Views sought on transparency in local authority schools

6 August 2019

Should some of the financial measures used in academies be applied to schools run by local authorities?

This is the issue on which the Department for Education (DfE) is seeking views in a consultation which is open until 30 September.

The consultation document sets out proposals for financial reporting measures that currently apply to academy trusts to be adopted by local authority maintained schools, with the aim of strengthening their transparency and financial health.

Arguing that an unprecedented level of accountability and transparency has been brought into academy finances, allowing financial mismanagement to be quickly identified, Academies Minister Lord Agnew said that the proposed change would help ensure consistency across the entire state-funded education system.

Academy trusts already face requirements to publish their annual accounts, declare or seek approval for related party transactions and report on high pay for executive staff.

The proposed changes follow an analysis of data from 2016 to 2018, which showed that a larger percentage of maintained schools in England had an accumulated deficit compared to academy trusts. The rise in 2017-18 continued to be higher in maintained schools.

According to the DfE, the current measures used in academies presents a strong case for adapting and implementing them across the maintained schools sector.

That, it says, will help strengthen arrangements for maintained schools and reduce the future likelihood of growing deficits or misuse of funds in them.

The Department also points out that it will be considering how any new arrangements might create additional burdens, with the benefits of any new changes introduced for transparency measures being required to outweigh any negative impacts on local authorities and schools.

The consultation can be found at consult.education.gov.uk.