Committee of Public Accounts

Press Notice No. 11 of Session 2005-06, dated 11 November 2005


Mr Edward Leigh MP, Chairman of the Committee of Public Accounts, said today:

"Under Local Management of Schools (LMS) arrangements schools in Northern Ireland are coping well with the challenge of controlling a large amount of public money, but my Committee still has concerns over how the money is managed. In particular, without changes, increasing school budget deficits and unspent balances will continue to represent an inefficient use of scarce resources.

Another downside we identified was a general lack of accountability for performance. Responsibility for resources should be devolved to schools but there cannot be autonomy without accountability. The Education and Library Boards are best placed to monitor and challenge the performance of schools, including their financial management."

Mr Leigh was speaking as the Committee published its 11th Report of this Session, which examined how schools are managing the substantial resources delegated to them-£950 million in 2005-06.

The Committee's main concern about LMS focuses on weak budget monitoring. It was disturbed to find that schools' unspent revenue balances and deficits were both substantial and growing. In 2002-03 schools in deficit by 5% or more had increased to 18% (210 schools amounting to £11 million) and 37% of schools (422) were holding surpluses in excess of 5%, amounting to £31 million. The Committee found it particularly alarming that 38 schools had deficits greater that 20%. Although the Department has recovery plans now in place to remedy this situation, the Committee has the clear expectation that should schools fail to comply with these and fail to manage their budgets in a prudent manner then the Education and Library Boards will need to consider removing delegated powers from those schools.

The problem of poor monitoring of school budgets has been compounded by the fact that the necessary electronic interface between school and Education and Library Board financial systems has failed to materialise. The C&AG drew attention to this problem in 1995 and the Committee found it unacceptable that after such a lengthy period of time the technological improvements needed to support the monitoring of school budgets have not been implemented. In the Committee's view, the failure to enhance the systems for controlling budgets has meant that children currently in schools with deficits and surpluses have been let down and disadvantaged as a result of resources not being used effectively to influence teaching and learning.

Under LMS, Boards of Governors, rather than the Education and Library Boards, decide how to spend a school's delegated budget. There is much to praise about the contribution Governors make to school life. However, in the Committee's view, the Department, the Education and Library Boards and schools need to ensure that sufficient numbers of Governors are in place in schools; that they have a range of relevant skills and, most importantly, that they perform a challenge role in schools and do not succumb to merely "rubber-stamping" the decisions of school principals.

It was clear to the Committee that the effective use of delegated resources is threatened by the difficult issue of falling pupil numbers and surplus school places. Currently there are 45,000 surplus school places in Northern Ireland and it is expected that this could rise to around 75,000 by 2010. Having more school places than necessary ties up delegated resources that could be better used to improve the overall quality of education. The Committee recognises that rationalisation of school places is not an easy task. However, the Department must address this issue to free resources for redistribution across the school sector.

In general, the Committee's view was that resource deployment by Boards and schools was less effective than it might because it remains focussed on inputs rather than outputs. The Committee was disappointed that the Department was unable to provide any concrete evidence as to whether the investment of resources by schools under LMS actually added value or delivered intended educational improvements. It is difficult to show a direct and precise relationship between pupil performance and a particular decision on the use of resources. However, decisions on the use of resources are central to the management of educational processes and their effectiveness needs to be evaluated.

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