Because academies operate outside local authority control, they receive money from central government to run the services that councils provide for maintained schools. Such services include school improvement and pupil support.
The Department for Education (DfE) had until now paid this money to academies out of its central resources budget.
But government has decided to start raising some of this cash by cutting the so-called "formula grant" that it gives to councils – to the tune of £148m in 2011/12 and £265m in 2012/13.
Since the government is unsure of how many schools will convert to academy status over the next few years, the cash is being taken from all councils regardless of how many academies are in their area.
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