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Funding doubts remain

Will the Micawberish formula of a minimum 4 per cent increase per pupil next year against a predicted 3.4 per cent increase in costs be sufficient to dig any schools out of the funding hole created this year by the Government? Who knows? Certainly not the Department for Education and Skills.

To its credit, the department has at least studied the likely impact on schools of the Government's funding plans this time, something it failed to do for 2003-4. But it still lacks a clear picture of this year's crisis, when rising staff costs and reorganisation of central funding left a majority of schools worse off and some with six-figure deficits. The department does not know how many schools survived only by cutting staff, by draining their reserves or simply by going into the red.

Restraining growth in salaries and guaranteeing a minimum increase per child will ensure things do not get worse. But it is now clear that the Government regards it as the responsibility of schools and local authorities to clear the deficits created by this year's funding round and that many schools will only be able to do so by employing fewer - or cheaper - staff. Schools and local authorities are, in effect, now given two years to balance their budgets by their own efforts. Some are offered transitional funding or loans in the meantime and heads are to get training from KPMG and the Government's own National College for School Leadership in "managing resources effectively" - a euphemism for sacking expensive staff.

Funding is due to improve in 2005-6. But so are schools' commitments under the workload reduction agreement. So far, support for that seems to be holding together despite the financial disappointments. The full effect of this week's announcements has yet to be digested, however.

How long that consensus would survive if heads find that the remodelling pact with the Government requires them to sack loyal, hard-working and much-needed staff to balance the books remains to be seen.

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