Heads' warn against surplus cash being 'raided'

By Angela Harrison
BBC News education correspondent

Image caption,
Heads are worried their "prudent" savings will be taken back

Head teachers in England are warning the government not to try to raid surplus cash held by schools.

Some schools have been accused of "hoarding" cash in their budgets .

The government says almost half a billion pounds is in what it calls "excessive balances" held by individual schools.

The National Association of Head Teachers fear budget pressures will make such funds seem like a "quick win" for the government.

The head teachers' union, gathering for an annual conference in Liverpool, says the vast majority of schools do not have excessive balances and that the "assumption that schools are sitting on vast wealth is largely fictitious".

'Claw back'

Schools are allowed to keep a small surplus in their budgets from year to year but if that is considered to be "excessive" and is not said to be committed to a specific project, local authorities have the power to claw money back.

That money can then be re-distributed among other local schools.

In January, the government said although the vast majority of schools managed their budgets well, the level of surplus held by some individual schools was too high.

About 7,000 schools, it said, had excessive balances, adding up to £495m, although both numbers had fallen.

The NAHT, which represents about 28,000 school leaders, says its research shows the real number of schools with uncommitted balances above the threshold allowed is much lower - at 1,574 schools.

That would be equal to 7.5% of England's schools.

The union also says there is confusion about what constitutes an "excessive balance" and wide differences between local authorities in terms of how they define when funds are committed and operate "claw-back".


The NAHT, in a statement released for its annual conference in Liverpool, said: "The expected very tight funding rounds in the next few years argues for prudent balances, but pruning these prudent balances may be seen as a quick-win for a government seeking to achieve even tighter funding."

It added: "The NAHT suspects that this activity is part of a softening-up process and could well be used to accuse schools unjustly of hoarding cash when that is clearly not the case in an overwhelming number of schools."

The union's general secretary Mick Brookes said: "We have uncovered the fact that there is a large element of guesswork involved in the understanding of schools finance.

"We have urged the DCSF [Department for Children, Schools and Families] to clarify systems and processes in local authorities so that they can have a clear view of schools funding for many years."

In announcing the totals kept in surplus by schools in England in January, schools minister Vernon Coaker said he was pleased that the number of schools with excess surplus balances had fallen "to its lowest level in 10 years" to just more than 7,000 schools.

But he said that schools and local authorities had already been warned they should further 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," he said.

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