Methodology

LA and school expenditure

• Published: 8 December 2022

Summary

The Local Authority and School Expenditure publication provides the latest information at national and local level on local authority (LA) spending on education, children's services, and social care. Information is also included on local authority maintained schools' income, expenditure and their revenue balances.  

Please note that the figures in this publication are presented in cash terms and have not been adjusted for inflation.

Academy school finance data is published separately. Local authorities (LAs) report their finances using a standard financial year (April to March), while academies report on a financial and academic year of September to August. Since the data relate to different time periods, the two are not directly comparable.

Background information

Income

The majority of the schools budget comes from the Education and Skills Funding Agency (ESFA, an agency of DfE) through the following routes:

• The Dedicated Schools Grant: Funding to LAs to support maintained schools in their area.
• Grants paid direct to academy schools. For example the General Annual Grant, and Start Up Grants for academy schools in their opening year.
• Pupil Premium Payments: Funding to raise the attainment of disadvantaged pupils, closing the attainment gap between these pupils and their peers.

Other funding streams for LAs include self generated funds from facility and service provision, and through donations.

LAs combine the money they receive from DfE and other funding streams to generate their total budgets for the financial year and allocate budgets to all schools in their area based on locally held funding formulae.

Academy schools receive their funding directly from the ESFA, rather than through an LA. Where a school converts to academy status part way through the year, the new academy may be classed as a recoupment academy. 

Recoupment is a method of adjusting a dedicated schools grant to take account of the conversion of a maintained school into an academy. From 2017-2018 onwards this also includes new provision academies and free schools from their date of opening. Further information is in the Academies and dedicated schools grant: recoupment guide.

Expenditure

LA expenditure covers two areas: schools and other education and children's and young people's services. The majority of the expenditure in the schools and other education section goes to LA maintained schools, forming the majority of these schools' income.

LA maintained schools then spend the income allocated and gained that year, and report this through CFR returns.

Other Publications 

Financial information from CFR is also available on the Schools Financial Benchmarking website. This allows comparisons of individuals schools and downloadable files for both LA maintained schools and academies are also available.  Academies data will be updated in Spring 2023. 

Number of LA maintained schools 

The spend on schools by LAs is significantly affected by the number of schools which have become academies, and that number has continued to increase. The fall in LA maintained school numbers means that it is not possible to make like-for-like comparisons of expenditure on schools between years.

Data sources, collection and processing

Section 251 (Outturn)

All local authorities are required to make a Section 251 (Outturn) return to the department. This details their income and expenditure on education and children's and young people’s services in the previous financial year. 

Information and guidance on the collection of Section 251 returns can be found here. The guidance also contains a full explanation of each expenditure category within the return. 

Consistent Financial Reporting (CFR)

All schools in England that were maintained by an LA at any point during the financial year are required to make a CFR return. Alternatively, their LA can make the return on their behalf. The CFR framework provides a standard template for schools to collect and provide information about their income and expenditure in the previous financial year.

Information and guidance on the CFR framework can be found here.

Data collection and processing

Data are loaded directly into the department’s bespoke data collection system; COLLECT (Collections On-Line for Learning, Education, Children and Teachers). 

With a large number of LAs and schools providing detailed data of their income and expenditure, the potential for variation in local accounting practices is high. Therefore, both the Section 251 Outturn and CFR data pass through several phases of checking and data cleaning. Data loaded into COLLECT are subject to a pre-agreed series of validation checks to aid the submission of accurate data. Extensive guidance and support are provided to schools and LAs during this period. This helps to ensure the data are as consistent in format, and as accurate as possible. Following validation, LAs confirm that they are content their data is fit for purpose and the department begins analysis.

Data cleansing and validation occurs between July and October, with the department analysing the data for publication in December.

Additional data sources

For the purposes of better comparability over time, spend per capita (per person) is provided where possible. This is based on population figures combined with finance data. Numbers of pupils are sourced from the School Census and numbers of the wider population are sourced from ONS population estimates.

Methodology

The data collected each year is added to the existing time series data and used to create the latest data files. No further data is expected to be received from schools and local authorities.

Per Capita 

Wherever possible, statistics are provided showing planned spending per capita (spend per person). This makes figures more comparable over time. Per capita figures are derived using the Section 251 Outturn data with pupil numbers and/or population estimates, depending on the sub-category of the planned expenditure being looked at. 

