Checks on school spending must be stronger, MPs warn

Neil Puffett
Friday, May 11, 2012

An influential group of MPs has warned that systems for monitoring schools spending in England are not up to scratch.

MPs have raised concerns about how money is spent by schools. Image: Tom Campbell
MPs have raised concerns about how money is spent by schools. Image: Tom Campbell

The Public Accounts Committee said the Department for Education (DfE) needs to improve its understanding of poor financial management in schools, so it can decide when and how to intervene.

In a report on the matter, the committee said it is “alarmed" by "worrying expenditure by some schools”.

Such expenditure included “very high salaries” being paid to senior staff in academies, and “excessive” expense payments for governors.

The committee said the situation could be symptomatic of inadequate controls on how money is spent across the whole schools system.

Labour MP Margaret Hodge, who chairs the committee, called on the DfE to improve accountability on its spending, given that education and children's services are becoming increasingly devolved.

“One in four Local authorities have cut their resources devoted to monitoring school spending," she said.

“Many governing bodies remain too weak with one in four local authorities stating that only a few of their primary schools enjoyed governing bodies with sufficient, appropriate financial expertise.

“And there is a question mark over whether the Education Funding Agency will have the capacity and skilled staff to oversee the growing number of academies.

“We are already seeing instances where the Agency’s systems have proved insufficiently robust to ensure proper value for money of schools’ expenditure."

Chris Keates, general secretary of teaching union NASUWT, said the consequences of the government's drive for school autonomy are becoming evident.

"The Secretary of State [Michael Gove] recklessly has swept aside key financial safeguards, including abolishing financial management standards, removing the requirement for schools to secure best value for public money and diminishing the role of local authorities in securing good financial management practices in schools,” she said.

Christine Blower, general secretary of the National Union of Teachers, argued that academies should be made subject to the same financial reporting framework as maintained schools. 

“The DfE is removing local authorities’ ability to support schools in managing their budgets and to ensure accountability and probity,” she said.

“All schools including academies should be working within a consistent and democratically accountable locally-based framework.”

A DfE spokesperson said: ??“We are publishing more data on how schools spend their money than ever before along with more data on how they perform.

"This will improve accountability for all schools. Local authorities are statutorily responsible for ensuring effective financial management in their schools and we are strengthening arrangements for the assurances they provide us with.

"Academies have more rigorous financial systems in place than maintained schools, and have a statutory requirement to produce independently audited annual accounts."


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