Teachers win fight over school cash

Oct 31 2007 by Urmee Khan, The Journal

MINISTERS have announced a U-turn on plans to claw back surplus money from school budgets after admitting teachers had raised “reasonable concerns”.

The Government had proposed a 5% levy on all excess cash held by schools in a bid to free up about £1.7bn in unspent reserves around the country.

Those moves would have affected more than 90% of schools in the North-East, which are currently sitting on over £87m.

But the plans – which were put out for consultation in March – drew a furious response from teachers, while the Conservatives said they would penalise prudent financial management. Doubts were also raised over assurances that the funds would be handed back to local authorities for their education budgets and the retrospective nature of the measure.

But in an unexpected move, Schools Minister Jim Knight yesterday backed down from the threat to claw back money.

He said: “My department is absolutely right to take action when the net revenue surplus in school balances has more than doubled since 1999-00 to £1.7bn on March 31 2007, with some schools’ surplus balances running into seven figures and still growing.

“This revenue funding should be spent on today’s children. It is intended for teachers’ pay and day to day running costs, not capital spending which is funded separately.

“I have already given local authorities clear powers to redistribute excessive and uncommitted surplus revenue. Our guidance judges ‘excessive’ as a secondary school carrying over more than 5% of its annual school income at the end of the financial year; and 8% of a primary or special school’s income.”

At the end of 2006/07 schools in County Durham had surplus balances of £14.8m for its 294 schools, which represents 5.9% of the schools budget overall.

Newcastle has surplus balance of £8.5m for about 100 schools, while Northumberland’s 200 schools were sitting on £10.5m. Vince Allen, North-East spokesman for the National Union of Teachers, said: “The union does not believe that money should be set aside by schools for ongoing projects like school building. The money should be used as it was intended, for school equipment and to ensure the school is properly staffed.”

Liberal Democrat schools spokesman David Laws, who led the calls to scrap the proposals, said: “This daft idea should never have seen the light of day.

“Headteachers and governors across the country were outraged about how the clawback was set to have a devastating impact on their school budgets and could even have led to staffing cuts”.

Les Lawrence, Local Government Association spokesman on children’s issues, said: “The Local Government Association supports the Government’s decision not to introduce a universal clawback of this cash.”