Conferences, Shows & Reviews - What was said.

Over the last few weeks there has been the NASBM Annual Conference, the Academies Show and the Spending Review.

Here is our quick catch up on some of the talking points from these.

Real term cuts for schools, academies & colleges

Commentators looking at the details of the Autumn Spending Review are suggesting that for most schools, academies and colleges there are real term cuts of around 8% in budgets, with increased pension and national insurance costs accounting for much of this. There will of course be some variations between establishments; especially when a formula for a national settlement to schools and colleges is introduced; there will inevitably be winners and losers as a result of this.

The headlines:

• Consultation will start in January 2016 on the introduction of a fair funding formula to be introduced from 2017/2018.
• Per pupil protection for the dedicated schools grant and pupil premium. The increase in the budget announced in the spending review is to cope with the increased numbers of pupils.
• The current national base rate funding for 16-19 year olds will be protected.
• Around £600million will be cut from the Education Services Grant (ESG). The ESG is paid to councils and academies (currently at a rate of £87/pupil) to provide support services for schools. The intention appears to be to reduce council roles in schools by removing statutory duties – and therefor create efficiency savings.
• Capital investment of £23billion to provide 600,000 additional school places. This will be used to open 500 new free schools and rebuild or refurbish a further 500 schools.
• Free childcare will be increased from 15 to 30 hours per week, and places will be available for children from the age of 2.
• Sixth form colleges can become academies, allowing them to recover non-business VAT costs.
• By 2020 there will be 3 million high quality apprenticeships.

The Department for Education’s press release can be found here.

More academies

As well as the 500 additional free schools, more local authority maintained schools are likely to become academies if the provisions of the Education & Adoption Bill concerning failing, coasting and under performing schools becomes law. A copy of the bill can be found here.  Under its provisions failing schools – those Ofsted deems to require significant improvement or special measures – will automatically be required to become sponsored academies with no time given for a school improvement plan to be set in place. There will be no consultation with parents, staff, the local authority or the wider community about this. Coasting or under performing schools may also be forced into sponsored academy status. The Government is currently consulting on new guidance for Regional Schools Commissioners on implementation of the Bill’s provisions.

Bench marking

The Department for Education has updated the data held in the bench marking websites it maintains. Financial data can be accessed at https://www.education.gov.uk/sfb/ School and college performance tables can be accessed at http://www.education.gov.uk/schools/performance/ All schools and academies should be using bench marking data to compare their performance both with similar establishments and those they aspire to match.

EFA notice to improve

The Education Funding Agency (EFA) will serve a Financial Notice to Improve (FNtI) when it becomes aware of serious allegations of financial irregularity or poor governance. Compliance with the Academies Handbook is paramount, but managers should also be aware of other guidance issued by the EFA. ‘Dear Accounting Officer’ letters issued by the EFA often highlight current concerns and provide specific advice on issues of accountability, regularity and propriety and annual accounting exercises. All those dealing with academy finances should be aware of them. Click here. FNtI are published by the EFA (https://www.gov.uk/government/collections/academies-financial-notices-to-improve) and Governors, Heads and School Business Managers should review these regularly as they may suggest areas of improvement for your Academy.

Recent notices have identified the following weaknesses:

• Irregular financial payments
• Weaknesses in financial oversight exercised by Governors & Trustees
• Lack of policies around procurement and recruitment to ensure public funds are protected and secure best value
• Poor or non-existent independent financial checks, risk management, internal controls and appropriately qualified finance staff; all of which are required by the Academies Financial Handbook
• Incomplete registers of business interests – note the latest regulations extend this beyond trustees and staff to family members.

One further point – If academies are heading for a deficit budget they must notify the EFA as soon as this becomes apparent. Academies should also put forward a robust business plan of how they can resolve the financial situation in the short, medium and long term.  The EFA have advised that they are aware some budgets submitted are unrealistic and they will be planning to visit schools of concern.

Finally – for academies that opened 1 September

The EFA provide a welcome pack for new academies and free schools – click here for a copy

You are reminded that:

• Three months after opening – converting academies without a sponsor should finalise their closing balance with the local authority
• Four months after opening – new academies and free schools must submit their Financial Management and Governance Self-assessment to the EFA, unless alternative assurance methods have been agreed with the EFA.