Latest Public Sector News

27.08.14

LGA highlights £1bn shortfall in new school places funding

Councils have been using funds from their own ‘tightly squeezed’ budgets to fill a £1bn shortfall in funding for new school places, the Local Government Association (LGA) has warned.

Three-quarters of councils who responded to a LGA survey said they did not receive enough government funds to create the new school places needed between the five year period, 2011-2016. In order to plug the £1bn ‘black hole’, councils have had to borrow money, abandon other projects and cut back on school maintenance.

The LGA asked councils if cash provided by the Department for Education (DfE) had met the full cost of providing school places between 2011-12 and 2016-17. Yet some 77% of respondents said the money had not been enough. Additionally, 38% reported borrowing money, 67% used money from developers, 22% took money from building programmes and 50% took funds from other school capital programmes, such as school maintenance.

Changing demographics and increased birth-rate, particularly in areas of London and the south east, have contributed to the rising pressure for more school places, it has been reported.

Cllr David Simmonds, chairman of the LGA's Children and Young People's Board, said: “Mums and dads expect their child to be able to get a place at a good local school and this research shows councils are delivering, but at a cost.

“Since the pressure on places first emerged, councils have been getting on with the job of creating more, and welcome though government funding is, it is nothing like the full cost.”

He added that this “research lays bare the financial impact on councils of providing school places, which stands at more than £1bn over a five-year period”.

Last year, councils created an additional 90,000 primary places, but LGA analysis revealed a further 130,000 would still be needed by 2017-18, while 80,716 new secondary places will be needed by 2019-2020.

The funding warning from councils also comes as the Netmums website says that some parents are concerned about the adverse impact of the squeeze on places.

But a DfE spokeswoman said, in line with the government’s education plan, the department is “giving councils £5bn to spend on new school places over this parliament”, leading to “the creation of 260,000 new places in shortage areas”.

The Department also says it has already confirmed a further £2.35bn to support councils to create the needed places by September 2017.

The DfE spokeswoman added: “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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