The dire state of funding for council-run schools in a county has been laid bare as education bosses predicted the majority of schools would be in financial deficit in three years.
Pressures including rising teachers’ salaries alongside static Government funding will see the proportion of schools unable to balance their books in North Yorkshire soar from 18 per cent last year to 60 per cent in 2020/21 unless radical changes are made, councillors have been told.
The projected number of schools in the county which would be forced to seek loans from the council reflects a trend across England. In the four years before 2016-17, the proportion of local authority secondary schools in deficit nearly trebled.
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However, the Tory-run council’s education boss, Councillor Patrick Mulligan, said the county was being particularly hard hit due to an unfair Government funding formula, which sees neighbouring urban areas such as Middlesbrough receive significantly higher funding per pupil.
He said the authority was lobbying the Government to give greater weight to cost-raising factors such as providing services across a vast rural area instead of the current focus on deprivation levels.
A report to the council’s leaders states the revised funding formula for schools, which was hailed by Tory MPs in the county last year, fails to meet pressures on schools budgets produced by the annual one per cent pay settlement for school staff alone.
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This is despite the announcement of £1.3bn extra Government funding for schools last year.
The report states the level of gains for North Yorkshire schools from the revised funding formula are “relatively small and are generally in line with inflation”.
It adds: “However, there are also a number of schools who are losers in the new formula and for these schools the level of losses are much greater than the increases benefitting the schools which are gaining in the new formula.”
Cllr Mulligan said while the financial pressures schools were facing were unprecedented, years of dwindling Government funding meant the authority could no longer bail schools out.
He said: “Every year of austerity we have managed to balance our budget, but there is only so much that can be cut, so it has really come home to roost this year. We have not had this on this scale before.”
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Cllr Mulligan said schools and the authority were taking a range of measures of cut spending, such as transport costs, and the council would intervene earlier at schools struggling financially, but schools needed to accept “cultural change was now needed”.
He said schools that fall into the red and rely on a loan from the council would face extra pressure after agreeing a repayment plan with the authority.
Cllr Mulligan said: “Schools are really coming face to face with the seriousness of the issue.”