For funding lines that are only targeted at pupils, the spending per capita is based on the number of FTE (full time equivalent) pupils in the relevant school types as reported in the School Census, AP Census and Early Year Census. The School Census pupil numbers are taken from the January within the relevant financial year. 

For funding lines that cover all children within the LA (regardless of school attended) spending per capita is based on ONS population estimates for children of school age. Where the funding line covers children and young people in a specific age group, e.g. transport provision, the population estimate used relates directly to that age group.   

Children's and young people’s services 

Expenditure data is provided by all local authorities in England and covers their own expenditure across four sectors:

• Own provision – services provided or managed by the LA. 
• Private – services provided or managed by private sector entities such as profit-making companies.              
• Other public – services provided or managed by public sector entities such as other LA and other public providers. This includes services provided by health organisation such as primary care trusts.        
• Voluntary – services provided or managed by third sector entities such as voluntary and community groups, social enterprises, charities, cooperatives and mutuals.             

Changes to data collection

Data is presented as a time series. Over the years there have been small changes in the collection to account for changing reporting priorities. Where these changes in data collection mean a break in the presentation of time series data, the relevant sections are marked as “not available” for years where the data was not collected. These changes are summarised below:

2021-22

CFR: Line B07 introduced to collect the outstanding balance on any capital loan made to the school (usually by the maintaining local authority).

2020-21

CFR: Income from grants relating to the COVID-19 pandemic added. This includes the Coronavirus Job Retention Scheme, the DfE grant scheme for reimbursing exceptional costs associated with COVID-19 and income from the £1bn COVID-19 catch-up package announced on 20 July 2020

2019-20

Section 251 outturn: In 2019-20, a section was added authorities to provide a breakdown of their expenditure against each of the Dedicated Schools Grant (DSG) blocks, central school services, early years, high needs (after deductions for academy and post school high needs place funding) and schools (after academy recoupment).

CFR: “Income from facilities and services” split into income from letting premises and other income from facilities and services.

2018-19

Section 251 outturn: High needs place funding within Individual Schools Budget – this was placed into a separate category in for the first time in 2018-19. It was previously included under Individual Schools Budget (ISB) (after academy recoupment).

Section 251 outturn: Infant class sizes - income and expenditure on this category was introduced in 2018-19.

Section 251 outturn: Fostering – expenditure on fostering services was split from 2018-19. The category was split into Fostering services (excluding fees and allowances for LA foster carers) and Fostering services (fees and allowances for LA foster carers).

CFR: Bought-in professional services – this was split into Bought-in professional services - other (except PFI) and Bought-in professional services - other (PFI) from 2018-19.

2017-18

Section 251 outturn: School improvement – income and expenditure on this category was introduced in 2017-18.

2016-17

Section 251 outturn: Therapies and other health related services was placed into a separate category under the High Needs Budget in 2016-17. Previously this was collected as part of the Other Education and Community Budget.

Local authorities and school conversion to academy status

Local authorities and school conversion to academy status

When looking at expenditure by local authorities, there are some caveats which should be noted. The first is the number of schools maintained by the LA over time.  While all LAs have seen a decrease in the number of LA maintained schools due to their conversion to academies, some LAs show larger decreases than others. There were five LAs with decreases of 75% or more in the number of LA maintained schools making a Consistent Financial Reporting return in the years since 2015-16:

• Stoke-on-Trent - from 62 schools in 2015-16 to 15 in 2021-22, a decrease of 75%
• Bromley - from 33 schools in 2015-16 to 7 in 2021-22, a decrease of 88%
• Bath and North East Somerset , from 59 schools in 2015-16 to 7 in 2021-22, a decrease of 88%
• Kingston upon Hull - from 45 schools in 2015 to 5 in 2021-22, a decrease of 89%
• Thurrock - from 16 schools in 2015-16 to 1 in 2021-22, a decrease of 94%

There are also several local authorities who have no LA maintained schools of a phase group making a Consistent Financial Reporting return in 2020-21. This is mainly because all schools of that phase are academies but there are one or two small authorities with no schools of that phase.  The local authorities with no schools making a making a Consistent Financial Reporting in a phase group for 2021-22 were:

