One in four maintained secondaries in the red

The government's school funding plans will fail to close the gap between struggling schools and those with healthy bank balances, warns think tank

School funding

More than a quarter of local-authority-funded secondary schools ended 2018-19 in deficit, an analysis shows.

The findings show that almost 30 per cent of maintained secondary schools in England were in revenue deficit in 2018-19.

However, 36 per cent of the secondary schools had an “excessive surplus” of cash in the bank, meaning their revenue surpluses were at least 5 per cent larger than their yearly income. 


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The Reform think tank, which carried out the research, said the "drastic variation" in school finances meant the government’s plans to fund all secondary school pupils at a minimum level of £4,800 to £5,000 would not target money at the schools most in need.

Luke Heselwood, report author and senior researcher, said: “Extra cash for schools is welcome, but it must be well spent.

“A universal ‘levelling-up’ approach risks wasting taxpayers' money, while failing to sufficiently help those schools in financial hardship.”

The findings show that, since 2011, the proportion of local-authority-funded secondary schools with no cash reserves has almost doubled, rising by 13.7 percentage points.

The average deficit for struggling secondary schools rose in the 2018-19 financial year to around £570,000.

The average surplus for secondary schools in the black was £391,500.  

Yorkshire and the Humber and the South West have the highest proportion of secondary schools in deficit, totalling 38 per cent in both. The East Midlands has the lowest.

Primary school finances are in considerably better shape, the Reform report notes. Just under 8 per cent of primary schools had no cash reserves in 2018-19.

Combined, the surplus cash for state-funded primary and secondary schools totalled £1.5 billion in 2019-19 – dwarfing the total deficit, which came to £195 million.

Chris Keates, acting general secretary of the NASUWT teaching union, said earlier this year that teachers were "angry" that schools were not funding the teacher pay rise despite having financial reserves.

Schools minister Nick Gibb has previously criticised schools that rely on parental donations for basic classroom equipment, while sitting on reserves.

However, of the schools in surplus in 2018-19, 9 per cent of secondaries and 7 per cent of primaries could have their reserves wiped out in 2019-20 if their in-year balances are the same as 2018-19, according to the analysis.

Reform is calling on the government to reconsider how it spends the additional £4.6 billion a year it has allocated to school funding in real terms by 2022-23 and target the money at schools in most financial need.  

The conclusion chimes with findings from the Education Policy Institute, which found that the government's plans would give the least disadvantaged schools a "disproportionate" amount of funding.

Reform's analysis also found that there is no correlation between revenues and secondary school attainment outcomes.

It also found that there were no clear reasons behind poor revenues. A school’s percentage of children on free school meals, or the number of support staff, did not necessarily correlate with its finances. 

The Department for Education has been contacted for comment.

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