Derbyshire county council's £1m bill for paying off academy school debts

Derbyshire County Council maintains 326 out of the county’s 416 schools, nurseries and pupil referral units.

There are now 71 academy schools, with a further 19 going through the conversion process.

The county council is given money from central government to fund schools, but academies receive this funding directly and are independent of local authority control.

Due to this, academies also have more of a say over how that money is spent. On top of this they can alter the curriculum, opening hours, behaviour policies and staffing arrangements.

When schools either opt to become academies or are forced through the process by central government – which can happen if the school has several consecutive poor Ofsted ratings – it is the county council which must cater for any financial deficit.

Since 2014, these payouts have cost the authority more than £1 million.

This can typically be put down to unexpected staffing costs, a changing number of children in the school – some of which may have transferred during the academic year – or overspending on classroom resources.

A spokesperson for Derbyshire County Council said: “Department for Education rules require education authorities, such as the county council, to absorb the budget deficits schools have at the point that they convert to academy status if the conversion process is at the direction of the DfE following an Ofsted inspection.

“However, most schools are in surplus and are allowed to keep that surplus when they become an academy.

“If a school is projected to be in deficit, as well as supporting it financially the council will provide staff from the council’s Finance, HR and School Improvement departments to work with head teachers and governors to develop solutions for improving the school’s budget position.

“Since 2014, the total recorded deficit from schools in Derbyshire which have converted to academies has been just over £1 million.”

In February it was revealed that eight out of 10 UK academies are running on a deficit, although Department for Education figures showed that only 6.1 per cent of academy trusts – collections of academies – had a deficit.

Experts suggested that academy trusts are more capable of hitting the required economies of scale to avoid a financial shortfall, an issue which lone academies may struggle with.

The total debt among UK academy trusts is around £65 million.

However, it was also found that these academy trusts – many of which are run by businesses – have combined reserves of £2.5 billion.

Eddie Bisknell , Local Democracy Reporting Service