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Schools keep too much in the bank

Cash reserves reach new high as heads show caution. James Graham reports

Welsh school reserves increased by 14 per cent last year, leaving heads with bank balances worth pound;78.4 million - the equivalent of pound;164 for every pupil in Wales.

Headteachers said they needed to put money away to keep up with the latest initiatives and regulations. But teachers' union NASUWT Cymru said the tactic could undermine future demands for more cash.

A five-strong committee of Assembly members is investigating the "funding fog" surrounding school budgets in Wales, following claims from the Association of School and College Leaders Cymru (ASCL) that Welsh schools are pound;150-200 per-pupil worse off than those in England.

But Geraint Davies, secretary of NASUWT Cymru, said: "Schools complain there's insufficient money in the system to pay teachers the new salary scale or to implement 10 per cent planning, preparation and assessment time.

"When I'm confronted with reserves of this magnitude, it makes my job of going cap in hand to the minister much more difficult."

Council education directors have told the Assembly's school funding committee that schools should be investigated to see how efficiently they use their funding.

Brian Rowlands, secretary of the ASCL, said the latest figures were misleading because they do not take into account committed expenditure, only the amount in school coffers on March 31.

Pat Clarke, past president of the National Association of Head Teachers Cymru and head of St Mary's primary in Wrexham, said: "Money earmarked for the next financial year is included, as well as the income that primaries are generating themselves."

The reserves, which rose for the second year running, range from pound;66 per pupil in Monmouthshire to pound;254 in Conwy. Primaries held 60 per cent (pound;47.3m) of the total. Cardiff's schools had the biggest reserves (Pounds 8.3m) but Conwy's retained the highest proportion (8.2 per cent), with half retaining more than 10 per cent.

Schools are permitted to hold reserves for contingencies, although the Wales Audit Office says they must have a good reason for keeping back more than 5 per cent of budgets. However, most (58 per cent) held back more than that, rolling over pound;63.4m between them. A quarter of primaries retained more than 10 per cent.

But 163 schools face deficits totalling pound;4.1m at the end of the financial year. In Powys, where reserves stood at 4.2 per cent, one-third of schools were in the red.

Reserves hit 9 per cent last year at Ysgol Duffryn Conwy, Llanrwst, to help cover relocation costs, but are now 4 per cent. Head Ifor Evans believes others are insulating themselves against new initiatives.

An Assembly spokesperson said the Welsh average of 5.1 per cent (up from 4.7) was broadly in line with the audit office's recommendations.

But she added: "There is concern that, in a number of local authorities, average reserves are now in excess of 6.5 per cent. Regulations have been put in place requiring local authorities to monitor reserves over 5 per cent."

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