Tuesday, July 01, 2008

Tories dig multi-million black hole under Birmingham schools

Fury is building amongst the head teachers and governors of Birmingham’s 400 schools over the Tory/Liberal Democrat council’s decision to evade responsibility over single status compensation payments to non-teaching staff and to pass the bill squarely to the schools.

Most councils around the country - including Solihull and Wolverhampton - bore the compensation costs as part of the central budget. Birmingham has decided to take these costs out of the school budgets and the payments – which vary from school to school and still haven’t been decided – are due in this financial year. This has come as a shock to head teachers and the full impact is only now being realised - schools haven't budgeted for this at all because they didn't know it was going to happen. In fact, letters indicating the depth of the hole undermining schools have only gone out within the past few days.

Under Labour, schools in Birmingham have done very well, with good staffing levels and serious investment in IT and buildings. Spending per pupil has risen by 48% in a decade, with 1900 more teaching assistants and over 3000 new support staff. In 1997, almost 11,000 primary children were in classes larger than 30, now there are just a few dozen. With the generous annual settlements, some schools have even put some money aside – perhaps for capital projects or to cover the inevitable rainy day. This actually became a minor embarrassment, as some had significant sums kicking around in their accounts and for the past couple of years, the pressure has been on to ensure that the annual budget is spent during that financial year, with schools saving more than about 5% of budget facing the possibility of the LEA clawing back the money to spend elsewhere.

Accordingly, few schools will have a surplus sufficient to cover the estimated £40,000 to £80,000 that these compensation payments will cost. I've even heard of six figure settlement sums for some larger schools. All this will total at least £15 million across Birmingham schools and almost certainly substantially more – none of which has been budgeted for in the 2007/08 year by governing bodies and headteachers.

And to add to the fun, the lower figure is based on these settlements coming in at only two or three years back pay. If the legal requirement for six years were to be followed, then the costs would be higher still. The council is betting the farm that lower-paid employees will be happy with a couple of thousand paid now in settlement of their back pay claims and won’t want to take action to recover their full entitlement. While this may well apply to non-union members who would have to pay for legal advice, union members get this as part of the service and they are taking a very different view.

I believe that a number of schools are actually considering redundancies amongst non-teaching staff to cover this massive shortfall in funding, a decision that cannot but impact the education of our children. It was hoped that a solution could be found, but I understand that the local authority is resolute on this and will insist that the schools fund the payments. It may be possible to hold some payments over until the 2009/10 financial year, when affected schools would see their budgets slashed to cover the costs.

The council is offering a further solution to cash-strapped schools – a loan with interest repayable over a number of years. This depends on the government agreeing to fund the loan. What this means is that the council will either be mortgaging the education of our children or they will use a back-door method to claw-back surpluses – effectively using very generous government funding designated for education our children for a chunk of single status costs, so that they can trumpet their achievement in keeping the overall cost low and avoid the blame for the tough decisions ahead of some schools.

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