What the audit commission says about school finance

Every now and then the Audit Commission takes a look at school finances.  A few years ago it attacked the government for its insanely complex method of funding schools through so many different funds.   This time it has gone down a different route arguing

a) Some money is being horded rather than spent

b) Schools are wasting money by not shopping around enough.

Michael O’Higgins, chairman of the Audit Commission, said: “Schools are not wasting money deliberately, but I don’t think the focus has been enough on economy and efficiency. The focus has been the drive to raise standards – that’s not incompatible with economy and efficiency, but if you take your eye off the ball you lose that focus.”

The report concludes that despite record increases in funding since 1997, when Labour came to power, headteachers have not put all the money to good use. They could save £415m if they negotiated better contracts for the running of their schools and are also sitting on £530m in “excessive” reserves. There has been a collective failure through the system – from schools right up to government level – to emphasise efficiency, the report will say. “If no one is asking ‘could you do this more efficiently, more cheaply?’, you’re not going to be focused on it,” O’Higgins said.

“Individual schools have taken their eye off the ball. If you’ve had resources pumped in, you might not be aware of the last 1% you could be saving. Given the tight financial forecasts, they are going to have to [be aware].”

The report asks the government to consult over methods to redistribute school budgets if it isn’t being spent.   Some councils already claw back money.  

It also suggests that Ofsted should scrutinise schools’ finances more closely during inspections.  The reverse could hardly be possible since Ofsted inspectors generally do little in terms of admin and funds.  Indeed during several of the most famous cases of school fraud Ofsted inspected the school in question and found its accounts and finances to be robust.   When I challenged Ofsted on this four years ago, I got back a short email saying “we are inspectors, not auditors”.

Vernon Coaker, the schools minister, said the government expected “local authorities to take action where necessary to ensure … proper value for money.”

Tony

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