Academy money to be returned to councils

LGA media release 17 July 2012

Responding to today's Government statement on academy funding, Councillor David Simmonds, Chairman of the Local Government Association's Children and Young People Board, said:

"School choice is something councils support but it has to come hand-in-hand with fair funding. We want to see equality of funding across all types of schools, but under the current system that is not the case. Instead, we have two-tier funding with local taxpayers effectively subsidising the roll-out of academies.

"We have long argued that the current funding system is flawed and Government's decision to repay around £58 million, which is around 40 per cent of the £148 million taken for 2011/12, represents a welcome change of approach. The reparation will go some way to alleviating the unprecedented budget squeeze local authorities are facing. Councils will also now have a sound basis on which to plan their spending for the rest of this year.

"There are still questions around the funding methodology for 2013/14 and beyond. We are concerned that flawed Whitehall calculations could see the local government store cupboard being raided once more for hundreds of millions of pounds. This threatens to impact far beyond the classroom and could affect councils' ability to provide and protect other important frontline services.

"The LGA will continue to work actively on behalf of our communities to press Government to get this right and reach a solution that is fair for all our children."


Author: LGA Media Office
Contact: LGA Media Office, Telephone: 020 7664 3333

Notes for Editors:

The LGA produced an on the day briefing:

LGA briefing: Local Authority Central Spend Equivalent Grant

Local education authorities had their funding cut by £413 million over two years – £148 million in 2011/12 and a further £265 million in 2012/13.

This was to pay for the central functions that academy schools provide for themselves such as financial administration, employment practice, assessment of eligibility for free school meals and management of the admissions process.

Every council responsible for education services, 152 in total, originally had their funding top-sliced, even if they had no academy schools in their area. This method of withdrawing funding has now been changed by the Government for 2011/12 and 2012/13.  Where the new method gives a more favourable answer – as it will when an authority had no academies in its area – the Government will pay a refund to the authority.  But where the new method is potentially less favourable, no further adjustment will be made, so no authority will lose out.

For 2013/14 and subsequent years, the Government is consulting on new arrangements for paying for the central functions needed by both local authority schools and academies. The proposed new method would offer funding at a much more uniform rate across the country. But it involves taking more money away from local authorities than LGA analysis suggests was ever included in the Government's formula grant.

24 March 2015

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