Best Bear news release
Schools Minister welcomes fall in surplus school balances but says still more to do
07 January 2010
Schools Minister Vernon Coaker welcomed figures released today that show school surplus balances have fallen for the first time since 2002-03.
However, he raised concerns that balances are still too high, urging schools and local authorities to ensure excessive balances are used to improve standards for all pupils.
Schools Minister Vernon Coaker said:
“It’s good to see that the majority of schools are managing their budgets well and also that the number of schools with excess surplus balances has fallen to its lowest level in these ten years to just over 7,000 schools.
“However, overall the level of surplus held by some individual schools is too high. While it is clearly sound financial management for schools to retain a small surplus from year to year, we expect revenue funding to be used to support the education and well-being of pupils in school now. It is however important that schools spend their funds wisely while ensuring best value for money.
“Local authorities have the power to claw back excess, uncommitted surpluses and redistribute the proceeds back to local schools in consultation with Schools Forums. To help, schools now have three year budgets to enable them to plan ahead on a much more certain and predictable basis, leading to improved financial management and better outcomes for pupils.
“Last year we made it clear that we expect schools and local authorities to work to reduce the level of balances by the end of 2010-11. If we do not see a substantial reduction of total revenue balances and in particular the excessive balances held by individual schools, the Government will consider further action from 2011-12 to bring the total down to ensure the funding is being spent on improving outcomes for children and young people.
“Although the number of schools with deficit balances has risen slightly by 153 to 1,848 schools on the previous financial year, it remains below the number of schools in deficit a decade ago. In addition, around 50% of these deficit balances were under £25,000. We’ve made it clear that where a school is in deficit, it must agree a recovery plan with the local authority to eliminate the deficit, normally over three years.”
The figures released show:
• Surplus balances in 2008-09 are down by around £118 million to £1.92 billion on the previous financial year.
• Excess surplus balances above the cut off point have fallen by £97 million to £495 million, and a record low number of schools (a little over 7,000) have an excessive surplus.
• As expected given the current financial climate, the number of schools with deficit balances has risen slightly by 153 to 1,848 schools on the previous financial year. However, it remains below the number of schools in deficit a decade ago.
• Around 50% of the deficit balances in 2008-09 were under £25,000.
Each individual school is responsible for their own financial management. They can often go into deficit or have a surplus due to individual circumstances like an increase or fall in pupil numbers – or similarly in staffing numbers.
It is important however that schools ensure that they spend wisely and in ways that give best value for money and secure efficiencies. There is a range of support available which schools should use to help them make the right financial and investment decisions, including:
• a free programme of financial consultancy support for every maintained school in England – giving schools tailored advice on planning and managing their workforce and management; strategic management; how schools can link with their neighbours; and more effective procurement;
• proactively using the Department’s financial benchmarking service – which allows schools to compare their patterns of expenditure against schools operating in similar circumstances – with 10,000 schools already signed up;
• tapping into the Department’s procurement advice and signing up to the online procurement trading system OPEN – already 54 local authorities are signed up and 10,400 schools expected to be using it within a year;
• signing up to the Schools Recruitment Service, launched in October 2009 – an online system that helps to save schools time and money when recruiting permanent leadership, teaching and support staff;
• using a new website, which signposts all the national resources available for schools – with clear case studies and to share expertise across the sector.
In addition in November 2009, the Secretary of State, Ed Balls published a discussion document, Securing Our Future – Using Our Resources Well, setting out how finances in the schools sector could be run more efficiently. |