Page last updated at 17:01 GMT, Friday, 8 January 2010

Fewer schools hold 'excess' funds

head teacher doing paperwork
Head teachers and governors are supposed to balance the books

The amount of money head teachers in England hold back from spending on current pupils has fallen for the first time since 2003, the government says.

But more than 7,000 schools, just under a third, still hold surplus balances that are deemed to be excessive - totalling £495 million.

The leader of one teachers' union called this "unacceptable stockpiling of public money".

The number of schools with deficits rose last year by 153 to 1,848 or 8.4%.

The Department for Children, Schools and Families said about half of their deficit balances were below £25,000 but the average deficit was just over £75,000.

This is not prudent financial management, as some would claim, but unacceptable stockpiling of public money.
Chris Keates
Nasuwt general secretary

Schools are expected to keep a small reserve for unexpected spending requirements, but anything above 5% of annual income for secondary schools and 8% for primaries is considered an "excessive" surplus.

Schools Minister Vernon Coaker said there were still too many of these.

"It's good to see that the majority of schools are managing their budgets well and also that the number of schools with excess surplus balances has fallen to its lowest level in these 10 years to just over 7,000 schools," he said.

"However, overall the level of surplus held by some individual schools is too high.

"While it is clearly sound financial management for schools to retain a small surplus from year to year, we expect revenue funding to be used to support the education and well-being of pupils in school now."

The figures show a drop in the number of schools holding extra cash (that is funds said to be excessive as well as extra cash generally) with 91% of schools (around 20,000 in total) holding a surplus balance in 2008-09, with £1.9bn in total.

General secretary of the NASUWT teachers' union Chris Keates said: "Whilst there may have been a slight reduction in the amount of money held in balances, the fact remains that they are still at an unacceptably high level.

"This is not prudent financial management, as some would claim, but unacceptable stockpiling of public money."

She added: "Local authorities already have the power to claw back and redistribute surplus balances. They should get on and do it."

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