Schools are struggling to plug the massive budget deficits created by Tory Government, says Angela Rayner

“Schools are struggling to plug the massive budget deficits created by a Tory Government incapable of running a schools system.

“On Monday we heard from headteachers who are increasingly faced with difficult choices of whether they can afford to have classrooms cleaned, sport pitches mowed or to keep hold of vital support staff who are essential to school communities.   

“With three quarters of school budgets taken up by staffing costs, the fear across the sector is that classroom teachers could be cut next.

“At the election the Tories offered warm words to parents about better schools and promised to protect school funding. It is clear that their legacy will now be one of cutting school budgets, super-sized class sizes, and no progress made in the international league tables.

“Our children deserve better.”

Notes to editors:

The motion states:

“That this House regrets the impact that school funding cuts are having on the ability of children to reach their full potential, and calls on the Government to ensure that all schools have the funding they need to provide an excellent education for every child."

The schools budget, although protected in real-terms, does not provide for funding per-pupil to increase in line with inflation. There will be a real-terms reduction in per pupil funding:

“In the 2015 Spending Review, the government increased the schools budget by 7.7% from £39.6 billion in 2015-16 to £42.6 billion in 2019-20. This is a real-terms increase that protects the overall budget from forecast inflation. The Department estimates that the number of pupils will rise over the same period: a 3.9% (174,000) increase in primary school pupils and a 10.3% (284,000) increase in secondary school pupils. Therefore, funding per pupil will, on average, rise only from £5,447 in 2015-16 to £5,519 in 2019-20, a real-terms reduction once inflation is taken into account.”

Financial Sustainability of Schools, NAO, 14^th December 2016, https://www.nao.org.uk/wp-content/uploads/2016/12/Financial-sustainability-of-schools.pdf

In their 2015 manifesto, the Tories promised to protect per-pupil spending:

“Under a future Conservative Government, the amount of money following your child into school will be protected.”

Conservative Party 2015 General Election manifesto, p.34, https://s3-eu-west-1.amazonaws.com/manifesto2015/ConservativeManifesto2015.pdf

According to the NAO, schools will need to make £3billion in efficiency savings by the end of the Parliament:

“The Department is seeking to deliver educational excellence everywhere, and to growing numbers of pupils, against a budget that provides little more than flat cash funding per pupil over the five years to 2019-20. This means that mainstream schools need to find significant savings, amounting to £3.0 billion by 2019-20, to counteract cost pressures.”

Financial Sustainability of Schools, NAO, 14^th December 2016, https://www.nao.org.uk/wp-content/uploads/2016/12/Financial-sustainability-of-schools.pdf

This is the largest fall in schools spending seen since the mid-1990s:

“Schools have not experienced this level of reduction in spending power since the mid-1990s. The Department estimates that schools face cumulative cost pressures of 3.4% in 2016-17, rising to 8.7% by 2019-20 Alongside non-pay-related inflation, pay-related costs will increase through pay rises, the introduction of the national living wage, and higher employer contributions to national insurance and the teachers’ pension scheme. Some schools and academy trusts will also have to pay the apprenticeship levy from April 2017.”

Financial Sustainability of Schools, NAO, 14^th December 2016, https://www.nao.org.uk/wp-content/uploads/2016/12/Financial-sustainability-of-schools.pdf

The Tories have also cut the Educational Services Grant, which helps local authorities provide school improvement and other services to schools. This will create a £600million blackhole in LA finances while they are still expected to provide these services:

The government announced in the November 2015 spending review that £600m of savings would be made from the education services grant.

TES, 29^th December 2016, https://www.tes.com/news/school-news/breaking-news/school-improvement-risk-due-education-spending-cuts-warn-councils

On Monday (23^rd), the Public Accounts Committee heard from headteachers who have been forced to make efficiency savings due to large budget deficits caused by the unprecedented cost pressures placed on schools by the Department for Education. They highlighted:

“I’ve cut my teaching to the barebones, every teacher is teaching at full capacity, I’ve got very little spare capacity in terms of spare lessons on the time table, so I’m now starting to hit the support staff and my worry about that is that it’s going to affect the most vulnerable students. I’ve got a part-time family councillor – he’s going to go. I’ve had to cut EWO [Education Welfare Officer] time, I’ve had to lose LSAs [Learning Support Assistants] or TAs [teaching assistants]. I’ve had to lose a first aid officer in school.”

Stuart McLaughlin, Headteacher of Bower Park Academy, Havering, ‘Financial Sustainability of Schools’, Public Accounts Committee, 23^rd January 2017, http://www.parliamentlive.tv/Event/Index/d2513377-8498-40f5-948f-4cd6d4a8e997

“We’ve reduced the curriculum offer, cut out the whole of the community team. We’ve reduced staffing, reduced the leadership team... We’ve got absolutely no flexibility in terms of our staffing structure to allow any collaborative work or research and development work. Literally, I just have enough teachers to put in front of classes and they are all working the maximum number of hours they can.”

