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The government responds to the consultation on the financial transparency of LA maintained schools and academy trusts

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​At the end of 2019, the government consulted on proposals for the current academy transparency measures to be adapted and implemented across the maintained school sector which were intended to strengthen the arrangements for maintained schools.

NAHT was generally supportive of the proposals but stressed that any extra resource needed to support the new processes must be properly funded and that the impact on workload is fully considered.  You can read NAHT's full response to the consultation here (members will need to be logged in to access this link).   

The government has now confirmed they will be implementing the following proposals:

1.     From the start of 2020/21, the Department for Education will publish the names of local authorities (LAs) on gov.uk if they have missed three (or more) deadlines for returns to the Department.

2.     The following changes to the Dedicated Schools Grant (DSG) assurance statement return for the return for the financial year 2020-21 will be implemented:

  1. They will collect the number of schools with suspended budgets and notices of financial concern through the existing DSG assurance statement.
  2. They will add a new section to the DSG assurance statement that captures the amounts that LAs have recovered from investigating fraud.
  3. They will collect information on the number of recovery plans in each LA through the DSG annual assurance return from the CFO. 

3.     The Department will make it a requirement for maintained schools to provide LAs with three-year budget forecasts. Schools will be required to submit their forecasts between 1 May and 30 June of each year, starting in 2021-22.

4.     Schools will be required to append a list of related party transactions (RPTs) to their response to the question in the schools financial value standard (SFVS) about their arrangements for managing RPTs. Changes to the SFVS will be made for the 2021-22 return. 

5.     Schools will be required to submit a recovery plan to their maintaining authority when their deficit rises above 5%. This will apply when deficits are measured as at 31 March 2021.

6.     As of 1 January 2021, all LA maintained schools will be required to publish annually on their websites the number of individuals (if any) earning over £100K in £10K bandings.

7.     As of 1 January 2021, all LA maintained schools will be required to publish a link to the schools financial bench-marking website, to highlight the consistent financial reporting (CFR) statement of income, expenditure and balances.

8.     The government will formalise their approach to working with LAs. This could involve:

  1. Sharing published data on the school balances in each LA. 
  2. Using this data and evidence-based requests from LAs to ensure support is focused where it is needed. 
  3. Requesting high level action plans from LAs in which the number or proportion of school revenue deficits over 5% is above a certain level.

Following concerns raised, the government has decided not to a minimum three-year audit cycle requirement on schools.

To support LAs in implementing these changes, the Department will provide a grant to each LA based on the proportion of maintained schools they have. 

First published 21 August 2020