Schools forced to return £15m in academy cash blunder

Schools are being required to return around £117,000 each – 10 per cent of many schools’ budgets – after the accountancy blunder, it was revealed. Head teachers’ leaders claim that the move will force some schools to make staff redundant and cut building projects to make up for the shortfall. It will be seen as an embarrassing blow to the Coalition which has pledged to rapidly expand the number of academies in England as part of a sweeping overhaul of the state education system. As independent state schools, academies are funded directly from Whitehall – instead of through local authorities. They also get more powers to alter the curriculum, staff pay, length of the school day and shape of the academic year. According to data released through the Freedom of Information Act, 128 academies have been were handed too much public money this academic year. The overpayments total almost £15m. Allan Hickie, a partner at accountancy firm UHY Hacker Young, which obtained the figures, said: "A number of academies will now have significantly less money than they anticipated, and many will already have allocated this funding." He told the Times Educational Supplement: "Schools have to work to long time frames when planning investment. Significant adjustments to funding two-thirds of the way through the academic year can cause serious cash-flow problems." The firm said it had dealt with one primary school that had been given £190,000 too much, a sum equivalent to about five teachers on an average salary. The error is being blamed on a complex system used by a Government quango to fund academies. Schools receive extra money for services previously provided by local authorities, such as transport and support for special needs pupils. In some cases, funding is based on projected pupil numbers rather than the actual roll. Half of secondary schools have now converted into academies or intend to convert. Russell Hobby, general secretary of the National Association of Head Teachers, said a large proportion of school budgets were spent on staffing, adding that heads would be forced to "consider issues around redundancies" to make up for shortfalls. "There is no other place in the budget to cut," he said. "It is a big blow to these schools." A Department for Education spokeswoman said: "A small proportion of academies - mostly older sponsored academies - receive funding based on pupil estimates, not actual pupil numbers. In cases where actual pupil numbers don't match estimates, we claw back excess funding - based on the terms in funding agreements. "We are working to ensure that all schools are funded fairly."