Labour calls for inquiry into English schools £370m budget bungle

Labour is calling for an independent investigation into the government’s £370m bungle over school budgets in England, with the shadow education secretary, Bridget Phillipson, warning of growing mistrust among school leaders towards ministers.

Phillipson has written to the cabinet secretary, Simon Case, to request an investigation by the National Audit Office, the public spending watchdog, to ensure the “extremely concerning” errors in funding for schools in England would not be repeated.

“Headteachers and school staff are rightly alarmed at the news that the funding allocations published in July are incorrect, with an average primary school now expected to be over £12,000 worse off next academic year and an average secondary more than £57,000 down,” Phillipson said in her letter to Case.

“This is creating yet more stress and pressure for headteachers, affecting staffing decisions, judgments about school purchases and additional support that can be made available to pupils.”

One local authority, Norfolk, is said to be receiving £5.6m less for its schools as a result of the revisions, while headteachers across England have had to redraw budgets and make difficult decisions for next year.

Phillipson has asked for the investigation to look at whether publication of the error was held back to avoid embarrassing ministers during the Conservative party conference that week. She has asked Case to determine when the accounting hole was discovered and when Gillian Keegan, the education secretary, and those outside the DfE were first informed.

“Coming just days after the conclusion of the Conservative party conference I hope you will be able to provide assurance that the communication of this error was not delayed by the conference,” Phillipson told Case.

The £370m accounting error was revealed last Friday evening in a letter from Susan Acland-Hood, the Department for Education’s permanent secretary.

Acland-Hood told Robin Walker, the chair of the Commons’ education select committee: “I would want to express my sincere apologies that this error has occurred, and reassure you that rigorous measures are being put in place to ensure that it will not be repeated.”

Keegan has asked Acland-Hood to hold “a formal review of the quality assurance process” into the calculation of the national funding formula (NFF), after the errors meant schools will receive at least £45 less per primary pupil, and at least £55 less for each secondary pupil in 2024-25.

Phillipson said an external, independent review was necessary, telling the Guardian the funding debacle was “another hammer blow to the relationship of trust between schools, families and government”.

“This crucial relationship is cracking dangerously under the weight of crumbling buildings, a recruitment and retention crisis and growing persistent pupil absence.

“Labour will make it a priority to reset and rebuild the crucial relationship between schools, families and government, drive high and rising standards in our schools and break down the barriers to opportunity,” Phillipson said.

The DfE said schools had not yet received their funding for 2024-25, meaning the error would not result in any clawback from their budgets.

A spokesperson for the DfE said: “The NFF allocations for schools have now been updated and published. The permanent secretary has taken full responsibility for the NFF technical error.

“The secretary of state [Gillian Keegan] has asked the permanent secretary to carry out an external and independent evaluation of the quality assurance process for the NFF and improvements have already been identified to ensure that similar mistakes are not repeated.”

Separately, the general secretaries of England’s four main teaching unions have written to Keegan asking her to restore the £370m to school budgets or break the government’s commitment in the House of Commons when the original figures were published.

“In light of this, we call on your government to meet that commitment to invest in education, by honouring the commitments your minister made,” their letter said.