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Schools surpluses could face levy School surpluses could face levy
(about 3 hours later)
Ministers are proposing a levy on the £1.6bn schools in England have left at the end of the financial year.Ministers are proposing a levy on the £1.6bn schools in England have left at the end of the financial year.
They are suggesting 5%, or about £75m a year, should be clawed back and "recycled for wider use by schools".They are suggesting 5%, or about £75m a year, should be clawed back and "recycled for wider use by schools".
The idea, in a consultation on funding arrangements for 2008-11, has been made even though "excessive" balances have fallen in the past five years.The idea, in a consultation on funding arrangements for 2008-11, has been made even though "excessive" balances have fallen in the past five years.
Head teachers say schools should not be penalised for building up balances to cover planned education projects.Head teachers say schools should not be penalised for building up balances to cover planned education projects.
The Department for Education and Skills says that over the past seven years total surpluses have more than doubled, so that at the end of 2005-06 almost £1.6bn was held in school bank accounts.The Department for Education and Skills says that over the past seven years total surpluses have more than doubled, so that at the end of 2005-06 almost £1.6bn was held in school bank accounts.
The average surplus for primary schools was more than £58,000 and for secondary schools was £225,000 - up 64% and 106% respectively since 1999-2000.The average surplus for primary schools was more than £58,000 and for secondary schools was £225,000 - up 64% and 106% respectively since 1999-2000.
'Awful lot''Awful lot'
Schools Minister Jim Knight said he wanted head teachers to spend the cash they were given.Schools Minister Jim Knight said he wanted head teachers to spend the cash they were given.
As there are about 23,000 schools in England, the total of their end-of-year balances always adds up to a large figure Head teacher Malcolm Trobe "We give them money to invest in education, not to put in the bank," he said.As there are about 23,000 schools in England, the total of their end-of-year balances always adds up to a large figure Head teacher Malcolm Trobe "We give them money to invest in education, not to put in the bank," he said.
"When it gets to the scale of £1.6bn we have to ask some questions. That's an awful lot of money.""When it gets to the scale of £1.6bn we have to ask some questions. That's an awful lot of money."
His department defines excessive balances as more than 8% in primaries and 5% in secondaries, but is also proposing to lower those thresholds.His department defines excessive balances as more than 8% in primaries and 5% in secondaries, but is also proposing to lower those thresholds.
It said there were fewer schools holding them in 2005-06 than five years previously, but 17% had retained theirs throughout that time.It said there were fewer schools holding them in 2005-06 than five years previously, but 17% had retained theirs throughout that time.
"We accept that many schools hold surpluses for legitimate reasons; but for others it is less transparent, and the increase in overall balances is a legitimate cause for concern amongst other schools, local authorities and central government," says the consultation document."We accept that many schools hold surpluses for legitimate reasons; but for others it is less transparent, and the increase in overall balances is a legitimate cause for concern amongst other schools, local authorities and central government," says the consultation document.
It has already made it mandatory for all local authority schemes for financing schools to include a control mechanism so they can to claw back "excessive and uncommitted balances" from schools.It has already made it mandatory for all local authority schemes for financing schools to include a control mechanism so they can to claw back "excessive and uncommitted balances" from schools.
Along with the 5% levy, it is proposing stronger guidance about holding balances.Along with the 5% levy, it is proposing stronger guidance about holding balances.
The redistribution of any funds would be a matter for local schools forums.
'Misinterpreted''Misinterpreted'
The Association of School and College Leaders said it regarded it as good practice for schools to carry over a small amount.The Association of School and College Leaders said it regarded it as good practice for schools to carry over a small amount.
Its president, Malcolm Trobe, said: "As there are about 23,000 schools in England, the total of their end-of-year balances always adds up to a large figure.Its president, Malcolm Trobe, said: "As there are about 23,000 schools in England, the total of their end-of-year balances always adds up to a large figure.
"This can be misinterpreted as schools 'holding on to' large sums of money. The reality is very different at individual school level.""This can be misinterpreted as schools 'holding on to' large sums of money. The reality is very different at individual school level."
A scrutiny of individual budgets would show not only careful planning and budget management but also a drive to achieve value for money, he said.A scrutiny of individual budgets would show not only careful planning and budget management but also a drive to achieve value for money, he said.
"Schools should not be penalised if they have a significant balance when it is part of their planned expenditure programme to deliver the best education for their students.""Schools should not be penalised if they have a significant balance when it is part of their planned expenditure programme to deliver the best education for their students."
The National Association of Head Teachers, which has a majority of members in primary schools, said attempting to cut surpluses already committed to projects would be unacceptable.The National Association of Head Teachers, which has a majority of members in primary schools, said attempting to cut surpluses already committed to projects would be unacceptable.
General secretary Mick Brookes said: "We will oppose any attempt to impose a 5% levy on committed balances. That would be totally unfair."General secretary Mick Brookes said: "We will oppose any attempt to impose a 5% levy on committed balances. That would be totally unfair."
Shadow education secretary David Willetts said: "When Gordon Brown gives extra funding to head teachers it usually has strings attached: now it has an elastic band attached so he can pull it back out of their pockets again."Shadow education secretary David Willetts said: "When Gordon Brown gives extra funding to head teachers it usually has strings attached: now it has an elastic band attached so he can pull it back out of their pockets again."