Schools: Finance

(asked on 16th December 2021) - View Source

Question to the Department for Education:

To ask the Secretary of State for Education, what guidance he provides to (a) primary and (b) secondary schools on the level of financial reserves that schools should have; what guidance his Department provides on the purposes for which schools can draw down on those reserves; and what the timescale are over which reserves should be rebuilt when below the recommended level.


Answered by
Robin Walker Portrait
Robin Walker
This question was answered on 10th January 2022

The department trusts schools to manage their own finances, and we do not produce guidance on what is an adequate reserve level for academy trusts or schools. The amount of reserves that is appropriate to set aside will depend on the type and size of the academy trust or school as well as the particular risks that they face.

Academy trusts and schools have the flexibility to make their own decisions on how to prioritise their spending to invest in a range of resources and activities that will best support their staff and pupils. They can draw on their reserves for a range of planned and sensible reasons, for example, to spend on capital projects.

Academy trusts are directly accountable to the department for their financial management. Any academy trust reporting a cumulative deficit must agree a recovery plan with the Education and Skills Funding Agency to put the trust back on a financially sustainable path.

Local authority maintained schools are accountable to their local authority for their financial management.

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