Schools told to use or lose savings (From Worcester News)

Schools told to use or lose savings

10:07am Tuesday 16th October 2007 in News By Alicia Kelly, @aliciakellyWN #worcsnews

HEADTEACHERS in Worcestershire have criticised plans to tax schools if they have money left over in their budgets.

The Government wants to impose a levy on the cash that schools save from the revenue they get for a particular year.

If it goes ahead, secondary schools would be allowed to keep five per cent of their funding in reserve and primary schools eight per cent.

But five per cent of any savings above that threshold would be taken from them and redistributed to other schools.

Local councils can already take money from a school's reserves but the new idea would make it an automatic tax - even if the school had plans for the cash.

The Department for Children, Schools and Families (DCSF) say it is necessary because money should be spent on the children of that year - not put in the bank to gain interest.

Last year, schools nationally did not spend £1.6 billion of the money they were given.

Some Worcestershire headteachers called the idea unfair, particularly as it could be backdated to the 06/07 financial year.

Blessed Edward Oldcorne Catholic College head Sean Devlin said he was unhappy that his school could have to give £16,500 to schools who were in deficit.

He said: "You can't say good financial management in some schools should reward bad financial management in others. Some people will say we are given the money for the children of that year but if we do that we would end up teaching in dilapidated buildings. Like at home, you put a bit aside. It's good housekeeping."

Droitwich High School head Allan Fowlds said: "In terms of a tax or, if you like, a fine on schools, this in most cases will be completely inappropriate."

He believes surplus figures can be misleading as excess cash is often planned to be spent elsewhere.

Pershore High School head Clive Corbett said his school would be forced to give away money they had saved for IT equipment and believes the levy will encourage schools to overspend.

He said: "To be penalised for that kind of prudence and careful planning, I was really quite astonished."

MP Peter Luff also condemned a "wicked" policy: "It won't be so bad for well-funded schools, but Worcestershire schools are at the bottom of the funding tables. They have to save for things othes take for granted."

However, Worcester MP Mike Foster called for the money to be redistributed to the feeder primary schools for the ailing Elgar High.

A DCSF spokeswoman said there was extra cash available for capital projects.

She said: "The five per cent redistribution will recycle cash to schools within a local authority area, decided by local headteachers' forums on the basis of local needs and priorities."

A decision will be taken after consultation closes on Friday, October 26.