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Academies funding error exposed as DfE publishes consultation

Many academy schools were overfunded by hundreds of thousands of pounds last year as a result of inaccurate government funding formulas, new research has found.
An investigation by the Financial Times has concluded that an average secondary school with 1,000 pupils, which converted to academy status at the start of 2010-11, would have received £118,000 more in public funding than an equivalent local authority-maintained school. Some schools may have received over £300,000 in extra funding, the newspaper said.
Schools that convert to academy status receive similar per pupil funding for teaching, but also get a grant to pay for the services no longer supplied by their local authority. The Department for Education (DfE) said the formula for calculating this grant is “flawed” and had caused the funding errors.
Education secretary Michael Gove outlined new measures that would be taken to improve the funding system following a consultation with local authorities, launched in July 2011.
From April 2012, funding allocations for academies will take account of “net expenditure on education services”, he said in a ministerial statement. Gove also announced that, in areas where some responsibilities remain with the local authority, the DfE will only use “a proportion” of council spend when working out the amount to be transferred.
In addition, a cap was announced on the maximum amount to be transferred from council budgets in 2012-13. This will be synchronised with cuts announced by the Department for Communities and Local Government.
Gove said this arrangement, while providing “financial certainty and stability” to local authorities, would also mean “that the government will continue to provide a considerable amount of double funding in this area”.

Posted on: 09/12/2011

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