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U-turn on school surplus clawback U-turn on school surplus clawback
(about 1 hour later)
The government has dropped plans to have councils claw back budget surpluses from schools in England.The government has dropped plans to have councils claw back budget surpluses from schools in England.
Ministers had proposed a 5% levy on excess cash held by schools - said to total £1.7bn - backdated to March.Ministers had proposed a 5% levy on excess cash held by schools - said to total £1.7bn - backdated to March.
The move, put out for consultation in March and confirmed in June, angered many head teachers, whose cause was taken up by Tory leader David Cameron.The move, put out for consultation in March and confirmed in June, angered many head teachers, whose cause was taken up by Tory leader David Cameron.
Now ministers have dropped the plan - but warn they may act in future if excessive surpluses are not reduced.Now ministers have dropped the plan - but warn they may act in future if excessive surpluses are not reduced.
The Department for Children, Schools and Families defines an "excessive" balance as more than 5% of the budget for a secondary school and more than 8% for a primary or special school, after taking into account money committed to specific projects.The Department for Children, Schools and Families defines an "excessive" balance as more than 5% of the budget for a secondary school and more than 8% for a primary or special school, after taking into account money committed to specific projects.
The proposals however would have applied to all schools with a surplus at the end of the financial year, however small.The proposals however would have applied to all schools with a surplus at the end of the financial year, however small.
The local authority would have taken 5% of all these surpluses then shared out the resulting pot.The local authority would have taken 5% of all these surpluses then shared out the resulting pot.
Challenging Gordon Brown on the issue at Prime Minister's Questions last week, Mr Cameron said: "Why do you think you know best how to spend this money, rather than the head teachers?"Challenging Gordon Brown on the issue at Prime Minister's Questions last week, Mr Cameron said: "Why do you think you know best how to spend this money, rather than the head teachers?"
Education minister Jim Knight had suggested the retrospective element of the move alone might be dropped.Education minister Jim Knight had suggested the retrospective element of the move alone might be dropped.
This aspect had caused particular annoyance, because it could have meant schools being penalised for having had a surplus months ago even if they had since spent it.This aspect had caused particular annoyance, because it could have meant schools being penalised for having had a surplus months ago even if they had since spent it.
ConcernsConcerns
In a statement to the Commons, Mr Knight has now said his department was "absolutely right" to take action when the net revenue surplus in school balances had more than doubled since 2000.In a statement to the Commons, Mr Knight has now said his department was "absolutely right" to take action when the net revenue surplus in school balances had more than doubled since 2000.
"This revenue funding should be spent on today's children," he said."This revenue funding should be spent on today's children," he said.
But he added: "I recognise schools' concerns raised during the consultation. These included the retrospective use of end of year 2006-07 balances to redistribute a small proportion of those surpluses to other schools in 2008-09.But he added: "I recognise schools' concerns raised during the consultation. These included the retrospective use of end of year 2006-07 balances to redistribute a small proportion of those surpluses to other schools in 2008-09.
"I've listened carefully to that concern and I've ruled out any such retrospective proposal.""I've listened carefully to that concern and I've ruled out any such retrospective proposal."
He said schools were also concerned the proposal would apply to all revenue surplus balances - and could include the proceeds of fundraising by parents and others, as well as small amounts prudently carried forward from one year to the next.He said schools were also concerned the proposal would apply to all revenue surplus balances - and could include the proceeds of fundraising by parents and others, as well as small amounts prudently carried forward from one year to the next.
"These are all reasonable concerns that require further investigation," he said."These are all reasonable concerns that require further investigation," he said.
"I have listened carefully, based on the responses from a range of stakeholders, and rather than proceed now we will continue to discuss these detailed concerns with schools and work with local authorities to lower excessive surplus revenue balances.""I have listened carefully, based on the responses from a range of stakeholders, and rather than proceed now we will continue to discuss these detailed concerns with schools and work with local authorities to lower excessive surplus revenue balances."
'Scandalous' 'Disappointing'
He warned: "My department will continue to monitor the overall level of surplus balances during the forthcoming spending review period.He warned: "My department will continue to monitor the overall level of surplus balances during the forthcoming spending review period.
"If the levels reported do not show a significant reduction we will come forward with further action, having resolved the technical issues, for implementation during the following spending review period.""If the levels reported do not show a significant reduction we will come forward with further action, having resolved the technical issues, for implementation during the following spending review period."
One teachers' union, the NASUWT - which has been complaining about surpluses for years - had urged Schools Secretary Ed Balls to hold his nerve.One teachers' union, the NASUWT - which has been complaining about surpluses for years - had urged Schools Secretary Ed Balls to hold his nerve.
General secretary Chris Keates wrote to him: "The amounts of under-spend in some schools are not the prudent financial management some would claim but the unacceptable stockpiling of public money with the associated deprivation of youngsters of their full, in-year, per capita entitlements. General secretary Chris Keates said it was "extremely disappointing" the government was putting off tackling the issue.
"Some of the amounts border on being scandalous, particularly when some of the schools are failing to implement contractual changes, placing expectations on teachers to undertake additional responsibilities without payment and denying support staff their appropriate pay and grading." "This was never going to be a universally popular move and vociferous discontent from those with vested interests could have been anticipated," she said.
"Parents should now be asking why a situation has been allowed to develop where their children could actually leave their primary or secondary school without ever having received their full funding entitlement."
She added: "The NASUWT has been monitoring unspent balances for nearly twenty years and the problem has increased with each passing year.
"Monitoring doesn?t improve things anymore than measuring a child makes it grow."