Funding mechanisms for the burgeoning number of academies in England have caused a series of embarrassments for ministers since the Coalition was formed. And now there is more.

TES has learnt that scores of secondary academies are having their budgets “adjusted”, sometimes by as much as pound;150,000, in the middle of the school year because of failings in the funding system overseen by the Government.

The problem means academies, who planned their budgets at the beginning of the academic year, have seen their coffers shrink by tens of thousands of pounds a few months down the line.

According to the Department for Education, delays to how the budgets are being calculated by central Government has meant schools that converted to academy status between April and August this year are the most likely to be affected.

Some academies are still waiting to be told their final budgets for the current academic year, despite being a third of the way through it. The issue follows a similar problem earlier this year, when a number of academies were either over or under-funded after a mix-up left some schools, such as those in Hampshire, receiving up to pound;300 more per pupil than they were entitled to. The latest hitch has meant some schools are facing significant holes in their budgets with very little means of filling them.

Sandy Woodcock, finance and facilities manager at Ribston Hall High School in Gloucester, said the readjustment has seen her school’s budget drop by pound;100,000. “We were given what we were told was an indicative budget in October, so we could plan ahead,” Ms Woodcock said. “We were then sent a letter telling us our budget was to be adjusted, but we were not told whether it would be a positive or negative adjustment.

“I understand we are in a time of decreasing budgets, but the problem is schools have to work to such a long time frame.”

The DfE has blamed the delays on an overly complicated system currently being used by the body responsible for academy funding, the Young People’s Learning Agency (YPLA).

Caistor Grammar School in Lincolnshire converted to academy status in 2010 but, according to headmaster Roger Hale, the school is still waiting to be told by the YPLA what its final budget will be for this year. “We have pound;50,000 more in our indicative budget than we had last year and we’re not sure whether we are entitled to it,” Mr Hale said, adding that the YPLA are “inept”.

The YPLA is expected to be dissolved in April next year to become the Education Funding Agency, acting within the DfE.

The Association of School and College Leaders (ASCL) said the system the YPLA was using to calculate schools’ budgets worked well when just over 200 schools in the country were academies. But with nearly 1,500 academies now open nationwide, the body was straining under the workload.

“Many academies are being told budgets that are pound;100,000 to pound;150,000 out. It is over the whole of the year, but it is a significant change to deal with,” Malcolm Trobe, ASCL deputy general secretary for policy, said.

“The YPLA has to use a method that replicates the funding formula used by councils to calculate maintained school budgets, and then use that to allocate money to academies, which is a very complex system,” he added.

Academies are funded on the equivalent per pupil amount to state maintained schools in the same local authority. They receive additional money to finance services previously paid for by the council, called the local authority central spend equivalent grant (LACSEG). Over the summer, miscalculations of the LACSEG meant some academies were over-funded, with some schools receiving an extra pound;300,000.

The DfE said it was aware of the problem and openly admitted the academy funding system was “not perfect”.

“The complexity of the current funding system means that, in a small number of cases, some calculations take longer to resolve. We’ve always been clear that the current system needs to be reformed,” it said.

With the speed of academy conversions not set to decelerate any time soon, the pressure on the system is only going to grow. The reform of which the DfE speaks clearly cannot come fast enough.

Original headline: Clear as mud: academies left in chaos over budgets