Proposals to reform Scottish schools would cause significant financial management issues, CIPFA Scotland warns

06-01-2017

Current proposals to reform the £5bn per year Scottish education system could expose schools to significant financial risks, according to the Chartered Institute of Public Financial Management (CIPFA) Scotland.

In a submission to the Scottish Government, CIPFA claims that the proposal to take schools out of local authority control means that Scotland’s 2,500 schools could be left without adequate direction, support and skills to manage their finances sustainably. The Institute warns this could significantly undermine their ability to drive improvement and deliver excellence in education.

CIPFA urges the Scottish Government to look at creating new governance arrangements to support any reform at the earliest opportunity. To establish a new model the following will need to be considered:

  • If schools are to manage their own finances, independently of local authorities, then staff will need the relevant skills and expertise. This may mean the head teacher role will need to become more commercially focused.
  • How schools will access local authority reserves and how resources will be allocated directly to schools will need to be established. 
  • Carefully planned transitional arrangements, during the handover process from local authorities to schools, will need to be put in place including a shadow period.
  • How future capital investment in schools will be funded will be a key issue, considering the Scottish public sector has limited borrowing powers.
  • The VAT status of individual schools will need to be addressed.
  • There will need to be clarity on the future ownership of PFI/NPD assets valued at £4bn.
Commenting on CIPFA’s submission to the Scottish Government on the proposals, Head of CIPFA Scotland, Don Peebles said:

“Without detailed plans to replace the financial management role of local authorities, schools could be left rudderless which would expose them to great financial risk.

“The proposals also raise significant question marks over whether schools have the relevant skills and expertise to manage their own finances. 

“We hope the reform will bring about the desired change but CIPFA believes that structural changes alone will not deliver improvements to educational outcomes. We need only look to England to see how academisation has delivered a raft of failures in school governance and financial management, and has not succeeded in delivering any significant improvement in educational attainment.”


ENDS

For media enquiries please contact Saskia Black on T: 020 7543 5830 or 07818 5707 82 or E: saskia.black@cipfa.org

Notes to editors

CIPFA’s submission to the Scottish Government on Empowering Teachers, Parents and Communities to Achieve Excellence and Equity in Education: A Governance Review is available from the CIPFA press office.


About CIPFA

CIPFA, the Chartered Institute of Public Finance and Accountancy, is the professional body for people in public finance.  CIPFA shows the way in public finance globally, standing up for sound public financial management and good governance around the world as the leading commentator on managing and accounting for public money.