Academy Money to be Returned to Councils

It has been revealed that just under £60 mill is set to be returned to local councils, after some threatened to seek a judicial review of the amount of money the government had taken away in order to expand its academies programme.

Previously, the government had opted to deduct a uniform amount from each local authority to reflect growth in academies – which were financed directly by the government rather than local authorities – and it has been estimated that a total of £413 million was cut from local authority funding over a two year period.

However, some areas saw a lower number of schools seeking academy status, and the taking of a uniform figure left them out of pocket.

Now, the government have confirmed within a written statement which was released earlier this week, that they would refund any local council “where the amount deducted from formula grant for 2011 – 2012 and 2012 – 2013 was greater than it would have been had the deduction been based on the number of pupils in academies in that authority over each of the two financial years”.

The statement from the government has also clarified that in instances where too little money had been deducted in relation to the number of academies, no additional cash would be clawed back, adding “this is in order to maintain stability in local authority budgets.”

For schools who are considering academy status, but are concerned about the financial implications, or who require assistance with producing budgets and financial information, the accountancy team at Milsted Langdon can assist.

As an accountant, Gill Freeman specialises within academy finances and charity tax.

Posted in News.