Schools exposed to ‘significant financial risks’ under Scottish Government plans, warns CIPFA

School - credit Rae Allen

Plans to hand £120m of Scottish Government funds directly to head teachers could leave school budgets “rudderless”, a public finance professional body has warned.

 In a submission to the Scottish Government’s consultation on school governance, which closes today, the Chartered Institute of Public Finance and Accountancy (CIPFA) in Scotland expressed "significant concerns” over the capacity of schools to cope with new financial powers.

 Head teachers and school managers may not have enough financial management expertise to cope with issues such as VAT and dealing with private owners of school estate under PFI or NPD contracts, it warned.

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It also said there was no evidence the creation of academies in England, where schools were given responsibility for their budget, had led to performance improvements.

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.”

He added: “We hope the reform will bring about the desired change but CIPFA believes that structural changes alone with 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.”

The Scottish Government has ruled out “discredited academy or free school models” and said ultimate responsibility for school will remain under local authority control.

However, Scotland’s biggest teaching union the EIS has also expressed concern about the capacity of schools to deal with the changes.

General Secretary Larry Flanagan said “sufficient time” would be needed to prepare for any changes.

“The EIS would express caution about the capacity of schools, and the system generally, to cope with a possible pace and reach of change which might induce an unwelcome element of instability to service delivery,” he said.

The EIS also warned “appropriate democratic accountability” would need to be maintained.

“Scottish councils have always provided a mechanism for ensuring a level of local democratic accountability which, for us, remains an important principle as far as public service delivery is concerned,” Flanagan said.

“It is important that new initiatives, such as the £120m in additional funding for attainment projects, are managed through these types of democratic structures to ensure fairness and transparency.”