The average maintained school has seen its reserves jump by 61.3 per cent in two years, leaving the sector sitting on a pot worth almost £2.2 billion.
Official data suggests schools went into the recent cost-of-living squeeze with the healthiest balance sheets since current records began in 2016.
The average school had £178,500 in the bank at the end of the 2021-22 financial year in April, up from £160,486 a year earlier and £110,692 the previous year.
The sector’s combined net reserves across all local authority schools rose by 5 per cent annually to £2.18 billion, also the highest on record. The figure covers the total surpluses of schools in the black, minus the deficits of those in the red.
The Department for Education figures show a divide between primaries and secondaries however, and regional gaps too.
Primaries’ balance sheets were little-changed on a year earlier, after a more signifcant jump the previous year.
Meanwhile secondaries saw their average balances leap from £151,343 in 2019-20 to £322,615 last year, and jump again to £538,673 this year.
Figures for the number of schools in financial distress show a similar pattern. The percentage of primaries in deficit has edged up 0.9 percentage points to 7.6 per cent, whereas the number secondaries in deficit dropped six percentage points to 12.9 per cent.
It meant the overall proportion of schools in deficit rose from 8.4 to 8.8 per cent, but it still marked a lower figure than the four years previously.
Special schools and pupil referral units also saw average reserves increase in 2021-22, in a marked contrast with nurseries with saw theirs drop.
Increases in recent years are likely to be partly linked to Covid, with lockdown closures cutting bills and the pandemic derailing many capital and other spending projects.
Academy trust figures for 2021-22 are yet to be released, but last year’s showed a similar picture with a combined £3.9 billion in reserves. Trusts have faced some criticism over the level of reserves, but say they are much-needed for capital projects and emergencies – such as the current energy crisis.
The figures are striking in the context of an estimated £2.4 billion high-needs deficit across councils, and widespread alarm over core school budgets for much of this year. Yet they only reflect maintained schools’ financial position up to April 2022.
Schools were subsequently lumped with higher-than-expected pay awards and have seen inflation spiral further for energy and other costs.
The lack of extra funding sparked warnings more than half of schools and trusts could fall into deficit, but the government hopes £2 billion in new funding announced last month can alleviate pressures.
National averages also obscure local differences. Eight local authorities in the south-east and London have more than a quarter of primaries in deficit, potentially linked to falling rolls and funding reforms.
Four councils have every secondary in deficit, though two only have a single school each – with most secondaries nationally now academies.
By contrast 22 councils mostly in the Midlands and the north have no primaries in deficit.
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