Opt-out schools 'are paid twice': Rules mean councils lose pounds 13.7m a year

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SOME opted-out schools are receiving double funding for services as part of government policy, a senior civil servant told the House of Commons public accounts committee yesterday.

Sir Geoffrey Holland, Permanent Secretary at the Department for Education, said he did not dispute figures showing that 50 councils are losing pounds 13.7m because of rules which mean that opted-out schools get paid twice for some services.

Questioning Sir Geoffrey, Michael Hall, Labour MP for Warrington South, said: 'They are being over-funded and the Department for Education is not going to do anything about it.'

Sir Geoffrey replied: 'That is correct.' He added however, that the rules had been changed and that for most schools opting out since April figures were based on the amount individual authorities were spending.

Some of the 492 grant-maintained schools are being double funded through their annual maintenance grants for activities such as advisory and library services, which were originally funded by the local authority.

The rules for schools opting out before April 1993 are based on the principle that they receive 15 per cent in return for services they would have received if they had stayed within local authorities. However, some councils are allowing only 7 per cent for central services and delegating the rest to schools.

Mr Hall also questioned Sir Geoffrey about the Grant Maintained Schools Centre, which the Government funds to help schools wishing to opt out. He suggested there had been serious misgivings in the Department for Education about this body.

Sir Geoffrey said he had commissioned an internal report on the centre within three weeks of arriving at the department in January and had later called in outside consultants. Some criticisms of the financial system used at the centre had been made in the internal report. There was no question of fraud or impropriety.