By Richard Johnstone | 5 June 2013
English councils are to be given a £94m education refund for 2012/13 after Whitehall took too much from local authority grants to pay for services at academy schools.
Some of the funding given to town halls for local education services is transferred to schools when they are given academy status. This is intended to cover the cost of previously shared services, such as financial audit andasset management, for the converted schools, which receive most of their income from the Department for Education's Education Funding Agency.
However, the department has admitted that the estimate of how much councils would need to contribute to schools that convert to academy status in the past financial year, which was set in December 2010, was wrong.
This meant that cuts in local authority grants to pay for the services at the academies, which were calculated on a pro-rata national basis, were larger than they should have been in 2012/13 in many cases. As a result, 100 councils are to have a total of £91.62m returned following an examination of the actual figures. This follows £58m that was refunded in compensation for cuts in 2011/12.
Following a consultation on the ‘recovery arrangements’, the Department for Education said: ‘We have refunded any local authority where the amount deducted from formula grant for 2011/12 and 2012/13 was greater than it would have been had the deduction been based on the number of pupils in academies in that authority over each of the two financial years.
‘Where the amount deducted was insufficient, no additional money has been recouped. This is in order to maintain stability in local authority budgets.’
The decision has been welcomed by the Local Government Association, which said that the funding had been ‘incorrectly taken’ from town hall budgets.
Chair of the LGA’s children and young people board David Simmonds said he was pleased to help councils secure the return of the money.
He added: ‘This money is essential to providing vital support services to schools and students. This is ultimately a victory for mums, dads and their school-age children.’
