Funding crisis: Three-quarters of schools 'already using their reserves'

Written by: Pete Henshaw | Published:
Photo: iStock

Many schools' budgets will be "untenable" within two years, while many headteachers have already begun dipping into their reserves to make ends meet.

A survey of school leaders by the National Association of Head Teachers (NAHT) has revealed the stark financial pressures many schools are facing.

The survey, involving 1,069 school leaders, including around 200 secondary leaders, found that 45 per cent believe their school’s budget will be “untenable on current projections within two years”.

Seven per cent of those surveyed are already running a deficit, while 67 per cent said they would not be able to balance their books in four years’ time.

A majority warned that they were only making their budgets stretch by implementing “significant cuts”, while 76 per cent admitted they had already begun using their school’s reserves.

Reductions in expenditure on equipment (64 per cent), maintenance (50 per cent) and teaching assistant hours (49 per cent) were also reported. More than 80 per cent of the school leaders said the budget situation would have a negative impact on standards.

The NAHT has called for the government to “match the overall level of funding to the real cost pressures in schools, including meeting the shortfalls in funding for early years, sixth forms and for services previously provided by local authorities”.

It adds: “We need a fair national funding formula to ensure that limited funds go where they are most needed but, given the difficulty in cushioning changes, we need a well-planned transition with sufficient time to adjust.”

It comes as education secretary Nicky Morgan hinted that plans for a new fairer national funding formula would be forthcoming in the new year. In a letter to the Education Select Committee, Ms Morgan wrote: “I do recognise that schools funding is a complex issue, and that it is vital that we consult the sector and public on proposals to make funding fairer before implementation.

“I warmly welcome your committee’s direct input and strongly encourage any activity that brings further public attention to this important issue. While I cannot yet give a date for a consultation, I would suggest that your committee may wish to think about looking in detail at this issue early in the new year, once the Spending Review is complete and the chancellor has set out the total funding envelope in the coming years.”

Russell Hobby, general secretary of the NAHT, pointed to increased cost pressures on schools including an increase in employer’s contributions to the Teacher’s Pension Scheme, from 14.1 to 16.5 per cent as of September 2015, and the impending increase in employer’s national insurance contributions by 3.4 per cent from April 2016.

He said: “Flat cash education spending at a time of rising costs is pushing many schools closer to breaking point. Employer costs for national insurance and teachers’ pensions will increase by over five per cent from this school year, adding to already over-stretched budgets. School leaders are being forced to cut spending in all areas, including essential maintenance and, most worryingly, on teachers and teaching assistants.”

Elsewhere, the NAHT has also called for automatic registration for the Pupil Premium and further investment in the development of school business managers.

Responding to Ms Morgan’s letter, chairman of the Education Select Committee, Neil Carmichael, said: “It is widely acknowledged that the exist- ing school funding model needs to change. I’m grateful for the secretary of state’s indication that the government’s consultation on school funding is likely to emerge in the new year. As a committee we take a keen interest in this matter and will want to examine the government’s proposals at an early date.”


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