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government errors cause budget problems for academy schools

9 May 2012

Recent figures show that approximately 128 academies have been overpaid due to government errors and must pay back, on average, £118,000 per academy.

Academies receive their funding direct from central Government, rather than via the local authority. These overpayments were awarded when the academies in question first converted. If the school business manager did not notice the error at the time, which would be understable given the other funding adjustments associated with conversion, the academy would have budgeted to take into account these extra funds. Academies only have until July to repay the funds, a sizeable challenge.

Under the funding agreement, the Government is entitled to claw back overpayments attributable to a miscalculation by the Secretary of State, although it must take into account any representations made by the academy. A lack of certainty around academy funding could trouble schools considering conversion and this error certainly presents an argument in favour of a single national funding formula.

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