Academies: Finance
Education
Stephen Timms (East Ham, Labour)
To ask the Secretary of State for Education how the amount top-sliced from local authorities' general funds for academies was calculated in 2012-13; what the link between funds taken and the number of academies in each local authority area was; and if he will make a statement.
Nick Gibb (Minister of State (Schools), Education; Bognor Regis and Littlehampton, Conservative)
holding answer
We announced in December 2010 that deductions would be made from Formula Grant in 2011-12 and 2012-13 to reflect the transfer of responsibilities from local authorities to academies. Local authorities receive Formula Grant on a per-pupil basis and until 2011-12 no reduction was made for pupils who were in academies. This meant that local authorities kept the same level of Formula Grant to fund services to schools even when they had fewer schools to support because one or more schools had converted to academy status.
At the time of the decision we were only able to make estimates about the growth in the number of academies at a national level, so reductions in local authority budgets were calculated on a pro-rata national basis. The top-slice was not therefore related to the current pattern of academy schools, nor did it reflect the pattern of growth in academy numbers which has subsequently taken place.
We have since announced that at the end of the 2012-13 financial year we will make a calculation of the number of pupils in academies in each local authority to determine the amount each local authority's budget should have been reduced by that year. Where the amount is less than the amount top-sliced from the local authority's budget, we will refund of the difference. There are a number of authorities where the top-slice was less than should have been deducted given the number of academies they have. To maintain stability in local authorities' budgets we have agreed not to seek to recoup this funding.