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Council budgets are plugging a national 'black hole' of at least £1 billion in school places funding, town hall leaders are warning.

Research reveals councils have abandoned building projects, cut back on school maintenance and borrowed money in order to pay for a school place for every child.

New LGA research released yesterday shows more than three-quarters of councils who responded to an LGA survey did not receive enough Government money to create the extra school places needed in their area between 2011/12 and 2016/17. To make sure no child has been left without a place, councils borrowed money, used cash earmarked for other building programmes or created places with money intended to be spent on renovating crumbling school buildings and classrooms.

The LGA research lays bare the scale of the problem in funding for school places, which council leaders say is too big to be effectively funded at a local level. Instead, councils are calling for Government to fully fund this national black hole. The LGA is also calling for the Government to hand back the full set of powers needed to fulfil this statutory duty.

In some areas of England, particularly in London and the Southeast, changing demographics and an increased birth rate have led to particular pressures on school places.

Last year, councils created an additional 90,000 primary places, but LGA analysis revealed a further 130,000 would still be needed by 2017/18, while 80,716 new secondary places will be needed by 2019/2020.

Going to extraordinary lengths to ensure there is a place for every child, councils have added extra classes, using temporary buildings and in one case even put a playground on a roof.

Through collaboration with all schools in the area councils have created thousands of school places, but more are still needed.

The LGA asked councils if cash provided by the Department for Education had met the full cost of providing school places between 2011/12 and 2016/17. Some 77 per cent of respondents said the money had not been enough. These councils got money from a range of sources including:

• 38 per cent borrowed money

• 67 per cent used money from developers

• 22 per cent took money from other building programmes

• 50 per cent used cash from other school capital programmes, such as school building maintenance.

Individual authority breakdowns include:

• The London Borough of Ealing has added £129 million to its Government funding for school places. This includes £114 million from prudential borrowing, £11 million of funding from other capital budgets and £4 million from partnership, Section 106 and revenue funding.

• The London Borough of Hillingdon has added £114 million to its government funding for school places: £92.9 million from prudential borrowing and £21.7 million from developers.

• The London Borough of Barnet has added £70.87 million to its Government funding for school places.

• One council has added £125 million to its Government funding for school places, with additional funding from capital receipts, prudential borrowing, developers, diverting capital from other capital programmes and from the revenue account.

• One local authority in the north has added £81.5 million to its Government funding for school places.

Cllr David Simmonds, Chairman of the LGA's Children and Young People's Board, said:

"Mums and dads expect their child to be able to get a place at a good local school and this research shows councils are delivering, but at a cost. Since the pressure on places first emerged, councils have been getting on with the job of creating more, and welcome though Government funding is, it is nothing like the full cost.

"This research lays bare the financial impact on councils of providing school places, which stands at more than £1 billion over a five-year period.

"The scale of this black hole is such that the cost of the creation of new school places cannot be met by council taxpayers. The underfunding of free school meals pales in comparison to this but both show that Government's rhetoric must be matched by its chequebook, rather than leaving local authorities to pick up the tab.

"The lack of school places is no longer confined to primary schools but is spreading to secondary schools, and across the country we estimate more than 200,000 places will be needed.

"Councils face a challenge to create places on time and in the right areas, in a climate where they are also short of money to do so. Additionally, much of the decision making about new school places rests in the hands of the Government, whose funding for school places came too late. As a consequence, councils are carrying a billion pounds worth of costs which has come from other areas.

"The Government should budget for enough money to ensure something as vitally important as providing school places is not funded from other areas. This is an investment in the future which will benefit us all."

The LGA is also calling for: councils to be given a single capital 'pot', with an indicative five-year allocation to mirror the next Parliament, to enable councils to plan creating school places effectively; councils to be given the powers to create new schools and work locally to find the best academy provider, if this is the preferred choice, and to be given a greater role in judging and approving free school proposals.

In December, the Government committed £2.35 billion to provide places up to 2017, but local authorities still face problems because there is not enough money to fund them or not enough space available to build. Government figures estimate the cost of providing a single place is £15,430.

As well as having to pay for new school places, councils have to pick up the cost of additional work, such as removal of asbestos, when the Education Funding Agency pays for new buildings under the Priority Schools Building Programme, which does not cover the full cost of works.

The shortfall in money provided for school places comes as the Government has pledged more than £1 billion in funding for free school meals for infant children. Last week, LGA research found capital funded from government to build kitchens was at least £25 million short.

Notes to editors

The LGA conducted an online survey of chief finance officers in the 150 single and upper-tier English councils in LGA membership. The survey was open between 20 June 2014 and 6 August 2014, achieving an overall response rate of 53 per cent.

A full report will be published in September.

1. Cllr David Simmonds was available for interviews

2. The full set of data is available on request.

3. The LGA's survey found:

   • 77 per cent of respondents have not received from the Department for Education the full cost of providing the new school places needed in their authority area between 2011/12 and 2016/17.

   • The total amount of money survey respondents reported they were short by was £1,062,086,377. The total shortfall across England is likely to be higher.

4. School places data – method note

   • In December 2013, the Government announced £1.235 billion in funding for universal infant free school meals (UIFSM). This was comprised of revenue funding of £450 million in 2014/15 and £635 million in 2015/16, which was new money into the Department for Education, and £150 million of capital funding to ensure schools can build new kitchens or increase dining capacity, of which £70 million was new money from the Treasury and £80 million was from unspent DfE maintenance budgets.

     www.gov.uk/government/news/nick-clegg-announces-funding-details-for-free-school-meals

Contact

Ruth Pott-Negrine, Senior Media Relations Officer
Local Government Association
Telephone: 020 7664 3351
Mobile: 07979 803158
Media Office (for out-of-hours contact) 020 7664 3333
Email: ruth.pott-negrine@local.gov.uk
Local Government House, Smith Square, London SW1P 3HZ

www.local.gov.uk