End of year balances held by schools are rising in spite of the failure to fund teacher pay awards fully and despite cuts in school funding in real terms. Money is being shifted away from secondary schools into primary. But this has yet to be reflected in falling class sizes or increased non-contact time for teachers. Instead, primary schools seem to be squirrelling away even more money.

A survey of 6,896 schools by the National Association of Schoolmasters Union of Women Teachers (broadly confirmed by a smaller Audit Commission survey) found that on average primary schools failed to spend 5.6 per cent of their budget by the end of the 199192 financial year. By the end of 199495, this had grown to 7.4 per cent, almost twice the 3.9 per cent balances held by secondary schools in both years. The average primary school held back Pounds 23,500 in 199495, enough to pay for an additional teacher. The average secondary school held back enough to pay for three more staff.

Figures from the Department for Education and Employment show funding for primary pupils grew by 4 per cent in real terms over this period compared with a 3.3 per cent fall in secondary schools. Overall, spending per pupil fell by 3.3 per cent in real terms between 199293 and 199495.

Meanwhile, average class sizes have risen 4.8 per cent in secondary schools and by 3.8 per cent in primaries since 1991. Class contact ratios have improved in primary schools by just over 1 per cent. In secondaries, they dropped by 1 per cent.

Locally managed schools are entitled to carry over balances and many save for special projects or in anticipation of fluctuations in pupil numbers. Less than two thirds could tell the Audit Commission why they were holding their balances, however, and some schools are sitting on the equivalent of 20 per cent of their annual budget. The NASUWT survey found one school with balances in excess of Pounds 1million.

The Government and local authorities are more ready to question claims that schools need more when they apparently have so much unspent cash in the bank. One authority spent Pounds 9 million above the level the Government estimated it needed to fund education, only to find its schools did not spend Pounds 7million. Unspent balances reduce the education standard spending assessment, the amount the Government calculates schools need to spend.

Survey of School Budgets in England and Wales published by NASUWT, Hillscourt Education Centre, Rednal, Birmingham, B45 8RS.