House of Commons - Public Accounts

Select Committee on Public Accounts Eleventh Report

Summary

The introduction of Local Management of Schools (LMS) in 1990 changed the way in which schools in Northern Ireland are funded and managed by allowing Boards of Governors and school principals the autonomy to make decisions on resource allocation and priorities. Under LMS, recurrent resources are allocated to schools either by the five Education and Library Boards (similar organisations to local authorities in England and Wales) or directly by the Department of Education. Over £1 billion will be spent during 2004-05 on educating around 340,000 children in Northern Ireland. School Boards of Governors and principals now control 70% of all money spent on school children. The amount of public money involved and the value placed on education makes it vital that this money is spent wisely.

On the basis of a Report by the Comptroller and Auditor General for Northern Ireland,[1] the Committee took evidence from the Department of Education on three main issues:

the effectiveness of the delegation of financial responsibility to schools;
the exercise of control over financial planning and management in schools; and
the extent to which the management of resources by schools has been subject to evaluation and has achieved its objectives.

As a result of our examination, we drew the following main conclusions:

The role of Boards of Governors needs to be clarified and supported

LMS has dramatically changed the role and status of school Boards of Governors. They play a key role in financial and staffing decision-making, curriculum planning and school-level development. While there is much to praise about the contribution they make to the life of schools in Northern Ireland, there is also a need for more focused training, additional support and greater clarification of their role in relation to principals so that they may contribute more to the effective implementation of LMS.

Falling school numbers and surplus places may undermine LMS

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. Rationalisation of school places is needed to free resources for redistribution across the school sector.

Financial management in schools needs to be enhanced

The Department is aware of the need to enhance the financial management skills of principals and governors. In particular, there needs to be a greater focus on strategic resource management, linking budgets to school development plans and managing deficit and surplus balances.

Action is needed to control budget deficits and surplus balances in schools

Funding locked up in school balances has been significant while at the same time deficits are also increasing. This represents an inefficient use of scarce resources which needs to be addressed as quickly as possible.

Delay in technological improvements has impeded budget monitoring

The delay in implementing an interface between the financial management systems of schools and the Education and Library Boards remains is unacceptable. Better automated information needs to be a priority and will facilitate early intervention in schools with deficit and surplus funding problems.

Boards need to engage more with schools on financial management issues