Primary 

Thurrock
 

Secondary 

Bexley, Blackpool, Cambridgeshire, City of London, Coventry, Darlington, Doncaster, Havering, City of Kingston upon Hull, Kingston upon Thames, Middlesbrough, North East Lincolnshire, North Somerset, Nottingham,
Redcar and Cleveland, Rutland, Solihull, Southend-on-Sea, Stoke-on-Trent, Swindon, West Northamptonshire

Pupil referral units 

Bromley, Barnsley, Bath and North East Somerset, Bedford, Bexley, Bolton, Calderdale, Central Bedfordshire,
City of London, Cornwall, Derbyshire, East Sussex, Gateshead, Hammersmith and Fulham, Havering,
Hillingdon, Kensington and Chelsea, Coty of Kingston upon Hull, Kirklees, Lambeth, Leeds, Lincolnshire,
Middlesbrough, Newcastle upon Tyne, Norfolk, North East Lincolnshire, North Northamptonshire
Nottinghamshire, Oxfordshire, Peterborough, Plymouth, Portsmouth, Reading, Richmond upon Thames
Rochdale, Rutland, Slough, Southend-on-Sea, Thurrock, Torbay, Warrington, Warwickshire, West Northamptonshire, Westminster, Wigan, Wiltshire, Windsor and Maidenhead, Wirral

Special schools 

Barnsley, Bath and North East Somerset, City of London, Cornwall, Darlington, Kingston upon Thames,
Newham, North East Lincolnshire, Oldham, Portsmouth, Richmond upon Thames, Shropshire, Slough,
Southend-on-Sea, Stockton-on-Tees, Thurrock

Updates and revisions

Calculating income and expenditure of LA maintained schools

Using CFR data:

• Total income = sum of I01 through to I18d minus E30 (direct revenue financing (revenue contributions to capital)). 
• Total gross expenditure = sum of E01 to E32, excluding E30. 
• Net income = total gross expenditure minus I09, I10, I16 and I17. 
• Revenue reserve = sum of B01, B02 and B06. 

Accounting for E30 is a change from previous years made to align with Schools Financial Benchmarking methodology. Data for years prior to 2021-22 has been recalculated to maintain consistency. As a result, some totals will differ to previously published data.  

Further information on categories can be found here.

COVID-19

COVID-19 schooling policy timeline

This publication covers the financial year April 2021 to March 2022, a period when schools are returning to more usual ways of working following the COVID-19 pandemic. The previous financial year, 2020-21, was entirely affected by the COVID-19 pandemic. A timeline of policy changes relating to education during this year is therefore given below. 

March – May 2020
From 23 March, national lockdown in England meant that schools and colleges were asked to open only to vulnerable children and children of critical workers. 

June – July 2020
From 1 June 2020, the government asked schools to welcome back children in nursery, reception, year 1 and year 6, alongside children of critical workers and vulnerable children. 

September – December 2020
During the 2020/21 autumn term, all pupils in all year groups were expected to return to school full-time. However schools may not have been fully open  if:

• A group of pupils without COVID-19 symptoms themselves or in their households had been asked to self-isolate
• They were unable to provided face-to-face teaching for all pupils for the entirety of the normal school day
• They were not open to all year groups
• They were not open to pupils because of a training or INSET day.

January – March 2021
From the 5 January 2021 national restrictions were re-introduced across all year groups and the policy stated that provision on site should once again be provided only for vulnerable children and children of critical workers. From 8 March 2021, all children were again expected to attend school. 

Further information can be found here. 

COVID-19 grants

In 2020-21 information on three COVID-19 related grants was added to the Consistent Financial Reporting return:

Coronavirus Job Retention Scheme

The department recognised that many publicly funded schools were not able to secure income from private sources as normal, for example letting their facilities, providing wrap around child care or offering catering services. Where schools normally provided a service or operation that was wholly or significantly funded by private income, it was known that this lost revenue created additional pressure on budgets particularly where members of staff who delivered these services were funded by private income. Some schools were able to make savings from their existing budgets or consider options to redeploy these staff. To support the sector to protect these jobs we have also ensured that schools were able to use the coronavirus job retention scheme (CJRS) for these staff. Further information is available here. 

