06 June 2003
Lack of financial management in schools was a 'critical factor' in this year's funding crisis, the Local Government Association claimed this week.
In comments likely to further inflame the debate about the black hole in schools budgets, Graham Lane, chair of the LGA's education executive, clearly pointed the finger of blame at heads and governors.
He said heads 'needed help' managing costs and should be more closely monitored. 'This is not a new issue, the need to improve financial management has been highlighted by the Audit Commission,' he told the LGA's annual education conference on June 4.
Lane said councils needed more authority and should be given more freedom to make adjustments to school budgets in-year and set three-year indicative budgets.
Councils should also be given more powers to examine school underspends, he said. 'Schools have a responsibility and a right to maintain sensible levels of contingency funds and plan for their long-term financial needs, but we need to honestly examine the efficacy of keeping £1.1bn locked up in school coffers.'
Lane's comments were supported by the NASUWT teaching union. Eamonn O'Kane, its general secretary, said the funding fiasco, which has left most schools with serious shortfalls, highlighted the problems of local management of schools. 'Frankly, the issues of funding mismanagement and large balances are a consequence of LMS,' he told Public Finance. He added that local control of salaries had exacerbated funding problems and called for a 'more coherent' financing system with LEAs at the centre.
Lane was also critical of this year's new funding formula, which he described as mind-boggling in its complexity, and called for one giving councils more flexibility.
Lane also suggested a three-year pay settlement for teachers.
His comments contrast sharply with those of Education Secretary Charles Clarke, who is understood to be considering directing all funds straight to schools.
'We can stack up a million arguments against such centralising principles,' Lane countered. 'The prospect of 8 million pupils in 25,000 schools being organised from London is unthinkable.'
The NASUWT has also released figures suggesting that teaching redundancies due to budget shortfalls are likely to be fewer than anticipated. According to a survey of 59 LEAs in England, 34% of the 237 job losses are due to lack of funds. Previous surveys had estimated 1,500 redundancies.
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