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Stat of the Week - Cash in the bank at one secondary

How much should a school keep in its piggy bank? Is a nursery school with almost Pounds 82,000 in reserves, equal to a third of its annual income, being unfair to present pupils or sensibly saving for a rainy day? Does it matter if the school is in a deprived area? What about the primary school not far away that is sitting on nearly a quarter of a million pounds; a balance that's growing at the rate of about Pounds 30,000 a year, or the price of an extra teacher for today's children? Both of these pale into insignificance compared with the secondary school with Pounds 1.35 million, or 20 per cent of its annual turnover, in the bank: a figure that has grown by more than Pounds 300,000 over the past couple of years.

To be fair, most schools' year-end balances are normally much closer to 10 per cent of turnover and some even run deficits. But 20 years after local management of schools was introduced, the question remains: Why are so many schools not spending funding allocated to be spent on the education of their current pupils? Does it mean that some schools have accepted the notion of depreciating their assets and keep money in the bank for a new minibus or computer suite when the current one runs out? If so, is this what is intended by the Government, and should all schools now adopt the practice?

There is also the more debatable issue of setting cash aside for a special project that is clearly a capital item. Should schools ever rob Peter to provide a better education for Paul in the future? The notion of pupil premiums suggests that paymasters expect today's money to be spent on today's pupils.

John Howson is a director of Education Data Surveys, part of TSL Education.

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