Income from the DfE grant scheme for reimbursing exceptional costs associated with COVID-19

We provided additional funding to schools, on top of existing budgets, to cover unavoidable costs incurred between March and July 2020 due to the COVID-19 outbreak that could not be met from their budgets. Schools were eligible to claim for funding for three specific categories of spend: 

• increased premises related costs associated with keeping schools open over the Easter and summer half term holidays 
• support for free school meals for eligible children who were not in school, where schools were not using the national voucher scheme
• additional cleaning costs required due to confirmed or suspected coronavirus (COVID-19) cases, over and above the cost of existing cleaning arrangements.

Schools were able to claim up to a maximum amount from the fund dependent on their size, up to £75,000. The exceptional costs fund was not available to schools who expected to add to their existing historic surpluses in the relevant funding year. This is the funding year in which most of their costs for March to July 2020 fell (September 2019 to August 2020 for academies and April 2020 to March 2021 for maintained schools). 
Schools have been eligible for reimbursement where the additional costs associated with COVID-19 would: result in a school having to use historic surpluses; would increase the size of a historic deficit; or prevent the planned repayment of a historic deficit. 

Further information is available here. 

Income from the £1bn COVID-19 catch-up package announced on 20 July 2020

In June 2020 the government announced £1 billion of funding to support children and young people to catch up on missed learning caused by coronavirus.

Further information is available here. 

Symbols used in the data files

Symbols used in this publication are based upon Government Analysis Function guidance.

: Not available: This information has not been collected or there are no estimates available at this level of aggregation.

z = Not applicable: Where a statistic cannot be produced. For example, where a denominator is not available to produce a percentage. 

Rounding: Financial data is shown as £ million, rounded to 1 decimal place. Expenditure per capita is shown to the nearest whole 3.  All calculations are carried out on unrounded data.

How the department uses this information

The Section 251 Outturn and CFR data supplied by LAs and schools are used in a number of ways within the DfE and its agencies. The main uses are as follows:

• As the authoritative source for comparisons of LA and school income and expenditure.
• Enhancing the evidence base used to support the decision-making within the department.
• As the authoritative source for responding to Parliamentary Questions, Freedom of Information requests and requests for information from other organisations and from the general public.
• Improving transparency through publication of the annual statistical release.

Further information

Related publications

Local authority and maintained school planned expenditure	Planned expenditure by LAs and their schools based on Section 251 budget data. This information is published annually on Explore Education Statistics.
Academy schools	Academy school budgets are administered by the Education and Skills Funding Agency (ESFA); an agency of DfE. ESFA publish data on academy schools’ finances.  To support the fulfilment of duties required under the Companies Act, academy schools make academy accounts returns (AAR) to the ESFA that covers income, expenditure and financial position. Information on this can be found in the schools financial benchmarking website (see below).  Funding, income and expenditure is not directly comparable between academies and LA maintained schools for a number of reasons: LA maintained schools plan and spend within a financial year period of April to March. Academies work to an academic year of September to August. Academies may receive start-up grants during their opening year. Early years funding will generally not be included within academy budgets. Academy rates are paid for on receipt by ESFA, therefore the position at time of reporting data is not always fully developed. Academies have responsibilities that LA maintained schools do not, particularly around services previously provided by the LA (for example library services, behavioural support services and audit costs) and maintenance of capital assets. This can affect what the academy spends its funding on, meaning that an academy, by its nature, is likely to have a different pattern of spend than a maintained school.
Schools financial benchmarking	Individual schools and academy trusts financial data can be viewed and compared to other similar locations at the schools financial benchmarking website.
Guidance on funding arrangements	The ESFA publish information about funding arrangements for schools that explains how school and LA funding is calculated.

Want previously published figures?

Figures for financial years 2010-11 to 2019-20 are available on the departmental statistics website.

Want data for Wales, Scotland or Northern Ireland?

This publication only relates to England local authorities and schools. Education in Wales, Scotland and Northern Ireland is a devolved matter for the relevant governments. For information relating to these countries, contact the departments below or access their statistics at the following links: Wales: school.stats@wales.gsi.gov.uk  |  Local authority budgeted expenditure on schools | GOV.WALES  Scotland: school.stats@scotland.gsi.gov.uk  |  Statistics and research - gov.scot Northern Ireland: statistics@deni.gov.uk  |  Department of Education (education-ni.gov.uk)