Overpaid academy schools must return £15m by July

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by Sarah
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Dozens of academies must return nearly £15m by July because of a government funding blunder, say accountants for some of the affected schools.

Allan Hickie, a partner at UHY Hacker Young said

'"The increase in the number academies meant the government agency responsible for allocating the funding was swamped by work and this led to some of the errors.

"Some schools may not yet know they have a problem. It all depends whether their business manager has noticed they have been overpaid."

Mr Hickie added that schools with tight cash flow could be seriously affected by having to pay back the money which could amount to 10% of their budget.

He said his firm was acting for one primary school that had been overfunded by £190,000, a sum that could pay for five teachers.

This particular school only became an academy last summer.'

It's becoming increasingly clear that the arrangements for funding academies and monitoring their financial performance is woefully inadequate and can only get worse as academy numbers increase.
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Janet Downs's picture
Mon, 07/05/2012 - 14:07

The Association of School and College Leaders (ASCL) told TES (link below) that the way academies were funded was based on a model which worked when there were just a few academies but was now no longer fit for purpose. The ASCL said the Young People's Learning Agency (YPLA, now defunct) could not be blamed for using this funding model.

However, the Government can. It should have put in place a proper way of funding academies before pushing the Academies Act through Parliament. This problem should have been anticipated. It was not until spring in 2011 that the DfE recognised that the system of funding academies was unsustainable (see second link below). That's not much comfort for the academies which will have to pay back an average of £117,689 before the end of August.

http://www.tes.co.uk/article.aspx?storycode=6219914

http://www.localschoolsnetwork.org.uk/2011/04/current-system-of-funding-...

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