Financial News

  • 28 August 2014, 4:36

Schools Divert Cash To Cover 1bn Funding Gap

A 1bn shortfall in funding for places is forcing many schools to borrow money as well as cut back on repairs and building projects, according to a new poll.

More than three quarters of authorities in England claim they have not received enough cash from the Government to create the extra school places needed by 2017.

The research by the Local Government Association (LGA) is released as concern grows about a squeeze on school places fuelled in part by a rising birth rate and changes in local populations.

Councillor David Simmonds, chairman of the LGA's children and young people's board, said: "The scale of this black hole is such that the cost of the creation of new school places cannot be met by council taxpayers.

"The lack of school places is no longer confined to primary schools but is spreading to secondary schools, and across the country we estimate more than 200,000 places will be needed.

"Councils face a challenge to create places on time and in the right areas, in a climate where they are also short of money to do so."

Local councils were asked by the LGA if money provided by the Department for Education (DfE) had fully met the cost of providing school places between 2011/12 and 2016/17.

Of those that responded - around 79 councils - a total of 77% said the funding had not been enough.

More than a third (38%) of the councils who said they did not receive enough funding said they had borrowed money, two thirds (67%) used money from developers, over a fifth (22%) took funds from other building programmes and half (50%) used cash from other school projects, such as school building maintenance, the LGA said.

The LGA claims 130,000 new places will be needed by 2017/18, along with 80,716 new secondary places by 2019/2020.

A DfE spokeswoman said: "We are making every effort to stop an unprecedented increase in pupil numbers affecting class sizes, and councils have a legal duty to provide school places for children in their area.

"We have also confirmed a further 2.35bn to support councils to create the places needed by September 2017.

"In addition we are allowing good schools to expand without the restrictions and bureaucracy they faced in the past.

"And there are now more than 320 free schools open or in the pipeline which will provide a further 175,000 places - the vast majority of which are in areas of need."

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