Do you have to rob councils to pay academies?

Much heat expended this week over the Academies Bill, which could easily see over 1000 ‘outstanding’-rated schools turned into academies before the school year starts in September. But nobody seems to have an answer to an important question: will all these academies converted from state-maintained schools leave local authorities – who still have to fund lots of their own schools – out of pocket?

The figures are startling. The Department for Education’s table of how much money secondary level academies can claim in equivalent funding from councils ranges from £1322 (Islington) to £217 Buckinghamshire).

Academy funding is rather complicated, but in layman’s terms it’s a two way process. If a traditional maintained school becomes an academy, it no longer receives certain services from the local authority, such as assessment for free school meals eligibility, library services for primary and nursery pupils and admissions services. The academy gets money to cover this, called (deep breath) local authority central spend equivalent grant (LACSEG).

The money is paid out centrally, although it’s calculated on a local basis by councils since each council spends and allocates money differently. And it includes a portion of the money which local authorities spend on schools which isn’t part of their schools budget – for example on central administration.

The second part is where central government claws back the money the council used to spend on the school before it beccame an academy, in a process called ‘recoupment’. This recoupment covers the amount in the council’s schools budget and its special needs budget – but, crucially, not the non-schools budget money which academies get. Still with me?

The National Union of Teachers – which has always been anti-academy – has raised two concerns about academy funding under the coalition government. Firstly, they say that the way local authorities have calculated the LACSEG figures for this year is an over-estimation – they’ve included money from far too many budget areas. As a result, academies will get much more money that previously – several times more, they claim – and the resulting shortfall in Whitehall’s education budget will be taken from state schools, they fear.

Says the NUT’s head of education John Bangs: “What’s happened is that some authorites have taken that advice seriously and they didn’t have to. It was advice that was over-slavishly followed. It’s the independent authorities that put two fingers up to government that are surviving.

“It’s the local authorities’ fault but it’s the government as well. There’s a massive imprecision in funding.”

Whether councils will lose out is rather hard to prove – though it would make sense if the government, keen to create as many academies as possible, had over-egged the pudding when it comes to guidelines on how much money academies are entitled to.

But what’s not in doubt is that the recoupment amount – what councils get taken away from them – looks as though it may rise. The Independent covered the issue of academy funding recently but overlooked this point (maybe because the Academies Bill papers weren’t all out by then). For the first time, the government is considering taking an additional amount away from councils to cover that non-schools budget portion (remember that bit?)

Or as the DfE technical note on their website beautfully puts it: “There is currently no recoupment in relation to the LA Budget portion of LACSEG. For 2011-12 onwards the methodology for adjustment of the DSG for academy conversions is still under consideration following consultation.”

In other words… watch this space on that one. But if there’s any change, it will almost certainly mean councils do lose out.

(from Tribune blog)


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