Ministers are considering further drastic cuts to school funding as chancellor George Osborne seeks to balance public finances in next week’s spending review, TES understands.
The Department for Education is proposing to slash funding that is handed directly to academies to cover the cost of services that would otherwise be provided by local authorities.
The prospect of gaining direct control over the money, called the education services grant (ESG), was the central factor in many schools’ decisions to convert to academy status when the Academies Act was introduced in 2010.
Cutting the funding would risk undermining the mass academisation policy that has been a key success for Conservative education ministers. But a well-placed source told TES that – with other parts of the DfE’s budget, such as post-16 funding, already on course to take big hits – compromises had to be made.
“You have to look at other areas; you have to consider how much can you take off [the] 16-19 [budget] without it toppling over,” the source said. Schools were already facing real-terms cuts because ministers’ “cash” guarantee for 5-16 per-pupil funding would not keep pace with rising costs.
Need for ‘progressive funding’
Teaching unions have warned that existing budget pressures are hitting schools hard. A survey of school leaders published today by the Association of School and College Leaders (see data panel) shows more than half expect to cut staff costs in the next year.
This week, the NUT revealed that nearly half its school reps are reporting cuts to teaching posts (see bit.ly/NUTstaffsurvey). Meanwhile, the NAHT headteachers’ union wrote an open letter to education secretary Nicky Morgan calling for “progressive” education funding.
But ministers have to meet the chancellor’s demands for cuts of between 25 and 40 per cent to so-called “unprotected” budgets in every government department.
At the time of writing, the DfE had yet to reach a settlement with the Treasury. But TES has learned that the department is hoping to negotiate savings of 20 to 25 per cent over the next four years. Sources close to education ministers would not be drawn ahead of the spending review’s publication on Wednesday.
However, it is widely expected that the 16-19 budget will take the biggest blow for education, followed by the early years budget. Ofsted is also tipped for significant cuts.
TES understands that officials are being forced to consider going further, with a raid on the ESG, after prime minister David Cameron decided to protect universal free school meals for infants. His promise committed the DfE to additional spending of around £600 million a year, a move believed to have frustrated officials in the DfE.
‘A huge hit’
The department has already been forced to cut the £1.02 billion ESG budget by £200 million this year, as it sought to protect the 5-16 schools budget and the pupil premium. In academies, the ESG dropped by £53 in 2015-16, from £140 to £87 per student.
Malcolm Trobe, deputy general secretary of the Association of School and College Leaders, said: “The ESG already took a big hit this year – the £53 [cut] was a huge hit – and any further reduction would have a significant impact on academy funding.
“Given that there are huge cost pressures on school budgets this year, it would be a major issue if there were any reduction in the ESG.”
The cut in the ESG rate meant some academies lost up to 3 per cent of their total funding from government.
Steve Lancashire, chief executive of academy chains Reach 2 and Reach 4, said sponsors were bracing themselves for a tougher settlement. “We’re already planning for that – it’s the nature of what’s coming,” he said. “For us, it’s about how we do what we do as effectively with less resource.
“The economies of scale we get for our schools have to be better. We need to look at different ways of organising schools. So, for example, the ‘one school, one headteacher’ model needs to be looked at. And for us, it’s about how we help our schools to generate more income. It’s about how we do more for less – and we have to start doing it now.”
A DfE spokesperson said: “This government is taking the difficult decisions necessary to ensure that the schools budget is protected and will continue to rise as pupil numbers increase.”
See Leadership, pages 16-17
‘We’re close to the edge’
Chris Healy, headteacher of Balcarras School, an 11-18 academy in Cheltenham, writes:
We have been on the wrong end of every funding change in the past few years: post-16, high-needs SEND, revision to the county formula. The crux is that our overall funding has been falling while our costs increase remorselessly.
This year, we have 75 more students but £249,000 less funding than in 2010-11, when the coalition came into office.
Since 2012, we have cut our teachers by 4.4 posts, we have reduced our support staff by three and we now only employ teaching assistants who are directly attached to a pupil with a statement of SEND.
We can no longer afford to sustain our superb ICT platform and we have cut the budgets of everything else: maintenance, cleaning, midday supervision, furniture and equipment.
We are pretty close to the edge. Everything is stretched to the limit. Our deputy heads work 25 periods out of 50. We need every teacher here every day, and if we have absence I worry that the impact of having to cover another lesson will make another teacher go off sick.
What would we do if there were further cuts? We couldn’t cope.
You can’t cut any more than we have. We need more money. It’s as simple as that.