State schools facing ‘bankruptcy’ and closure over existential funding threat

An unprecedented number of state schools could close due to “effective bankruptcy”, the leader of a head teachers’ union has warned.

They are facing “existential crises” due to a lack of government funding and the difficulties in recruiting enough staff, according to Geoff Barton, general secretary of the Association of School and College Leaders (ASCL).

He told i that there was a “very serious risk” that some schools will “simply cease to be viable”, based on the current course set by public spending plans.

“School and college finances are already under severe pressure, and if the current Government public spending plans are implemented over the next Parliament – which would effectively be a second age of austerity – we’re in even deeper trouble,” said Mr Barton.

“Some schools – particularly small primary schools which are also hit by the impact of declining pupil numbers – may struggle to keep the doors open at all and could become effectively bankrupt.

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“If this happens, and some of these schools end up having to close, it really would be a very serious loss of the facilities upon which communities rely, and something we haven’t seen happen before on any scale.”

His analysis is being supported by the Confederation of School Trusts (CST), which represents many of England’s chains of state funded academy schools. CST chief executive Leora Cruddas, said many schools were facing “extreme pressures on their budgets”.

“We do not believe the current approach to school funding is sustainable, particularly for fixing school buildings,” Ms Cruddas told i.

The CST’s latest National School Trust Survey, in 2023, found that less than half of school trust chief executives said they felt “very” or “quite” confident in their trust’s financial sustainability, with 19 per cent saying they were “not very” or “not at all” confident. A fifth of school trusts said they were “concerned” about long-term finances.

Neil Short, chairman of the National Association of Small Schools (NASS), confirmed the “shortage of cash”, particularly in small, rural schools which can have just 30, 40 or 50 pupils.

He said small schools were “twice as likely to close as the national average”, citing research by the centre-right think tank Onward in 2019.

Mr Short said the Government’s national funding formula (NFF), introduced for the academic year of 2018-19, “has not offered the anticipated significant increases in funding for small schools, despite government promises”.

He said the financial situation of each small school varies, but added that there are “instances when schools have to close” due to being “unsustainable”.

Mr Barton said that any future chancellor would “have to revisit the public spending plans because they are so unrealistic”. Speaking during one of his final interviews before stepping down as ASCL leader next week, after seven years, he added: “There’s schools and trusts, which are talking of potential bankruptcy.

“Now, at the moment, the only thing you can do as a head or a chief exec, if you haven’t got enough money is make class sizes bigger, cut certain courses and make certain staff redundant.

“Those will initially be teaching assistants… but teaching assistants are the very people who work with the most vulnerable children. So they will disproportionately be the ones who are most affected by this.”

‘The Tories haven’t understood schools’

Mr Barton has worked with seven Conservative education secretaries during his seven-year tenure as ASCL’s general secretary.

He said the biggest failure of Tory leadership during this time has been the “failure to understand what schools are being expected to do”.

“They’re providing social cohesion; gluing communities together,” he told i. “They can’t do that on their own and yet, with the huge reduction in what local authorities can provide and the lack of support through social care or community policing; schools have been expected to do unrealistic amounts of work on behalf of children and young people without the resourcing they need.

“If we’re going to expect a lot of schools, then they’re going to have to be resourced better than they’ve been resources so far.”

He added that the Government has had an “obsession” with a narrow curriculum that has “squeezed out” extracurricular sports, music and debating.

There is a risk of the curriculum narrowing in state education, while private schools can continue to provide “a whole range of broadening experiences”, he said.

This is partly due to pressures on teacher workload because staff members no longer have the time to take students to sports matches after school or run clubs at lunch.

A lasting message? Mr Barton – who is going to chair the Independent Commission on the Future of Oracy Education – wants to make education “matter more” to parents to prevent a looming schools crisis.

“We have to demonstrate that investing in education heads off problems in other areas – criminal justice, social care,” he said. “All of those issues society has to pick up the tab for – if we get our education system right – then we won’t have to pay for that.

“But that will need investment, which will need voters to really believe that education matters.”

Parents should be especially worried about the teacher recruitment and retention crisis as it means lots of classes are being taught by teachers who are not subject specialists, Mr Barton said.

“The fact you’ve got 400 schools where physics is being taught, and they haven’t got a physics teacher, really should be a concern for parents,” he told i.

“We’re asking PE teachers to be teaching maths. But really, we need a better long-term solution so that we are recruiting our best graduates to choose to do one of the most important jobs there is, which is to educate the nation’s children and young people.”

Mr Short said some small schools had dealt with funding issues by creating federations, meaning they can share the same headteacher, staff members and resources to “ease the burden”.

He said he was “concerned” about the closure of more small schools due to funding issues, but added that each scenario that leads to closure is different and some are “better off” than others.

Mr Barton added: “We’re looking at the schools cutting everything down to the bare minimum which means you have class sizes of 30 or more, you don’t have any teaching assistants … and you would see schools trying to do their best on the most basic budgets.”

He said it was “likely that many schools and colleges will have to make further and very significant cuts to provision – that is things like curriculum options, pastoral support, routine maintenance budgets, and classroom and sports resources”.

A Department for Education spokesperson said: “School funding is rising to more than £60.7bn next year which is the highest ever level in real terms per pupil.

“While the vast majority of schools are operating with a surplus, we are providing up to £40m in 2023-24 to support schools which find themselves in financial difficulties.

“We also recognise the essential role small schools in rural areas play in their communities which is why we provide extra funding for them.”