Kate Davies, Headteacher of Darton College, Barnsley, ‘Financial Sustainability of Schools’, Public Accounts Committee, 23^rd January 2017, http://www.parliamentlive.tv/Event/Index/d2513377-8498-40f5-948f-4cd6d4a8e997

“…We go through the local authority to make sure all our contracts are as efficient as they possibly can be so we use economies of scale to buy our insurances and our utility costs. We check every single contract; we now have our grass cut less times a year simply because we can’t afford to keep those kind of contracts going at the same rate. We clean the school less, because again you can’t keep those contracts going… All of my staff teach up to their full capacity, and it’s very difficult to see where else I can possibly make changes now that aren’t going to have significant impact on the outcomes of students. We’ve already pretty much removed the whole pastoral layer, and this is at a time where the mental health of young people is such an important factor, but we just can’t do it in schools anymore.”

Liam Collins, Headteacher of Uplands Community College, East Sussex, ‘Financial Sustainability of Schools’, Public Accounts Committee, 23^rd January 2017, http://www.parliamentlive.tv/Event/Index/d2513377-8498-40f5-948f-4cd6d4a8e997

“With three quarters of the budget of a school tied up in staffing costs, the scope for savings outside of that in say better procurement or just cutting other budgets is going to be extremely limited indeed so it doesn’t take long before headteachers are turning to their staffing which is obviously the thing which has the most powerful impact on standards within the school and is the most painful and long term thing to change as well.”

Russell Hobby, National Association of Headteachers, ‘Financial Sustainability of Schools’, Public Accounts Committee, 23^rd January 2017, http://www.parliamentlive.tv/Event/Index/d2513377-8498-40f5-948f-4cd6d4a8e997 

The Tories have shown themselves incapable of managing education finances. The DfE has been served with an ‘adverse’ opinion, the worst opinion the NAO can give, on two of their most recent annual reports.  

“Amyas Morse, the Comptroller and Auditor General (C&AG), has provided an adverse opinion on the truth and fairness of the Department for Education’s group financial statements. An adverse opinion indicates that he considers the level of error and uncertainty in the statements to be both material and pervasive.”

NAO, 20^th December 2016, https://www.nao.org.uk/press-release/comptroller-and-auditor-generals-report-on-the-department-for-educations-financial-statements-2014-15/

“Providing Parliament with a clear view of academy trusts’ spending is a vital part of the Department for Education’s work – yet it is failing to do this. As a result, I have today provided an adverse opinion on the truth and fairness of its financial statements. The Department will have to work hard in the coming months, if it is to present Parliament with a better picture of academy trusts’ spending through the planned new Sector Account in 2017.”

NAO, 20^th April 2016,

https://www.nao.org.uk/report/comptroller-and-auditor-generals-report-on-the-department-for-educations-financial-statements-2014-15/

Hundreds of schools and academies currently have budget deficits:

“In the 2014/15 academic year, 113 academy trusts reported a cumulative revenue deficit in the August Accounts Return. This represents 4% of trusts submitting a return. At the end of the 2014-15 financial year, local authorities reported 944 LA-maintained schools with a deficit revenue balance. This represents 5.3% of such schools.”

Written Parliamentary Question, 2^nd November 2016, http://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2016-10-10/47869/

A recent survey undertaken by the NAHT on the funding situation in schools of their members found that:

• The number of schools currently in deficit has more than doubled since our 2015 survey (up 10 percentage points from 8 per cent to 18 per cent)
• Nearly three quarters (71 per cent) of school leaders are only able to balance their budgets by making cuts or dipping in to reserves.
• 72 per cent of school leaders say their budgets will be unsustainable by 2019.
• Increases in payroll costs as a result of government policies were cited as schools’ biggest financial pressures. These costs went up in 2015 and have resulted in an increase to school budgets of over 5.5 per cent every year, but there has been no resulting increase in funding from the government.
• 47 per cent of survey respondents reported the decline of local authority services as a cost pressure on schools, in particular the abolition of the Education Services Grant (ESG) to local authorities which is being passed through to schools. 65 per cent of academy school leaders told us they are concerned about the impact of cuts to ESG.
• The third most quoted source of financial pressure reported by school leaders was the cost of dealing with the additional needs of pupils, reported by 83 per cent of respondents. Members have expressed serious concerns about the extra pressure they are facing to support the growing number of children with mental health issues.
• The most commonly reported cost saving was reducing investment in equipment, which 85 per cent of respondents said they were having to do.

NAHT, 23^rd January 2016, http://www.naht.org.uk/welcome/news-and-media/key-topics/funding/breaking-point-a-report-of-the-school-funding-crisis-in-2016-17/