Hundreds of schools sitting on £30m in bank accounts

John Roberts Education Correspondent

HUNDREDS of Yorkshire schools have breached Government rules by allowing more than 30m of taxpayers’ money to sit idle in their accounts, while around one in five of the region’s secondary schools have run up debts of 10m.

New figures show almost 500m of public funding which should have been spent on children’s education was left untouched in schools’ bank accounts across the country last year.

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Secondary schools are not allowed to have a surplus higher than five per cent of their budget, while primary and special schools are restricted to eight per cent.

But almost a quarter of the region’s schools – 543 in total – have broken these restrictions by hoarding 30m of cash beyond the allowed limits.

Now, the Government has warned headteachers and council leaders they could face a crackdown to ensure public money is spent on educating children.

Schools Minister Vernon Coaker said: “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.

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“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.”

Local councils already have the power to claw back money deemed to be excessive.

The figures, published yesterday by the Department for Children, Schools and Families, show the overall surplus sat in Yorkshire school bank accounts was 167m, though 114m of that is committed to spending projects.

The surplus was revealed as fears were raised over the number of schools building up deficits in Yorkshire. Just under one in five secondary schools in the region have run up losses of 10m, while the overall deficit across all schools in Yorkshire was 14.1m last year.

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North Lincolnshire has the highest level of deficit. Almost half of its secondary schools ended the year in the red, with an overall debt of more than 1m.

More than half of this figure was down to Lindsey School and Community Arts College, in Cleethorpes, which finished 2008/09 with a deficit of 720,478.

South Leeds High School, which closed this summer to make way for a new academy, ended the year with a loss of 1.2m, which had to be met by Leeds Council’s education budget.

Chris Edwards, chief executive of Education Leeds, said: “It is the responsibility of local authorities to ensure that any school being considered for academy status is debt-free. We work closely with all concerned to reduce the school’s deficit so the financial impact on the authority is as small as possible.”

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A Department for Children, Schools and Families spokeswoman said: “A maintained school deficit or surplus remains with the local authority when the school closes or when it converts to an academy. We ask all local authorities to work with schools to prevent any deficits and surpluses becoming significant but we don’t think it’s reasonable to expect a new school to start its life with an inherited deficit."

Mick Brookes, general secretary of the National Association of Head Teachers, warned more schools could fall into deficit once expected cuts in public spending hit school budgets.

He said: “We tell members it is important to have a clear picture of what any surplus money is for and not to have money just slushing around from year to year. It is important the public has a clear picture because the majority of school surpluses will be planned for projects such as replacing IT equipment.

“It will be tough for heads managing school budgets from now on. Schools have benefited from above inflation rises which has allowed us to employ more teachers, teaching assistants and improve the built environment. However, school surpluses could be wiped out depending on the size of any school funding cuts and then we could see more schools ending in deficit or looking at their own personnel.”

Nick Seaton, chairman of the York-based Campaign for Real Education, called on local councils to do more to stop “profligate” schools from running up debts.

Comment: Page 12.

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