Schools' cash piles are out of balance

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Education Editor

Primary schools are holding cash balances of up to pounds 100,000 while others are in the red, says a report from the Audit Commission published yesterday.

In secondary schools, the figures for reserves range from pounds 250,000 to cash deficits.

The size of school balances caused a row last year when Conservative MPs said schools should be spending their reserves rather than protesting about spending cuts. The latest report, which gives the first official figures on school budgets since last year's cuts, shows that three in five schools are digging into their balances to pay running costs for the current financial year.

Most balances, says the report on 71 schools, are earmarked for specific projects but some schools are keeping thousands of pounds in the bank for no particular reason.

The commission says balances should be kept to a prudent minimum and held for clearly stated purposes.

The primary school with more than pounds 100,000 in the bank has fewer than 100 pupils - but it was saving up for an unspecified project. However, one primary school had more than pounds 60,000 which had not been earmarked and one secondary had pounds 75,000, which it was not saving for a specific purpose.

The report shows that in one-third of schools, the amount of cash spent on each pupil went down last year. Pupil-teacher ratios are expected to rise this year to 23.2 in primary and 16.5 in secondary schools.

However, the amount schools of similar size have to spend on each pupil, from budgets delegated to them by local authorities, varies dramatically.

Some primary schools of between 100 and 200 pupils have about pounds 2,750 per pupil compared with others which have only pounds 1,250. Secondary school spending ranges from a high of pounds 2,900 to around pounds 1,800.

David Whitbread, education under secretary at the Association of County Councils, said: "Schools with delegated budgets need to have balances to cope with contingencies. Some schools need larger balances if they are saving up to buy a new mini-bus or plan to redecorate the school every three years.

Doug McAvoy, general secretary of the National Union of Teachers, said: "They [schools] can't plan for the future when they have to draw money out of their balances for running costs. The impact is seen in rising class sizes and resource shortages."

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