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Guide for governors

School money for governors

Questions to ask at a finance committee, how licensed deficits and recovery plans work, and how to read the figures fairly.

Before the meeting

Look at the school's page on School Money and on the DfE's Financial Benchmarking and Insights Tool. Both use the same published returns. Look at the trend over several years rather than one year, and compare spending per pupil with similar schools.

Questions to ask at a finance committee

These questions come from the Institute for Fiscal Studies' 2026 report on school spending and from the way this site reads the figures. Pick the ones that fit your school.

For every school

  • How does our spending per pupil compare with similar schools, and why? Nationally, primary schools spend about £7,000 and secondary schools about £7,800 per pupil in 2025–26 (IFS 2026 report, p. 7).
  • What does the budget assume about pay rises and pupil numbers over the next three years? The IFS projects that school costs could grow 0.5 to 1 percentage points a year faster than funding (IFS 2026 report, p. 11).
  • How often do governors see the budget forecast, and how close were last year's forecasts to what happened?

If the school is in deficit or heading for it

  • What is the plan to get back into balance, and how many years will it take? Has the council or the trust agreed it?
  • What is driving the deficit: falling pupil numbers, staff costs, special needs support, or something else? Over 80% of schools' costs are staff costs (IFS 2026 report, p. 63).
  • Will the recovery plan change class sizes, the subjects on offer or the number of support staff?
  • Is the council or the trust giving the school extra help or a loan while it recovers?
  • If the gap does not close, what would the school change first?

If the reserve is tight

  • With so little in reserve, what would happen if costs rose faster than expected next year? Pay awards are set each year by the government after independent advice (IFS 2026 report, p. 63).
  • Which costs do we expect to rise most next year?
  • Is the budget relying on one-off grants or fundraising to balance?

If pupil numbers are falling

  • How many pupils do we expect in each year group over the next three years? Primary pupil numbers in England are expected to fall by over 300,000, about 8%, by 2030–31 (IFS 2026 report, p. 19).
  • Are we planning to merge classes, share staff or work more closely with another school?
  • Has the council talked about reducing places in this area? The IFS notes that savings from falling numbers only come if staff or the number of schools are reduced (IFS 2026 report, p. 64).
  • Could spare space be let out or shared to bring in income?

If many pupils need extra support

  • How many pupils have an Education, Health and Care Plan (EHCP) or need extra support, and how is support above the first £6,000 a year funded? Mainstream schools are expected to fund the first £6,000 a year per pupil from their core budget (IFS 2026 report, p. 46).
  • Does the council's top-up money arrive on time and cover what the support actually costs?

In an academy

  • How much of the school's funding does the trust keep centrally each year, and what does the school get for it? Academy trusts spent £510 per pupil centrally in 2023–24 on average (IFS 2026 report, p. 56).
  • Does the school's reserve figure include its share of the trust's central reserves?
  • Can the trust move money between its schools, and has this school given or received any?

If reserves are large

  • What is the reserve being kept for, and is there a timetable to spend it?
  • Is any of it already committed, for example to building work or to cover a planned overspend?
  • Could some be spent on current pupils without putting future years at risk?

Licensed deficits and recovery plans

Council-run schools

Each council writes a scheme for financing schools, following the DfE's statutory guidance. Under that guidance:

  • A school must send the council a recovery plan when its revenue deficit rises above 5% at 31 March of any year. A council can set a lower threshold.
  • A council may include in its scheme an arrangement that lets schools plan a deficit budget, called a licensed deficit. It is normally funded from schools' combined surplus balances.

Ask the council for its scheme, because the details differ from council to council.

Academies

Academy trusts follow the DfE's Academy Trust Handbook. The trust board must tell the DfE within 14 calendar days of its meeting if it proposes to set a revenue deficit budget for the current year that it cannot cover from unspent money from earlier years. Local governors in a trust school can ask the trust board how it plans to support the school.

Reading the figures fairly

Not every rise in a school's income is extra spending power. When the government raised what schools pay as employers into staff pensions and National Insurance, it gave schools grants to cover the bill. The IFS describes this as extra money to pay for extra outgoings, with no change in real resources. About £2.3 billion of the growth in school funding between 2019–20 and 2025–26 was this kind of grant. So when a school's income jumps, check whether its staff costs jumped by the same amount: the money may simply have passed through. (IFS 2026 report, p. 50)

Academy trusts can keep back part of their schools' funding to pay for things run centrally across the trust, such as administration, buildings or staff shared between schools. This is often called a 'top-slice'. Trusts spent £510 per pupil centrally in 2023–24 (in today's prices), more than double the £240 in 2016–17. Councils spent £180 per pupil centrally on the schools they run in 2023–24. The largest items are administrative and teaching staff employed by the trust. This means an academy's own accounts can look leaner than a council-run school's: some of the money spent on its pupils sits in the trust's accounts, not the school's. (IFS 2026 report, pp. 56–57)

Tools

The budget check uses the same rules as the school pages to show what a three-year forecast would mean for the reserve. The embed tool gives you a small badge for the governors' page of the school website.

Sources

Last reviewed .