Local authorities deserve to inherit the deficits of schools that become academies, but not their surpluses, Nick Gibb has told MPs.

The schools minister defended the policy during a Commons debate on “improving education standards” that the government called this afternoon.

Gareth Snell, Labour MP for Stoke-on-Trent, asked him to explain “why he thinks it’s fair that schools that convert to academy status that have a deficit in their overall funding or their budget, then that deficit stays with the local authority rather than going to the multi-academy trust chain”.

He told the minister that this often “just produces an additional financial burden on local government”.

Mr Gibb responded: “The reason for that decision is of course that the deficit arose during the period in which the school was under the control of the local authority, and that’s the reason why the deficit remains with the local authority on conversion.”

The Labour MP then asked the minister to explain why any surpluses of schools that become academies are transferred to the academy trust rather than being inherited by the council, “given that that surplus will also have arisen under the local authority control”.

Mr Gibb said: “The answer is two-fold. First of all, the surplus is often working capital, and secondly they may well have been saving money from their revenue funding to purchase a capital item or building a science block or so on, and it would be a pity for those plans not to go ahead simply because they were being converted to academy status.”