, the think tank says that, in theory, nearly four-fifths of local authority school deficits could be eliminated if local authorities were able to redistribute reserves from excessive balances within the authority into deficit balances.