As part of a drive to make financial reporting across all types
of schools more consistent, the Department for Education has
today (Wednesday 17 July) invited views from across the education
system on applying some of the financial measures used in
academies to local authority run schools.
Academy trusts already have strong financial reporting measures
in place, including requirements to publish their annual
accounts, declare or seek approval for related party transactions
and report on high pay for executive staff.
Today’s consultation sets out proposals for these arrangements to
be adopted by local authority maintained schools to help
strengthen their transparency and financial health, bringing them
in-line with the requirements and high standards that academy
trusts already have to meet.
Academies Minister said:
In everything we have done to strengthen the way schools are
run since 2010, we can be certain that an unprecedented level
of accountability and transparency has been brought into
academy finances, with these robust processes allowing us to
spot financial mismanagement quickly and intervene where we
need to.
We know that many local authorities do a good job in overseeing
the financial affairs of their schools, but the accountability
arrangements typically in place in their schools are not equal
to that of academies.
It makes sense for both parents, and the entire education
sector, that the financial reporting and accountability
measures of academies are extended to local authority
maintained schools, ensuring consistency across our entire
state funded education system.
That is why we are consulting on this, to bring parity between
the financial transparency measures of local authority run
schools and academies.
Today’s consultation doubles up the efforts of to clamp down on financial
mismanagement in all types of schools across the country and to
ensure that local authority schools are reporting on their
financial affairs in the same way that academies are already
required to do.
The proposed changes follow data collected in from 2016 to 2018,
which showed that across England, a larger percentage of
maintained schools had an accumulated deficit compared to academy
trusts, and the rise in 2017-18 continued to be higher in
maintained schools.
The greater transparency of finances in academies enables us to
identify problems more quickly and intervene where we need to,
and so the current measures used in academies presents a strong
case for considering adapting and implementing the same controls
across the maintained schools sector.
This will help strengthen arrangements for maintained schools and
reduce the future likelihood of growing deficits or misuse of
funds in those schools.
As part of the consultation, the department will also consider
how any new arrangements may create additional burdens, and so
the benefits of any new changes introduced for transparency
measures will need to outweigh any burdens on local authorities
and schools.
Today also builds on the new Setting Executive Pay guidance,
published by the Department last week, which provides clear
guidance and advice to academy trust boards on what they should
be considering when deciding senior staff salaries.
