More than 20% of state schools were found to be in a budget deficit for 2019/2020 by the Public Accounts Committee.
The parliament spending watchdog has revealed that ongoing funding issues have led to cutbacks in curriculum and staffing across the UK that are still being felt today, with local-authority secondary schools and colleges most affected.
In contrast, one in five academy trust schools, institutions funded by central rather than local government and classed as non-profit companies, were found to be in excess, with reserve budget balances equal to roughly 20% of their annual income.
This has led the Public Accounts Committee (PAC) to call upon the department of education to investigate whether the higher reserves being sat on are justified given the current financial pressures in the education sector. The overall surplus is held for capital building, not spent on pupils’ education, and is estimated to be around £3.1bn.
The Department of Education (DfE) has argued that the sector is in good financial health and that the more recent 2020/2021 budget includes increased funding to ensure less of the maintained schools are left behind. Bringing their estimated total of schools in deficit down to 8% from 12% the year before, figures that the PAC say conceal the reality of disparities in spending for education.
The PAC have disputed the formula devised in 2018 and used by the DfE to allocate funding to schools, as in some cases funds have even been diverted away from deprived institutions most heavily reliant on free school meals. The DfE, however, insist that their investment in schools is rising, and that the 4.7bm promised in the 2021 spending review will be enough to account for mounting pressures in staffing and budgets, as well as the strain of Covid-19.