School Moneyby Schools in Reach
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Guide for parents and carers

Reading a school's money page

What the figures on a School Money page mean, how to read a deficit fairly, and kind questions to ask your school.

What a school money page shows

Every state school in England reports its money to the Department for Education (DfE) once a year. Council-run schools send a consistent financial reporting (CFR) return covering April to March. Academies report through their trust's academy accounts return, covering September to August. School Money shows those published figures, school by school.

  • Income: the money the school received in the year. Most of it is government funding.
  • Spending: what the school paid out. Most of it goes on staff.
  • In-year balance: income minus spending, for that one year.
  • Reserve: the savings the school has built up over the years. This is the figure that shows whether a school is in deficit.

Each figure is shown per pupil first, with the total beside it, so that a small school and a large school can be compared fairly. Every figure says which year it is for and where it came from. To check one, look up the same returns on the DfE's Financial Benchmarking and Insights Tool.

The five money statuses

  • ▼ In deficit: the reserve has gone below zero.
  • ↘ Heading for deficit: the school has spent more than it received for at least two years running and, at that rate, would use up its reserve within about three years.
  • ● Tight: the reserve is under 3% of a year's income, which leaves little room for surprises.
  • ✓ Healthy: the reserve is 3% of a year's income or more, but under 8% (5% for secondary schools).
  • ▲ Large reserves: the reserve is 8% of a year's income or more (5% for secondary schools). Schools often keep money back for a reason, such as building work.

A status is a starting point for a conversation, not a verdict on the school or on the people who run it.

How to read a deficit

The word deficit is used for two different things, so it helps to tell them apart.

  • One year of overspending (a negative in-year balance) means the school spent more than it received in that year. Often this is planned, and paid for from savings.
  • A reserve below zero means the school has spent more than it received over several years, and its savings have run out.

Spending more than you receive in one year is not the same as being in deficit. Many schools keep savings (a reserve) and plan to use some of it, for example to cover a pay rise before funding catches up, or to keep staff while numbers dip for a year. What matters is the pattern: is the reserve still above zero, and is this the first year of overspending or the third? The IFS makes the same point about further education colleges: a single year of deficit does not necessarily mean serious financial trouble, but repeated deficits are a warning sign. On this site, 'in deficit' means the school's total reserve has gone below zero; 'heading for deficit' means it has overspent for at least two years running and, at that rate, would use up its reserve within about three years. (IFS 2026 report, p. 82)

Why schools end up in deficit

Most of a school's money goes on people: over 80% of schools' costs are staff costs. So when pay and other costs rise faster than funding, or a school loses pupils and the money that comes with each one, the budget is squeezed quickly and staffing is the only big thing left to cut. In 2024–25 and 2025–26, mainstream school funding per pupil grew by 2 percentage points less than school costs, partly because rising special needs costs took a large share of the extra money. A deficit usually comes from several of these pressures at once, not one bad decision. (IFS 2026 report, pp. 62–63)

What happens next

A school in deficit is not left on its own. Under the DfE's guidance for councils, a council-run school must send the council a recovery plan when its deficit rises above 5% at 31 March (a council can set a lower level), and a council may let a school plan a deficit budget for an agreed time, called a licensed deficit. An academy works with its trust, which follows the DfE's rules for academies. The guide for governors explains both.

Questions to ask, kindly

The head, the school business manager and the governors usually know the pressures better than anyone, and they are often already working on them. These questions open a helpful conversation:

  1. What is putting pressure on the budget: falling pupil numbers, staff costs, support for special needs, or something else?
  2. Is there a plan to get back into balance, and has the council or the trust agreed it?
  3. Will the plan change class sizes, the subjects on offer or the number of support staff?
  4. How does our spending per pupil compare with similar schools, and why?
  5. How can parents help? For example, by supporting the parents' association or by offering skills for free.

You can ask through a parent governor, at a parents' meeting, or by writing to the chair of governors.

Try it yourself

The budget check shows what a school's next three years could look like if income and spending change. The guide to falling pupil numbers and the guide to special needs funding explain two of the biggest pressures.

Sources

Last reviewed .