Local authority schools to be more transparent

The Department for Education has invited views from across the education system on applying some of the financial measures used in academies to local authority run schools.

Academy trusts have requirements to publish their annual accounts, declare or seek approval for related party transactions and report on high pay for executive staff. The new consultation sets out proposals for these arrangements to be adopted by local authority maintained schools to help strengthen their transparency and financial health - a move that council leaders have said is unnecessary.

Data suggests that a larger percentage of maintained schools had an accumulated deficit compared to academy trusts, and the rise in 2017-18 continued to be higher in maintained schools. The argument is that the greater transparency of finances in academies enables the government to identify problems more quickly and intervene where necessary.

Academies Minister Lord Agnew said: “In everything we have done to strengthen the way schools are run since 2010, we can be certain that an unprecedented level of accountability and transparency has been brought into academy finances, with these robust processes allowing us to spot financial mismanagement quickly and intervene where we need to.

“We know that many local authorities do a good job in overseeing the financial affairs of their schools, but the accountability arrangements typically in place in their schools are not equal to that of academies.

“It makes sense for both parents, and the entire education sector, that the financial reporting and accountability measures of academies are extended to local authority maintained schools, ensuring consistency across our entire state funded education system. That is why we are consulting on this, to bring parity between the financial transparency measures of local authority run schools and academies.”

Anntoinette Bramble, Chair of the Local Government Association’s Children and Young People Board, said: “It is wrong to suggest that academies have more transparency and accountability than council maintained schools. A key goal of the academy programme was that schools would be subject to less oversight and control, and the Department for Education cannot have effective oversight of spending in more than 7,000 academies. What we need is greater transparency in how academies are managing their finances and urgent action taken to balance the books where necessary.

“Councils, which have vast experience running – and balancing - large complex budgets, are best placed to oversee the performance and finances of all schools in their area. This would ensure democratic accountability, and give parents the certainty and confidence in knowing that their child’s school is able to deliver the best possible education and support, without risk of financial failure."