Release date: 29/03/2017

A committee of MPs has warned that the Department for Education (DfE) does not seem to understand the financial pressure facing schools - the most significant since the mid-1990s -and is not in a position to act swiftly where cuts threaten the quality of pupils’ education.

Financial sustainability of schools

In its report, published today, the Public Accounts Committee said funding per pupil is reducing in real terms and if schools are to cope, then ‘efficiency savings’ will need to rise from £1.1 billion in 2016–17 to £3 billion by 2019–20. It says this is due to costs which are beyond their control, such as pay rises, higher employer contributions to national insurance and the teachers’ pension scheme, and the apprenticeship levy.

The committee concluded that savings have already been made, but the Government’s insistence that schools make more savings, which could come in the form of reduced spending on staff, will be hard to achieve without affecting the quality of education. Meg Hillier MP, who chairs the committee, said the Government must not be deaf to the experiences of headteachers who have already had to make potentially damaging cuts in areas such as maintenance, teacher recruitment and pastoral services.

Click here to read NGA’s evidence to the Public Accounts Committee

The committee says it is not clear how the Department will monitor both spending and performance so that it can intervene quickly where schools make efficiency savings that risk causing damage: “Without effective and timely monitoring of areas such as the breadth of the curriculum and class sizes, there is a real risk that the Department will not be able to prevent declining standards.” 

The committee is concerned that the Department does not know where schools are making savings now or what the impact will be. It says that the Department is relying on existing information such as Ofsted inspections and exam results. “However, these indicators are time lagged and we may not know the full impact on educational outcomes until 2021 when the new GCSE results come through. This will be too late for the children who are in school now.”

The committee also warned that the Education Funding Agency's approach to oversight of school finances means it does not intervene as often as it should or as early as it should in local authorities with maintained schools at financial risk. It gives the example of the Isle of Wight, where: “the Agency did not intervene…even though 13% of its maintained schools had deficits of 2.5% or more in 2014–15, the highest proportion of any local authority.”   

The committee says that the Department does not seem to be learning from the experience of other sectors, "in particular from how over-ambitious efficiency targets in the NHS proved counter-productive".

Meg Hillier MP, Chair of the Public Accounts Committee, said: "Pupils' futures are at risk if the Department for Education fails to act on the warnings in our report. It sets out more evidence of what increasingly appears to be a collective delusion in Government about the scope for further efficiency savings in public services.

“The Education Funding Agency's record on intervention, as well as its failure to evaluate whether its interventions are helping schools to address financial risk, does not inspire confidence. Government must take all necessary steps to ensure it can intervene quickly if action taken by schools to meet efficiency targets risks damaging standards.

“Grand plans drawn up in Whitehall are dangerous if they are implemented without regard to real-world consequences and we will expect to see measures to address our concerns as a matter of urgency."

Emma Knights, Chief Executive of the National Governors’ Association, has said: “Funding is now the biggest concern for governing boards across the country. Unless there is urgent reform an increasing number of schools will be unable to balance their budgets in 2017 without significant staffing reductions which will affect the quality of education provided to pupils. The Government must control public spending, but the education of our young people is fundamental to the future prosperity of the country.”

Recommendations by the Public Accounts Committee:

  1. The Department should develop and publish by the end of June 2017 a set of indicators, which it will monitor to gain assurance that the quality of education and the outcomes schools achieve are not being adversely affected by the need to make savings. These indicators might include the breadth of curriculum, class sizes and pupil-teacher ratios.
  2. The Department should build on the arrangements it is putting in place from July 2017 to speak to head teachers about the efficiency challenges they face, how useful they find the Department’s guidance and support, and what more the Department could do to help schools make savings.
  3. The Government should set out by the end of June 2017 the financial impact of the Apprenticeship levy on schools.
  4. The Department should publish by the end of April 2017 the results of its work to assess the impact of withdrawing the Education Services Grant; and it should routinely assess and make public the cost implications of policy changes including curriculum and assessment changes.
  5. The Education Funding Agency should set out by the end of June 2017 how it will refine its approach to intervening with local authorities and academies, including how and when it will evaluate the effectiveness of its interventions.
  6. The Department should write to us by the end of June 2017 outlining how its approach to schools’ financial sustainability reflects lessons from the experience of other sectors, in particular the Department of Health and the NHS.

BBC Governance Survey

Last week, the BBC published the results of an exclusive survey of more than a thousand NGA members; school governors and trustees in England. The survey looked at the decisions being made by our members to try and manage the unprecedented financial pressure facing schools, and what the consequences of those decisions will be for teachers and pupils.

The survey found that in 2017-18:

  • 39% of respondents expect to cut the number of full-time teachers, rising to 45% in 2018-19
  • 60% of respondents expect to cut teaching assistants and support staff hours
  • 42% of respondents expect to increase class sizes
  • 33% of respondents expect to reduce the number of subjects on offer. 

The survey also found that schools are going to extraordinary lengths to find more money. As well as renting out school facilities to local community groups or businesses for meetings, they are appointing professional fundraisers on commission, asking parents to carry out essential maintenance and seeking sponsorship from businesses. Some schools were asking parents for voluntary financial contributions.

More on this:

Unsupported budget cuts put education at risk, says National Audit Office

Emma Knights explains the financial situation facing schools on the BBC Breakfast show skip to 07.12

Funding the Future: supporting England’s schools

NGA and NAHT urge Chancellor to keep manifesto promise to protect per-pupil funding

‘The choice I have to make is an immoral one’, a guest blog by Claire Carter

NGA response to the Department for Education's consultation, 'Schools that work for everyone'

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