Potential £320m for councils in academy push

The potential cost to council taxpayers of converting all schools to academies is £320 million, with an additional loss of £80 million every year in business rates income.

The Local Government Association (LGA) surveyed its members during the summer to find out the potential cost of the government's proposed plans, unveiling significant one-off and ongoing costs to council taxpayers.

Based on data from councils, the LGA estimates that a ‘sponsored’ method, such as Multi-Academy Trusts, could leave councils with up to a £320 million bill. If schools were to use the ‘converter’ method, in which they operate as a stand-alone organisation, the cost to councils could be £120 million.

Where a school converts by the sponsored method, any debt built up by that school generally remains with the council, whereas with the converter method, this is not always the case. Both one-off figures will also be in addition to an annual loss of £80 million in business rates for councils since academies receive an 80 per cent business rates relief.

Councillor Richard Watts, chair of the LGA's Children and Young People Board, said: "If all schools are encouraged to become academies at some point, this will have significant financial implications for councils.

"The government has offered academy chains £600 million to help them convert more maintained schools. But councils have seen that same amount cut from the Education Services Grant.

"The money that councils are predicted to lose could be better spent on recruiting, training and keeping excellent teachers, and making sure children are safe and have the equipment and support they need, in buildings that are fit for purpose.

"Councils should be seen as education improvement partners. We want to work with government to ensure every child gets the very best from their years at school."