LGA - Councils' potential £320 million bill to convert schools to academies

26 Sep 2016 04:33 PM

New figures released last week reveal that the potential cost to council taxpayers of converting all schools to academies is £320 million, with an additional loss of £80 million every year in business rates income.

The Local Government Association (LGA), which represents councils across England, surveyed its members during the summer to find out the potential cost of the Government's proposed plans, unveiling significant one-off and ongoing costs to council taxpayers.

The Government has yet to outline exactly how it wants to see all schools convert to academy status but continues to stress that its ambition remains for them all to do so. Over recent weeks, government has indicated that Multi-Academy Trusts are its preferred model.

Based on data from councils, the LGA estimates that this "sponsored" method could leave councils with up to a £320 million bill. If schools were to use the "converter" method, in which they operate as a stand-alone organisation, the cost to councils could be £120 million.

Where a school converts by the sponsored method, any debt built up by that school generally remains with the council, whereas with the converter method, this is not always the case. However, either method could still leave councils paying significant sums, in particular for legal services.

Both one-off figures will also be in addition to an annual loss of £80 million in business rates for councils since academies receive an 80 per cent business rates relief.

Councillor Richard Watts, Chair of the LGA's Children and Young People Board, said:

"If all schools are encouraged to become academies at some point, this will have significant financial implications for councils.

"We have remained strong in our opposition to all forced academisation, and this opposition has been echoed by MPs, teachers and parents. Recent evidence from Ofsted has also proved that forcing a school to become an academy doesn't in itself lead to better exam results.

"The Government has also offered academy chains £600 million to help them convert more maintained schools. But councils have seen that same amount cut from the Education Services Grant. This crucial grant would have been used to help protect children and ensure that they do their very best in school. It would also have paid for background checks for staff, speech and occupational therapies, physiotherapy and tackling truancy.

"The money that councils are predicted to lose could be better spent on recruiting, training and keeping excellent teachers, and making sure children are safe and have the equipment and support they need, in buildings that are fit for purpose.

"Our recent analysis of the grades achieved by all schools under the more rigorous Ofsted inspection framework proved that 81 per cent of council-maintained schools are rated as ‘good' or ‘outstanding', compared to 73 per cent of academies and 79 per cent of free schools. These schools should not be forced down the academy route unless they make that decision themselves.

"Councils should be seen as education improvement partners.  We want to work with government to ensure every child gets the very best from their years at school."


a) Information on the survey carried out by the LGA can be found here.

b) Analysis of the Ofsted ratings of maintained schools, academies and free schools is available here.