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Serious financial issues in schools

14 December 2016

Today's National Audit Office report confirms that there are serious financial issues in schools. This is a risk to the entire education system because decisions taken by schools to bring budgets back into balance may affect student achievement. Colleges are already concerned that they have to pick up the pieces in terms of English and maths because two-thirds of the 16-year-olds they recruit need to do resits to achieve grade C standard. Secondary school spending cuts may result in fewer young people achieving success by 16, but there is an equally worrying risk, that the Department for Education (DfE) robs Peter to pay Paul. History shows that DfE may be tempted to raid post-16 budgets to tackle problems relating to overspending in schools. The impact of this would be to increase the drop in funding for 16 to 19-year-olds compared with 11 to 16-year-olds, which currently stands at about 22% reduction. We stand by our call for Government to increase overall education spending from 4.5% of GDP to 5% and will be asking for this to be addressed in the spring budget. There are alternatives other than simply putting more money into education, of course. One obvious area to look at is the drain on school budgets caused by small class sizes in their sixth forms. Research in 2015 calculated that secondary schools are subsidising their sixth forms at a rate of £1,000 a pupil. This represents a cost of more than £400 million to the 11-16 budget. Despite this, DfE has encouraged secondary schools to open sixth forms and approved 300 new ones in the last 10 years without ever having carried out any research on the impact this has on quality, breadth of offer and viability of schools and colleges. That research is now long overdue. We know that there are now more than 1,000 sixth forms with fewer than 200 pupils and this is emerging as a major financial and educational issue for the system. Today’s National Audit Office report states that 60% of secondary academies made a deficit in the 2014-15 financial year. Turning this around will need more than the recommendations they suggest. A DfE-led review of the sustainability of sixth forms should now be a priority. David Hughes is the Chief Executive of the Association of Colleges