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News - 16 March 2014

Heads warn of budget crisis

Early in March, the Schools Minister, David Laws, announced that schools in England will receive an extra £350m in 2015-16.

However, the Association of School and College Leaders (ASCL) says the increase will be swallowed up by rises in pension contributions and salaries.

The Department for Education says schools are now "well positioned" to pay higher pension contributions.

The ASCL describes the result for school budgets as "catastrophic". They say that schools have faced "four years of static or falling funding, coupled with rising costs", which has meant a loss in real terms of over 45%. Of the extra £350m promised the ASCL calculates that pension contributions and likely salary increases would cost schools £340m.

The ASCL deputy general secretary, Malcolm Trobe, praised some aspects of yesterday's announcement by Mr Laws, but said any good news was "completely overshadowed" by the increase in pension contributions.

Tonmoy Kumar, Manager of the Accounts Department of ABDS and an active school governor comments:
“On the one hand, the cash injection can be seen as a great help, but, if it is swallowed up by pension contributions, the lack of funding may well result in larger class sizes and or reduced curriculum choice.”

A Department for Education spokesman said the announced budget would remove "the historic unfairness of the funding system", and was the "biggest step toward fairer funding in a decade".

If you need any help and advice with Free Schools, Academy Schools or Charities, contact Lavinia Newman or Peter Ham now to discuss how ABDS can help bring their experience to these matters.

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail: abds@netaccountants.net

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