School revenue balances in England

Date: 13.01.2019

This study looks at school balances and deficits. Three main findings are:

  • Almost one in three (30.3 per cent) of local authority (LA) maintained secondary schools were in deficit in 2017-18 – almost four times that of 2014 (8.1 per cent).
  • The proportion of academies spending more than their income is less than for LA maintained schools. (Using data for the 2016-17 academic year to allow for comparison).
  • Overall, the value of surplus balances far exceeds that of deficit balances. In 2017-18, deficit balances totalled £233m, while the total value of surplus balances was £1.794bn, of which over half a billion (£580m) met the DfE’s “excessive balance” threshold.  

 

Policy recommendations

1. With increasing financial pressures on schools – particularly in secondaries – the government should consider before the Spending Review whether higher per pupil funding is needed, or whether efficiency savings can make up part of the current shortfalls. It should especially focus on the strains faced by many secondary schools, and assess whether changes in pupil numbers are likely to ease financial pressures, or whether these will prove more enduring.

2. Further consideration should be given to what extra help or advice can be offered to those schools facing large deficits.

3. The government should determine the reasons for the lower level of in-year deficits in academy trusts, and whether there are any lessons to learn from this.

4. The government should also look closely at the level of “excessive”, unallocated, surpluses and consider if existing rules allow for these resources to be used effectively.

 

EPI report