From 2013/14, all academies will receive per-pupil funding for insurance as part of their general annual grant (GAG). This will either be an amount delegated by the local authority through local funding formulae, or an additional top-up grant of £20 per pupil.
The per pupil funding will reflect the fact that, on average, insurance premiums are higher for academies than they are for maintained schools, while the top-up grant is estimated to be around £25 per pupil on average.
To assist academies, the Department for Eduction (DfE) has worked with the Crescent Purchasing Consortium (CPC) to provide a route to the insurance market which offers best value for money. Many academies and multi-academy trusts have already been successful in bringing costs down through competition.
The DfE recognises that there could be some academies in specific and exceptional circumstances that may struggle to pay for their insurance premium from their 2013/14 GAG.
Conseuently, since it wants to make sure that these academies can cover the cost of their insurance, it will therefore be offering the possibility for academies to apply for additional funding if they are unable to meet the costs of securing adequate insurance cover for 2013/14 from the total funding provided to them in their GAG.
Academies will be able to apply for this additional funding from 1 September 2013 by submitting a form to the Education Funding Agency and will need to confirm that they have been through the CPC or have secured three competitive quotes.
They will also need to set out the amount of funding that they are applying for, taking into account the funding that has already been provided through GAG.
As an accountant, Gill Freeman specialises within academy finances and charity tax.