Sector leaders dismayed over plans to cut 400m from councils to fund academies

Currently, the Department for Education (DfE) gives academies money from its central resources budget to help them run the services that councils provide for maintained schools.

But the government has decided to start raising part of this cash for academies by cutting the "formula grant" it gives to local authorities – by £148m in 2011/12 and £265m in 2012/13.

A spokesman for the DfE said: "It is not possible to say precisely which schools in which local authorities will convert to academy status."

This, he said, means the £400m cash has to be "top-sliced" from all council budgets – regardless of how many academies are in an area.

But John Chowcat, general secretary of the children’s services union Aspect, argued that the cuts could lead to a reduction in the availability of support services for all schools.

"Lots of schools are already ringing local authorities about support that’s no longer available," he explained. "They just don’t get it anymore. They weren’t expecting these services to be switched off.

"This will add to the strong feeling within local authorities that essential support services for maintained schools are simply being eroded. Many authorities are already drawing up plans for additional redundancies in key school support services."

Matt Dunkley, vice-president of the Association of Directors of Children’s Services, said directors around the country would be negotiating with colleagues in other council departments to try and limit the impact of this cut on children’s services.

"The academies top-slice is a further cut to local authority funding that was unexpected in its timing and size, and opaque in terms of the methodology used to calculate it," he explained. "It also compounds the problem associated with the front-loading of cuts to local authority funding in general."

He added that the DfE has confirmed that it will not refund cash to local authorities if fewer schools than anticipated become academies.

"It is unclear how the top-slice relates to the number of academies the local authority has, or the number which may come through during the year," he said. "Clearly the loss of funding is impacting on all local authorities and does not relate to any loss of function or responsibility."

Support services for academies covered by the "top-slice" funding include school improvement, education welfare, therapies and other health-related services and visual and performing arts.