Dozens of council-run schools have deficits of over 拢1 million, shock figures reveal, with some even charged six-figure sums in 鈥渋nterest鈥 by councils for racking up the losses. The number of maintained schools in the red across 65 local authorities has leapt by over 70 per cent in just three years, a Schools Week investigation has found, with specialist settings among the worst hit. Projections for one ailing secondary show its 拢5.6 million deficit is expected to swell to 拢7 million in a year鈥檚 time. The findings shed more light on the hidden world of council school finances. Reacting to the findings, Julia Harnden, of the said: 鈥淚t鈥檚 deeply worrying. This is symptomatic of an education system that is hugely underfunded, with schools continually being asked to find further savings.鈥 More in the red Schools Week analysis shows the number of maintained schools in deficit across 65 local authorities has leapt by 71 per cent, from just under 720 in 2021-22 to over 1,200 last year. This is despite more and more maintained schools becoming academies.. Our investigation identified 48 local authority schools with deficits of over 拢1 million. East Sussex reported an increase from one to seven schools in deficit, while Norfolk had a sixfold rise. The current trajectory of increasing deficits is not sustainable for our schools A Local Government Association (LGA) spokesperson said the increases were due in large part to falling rolls and 鈥渇unding allocated on a per-pupil basis鈥. Primary pupil numbers nationally have been falling since 2018-19 as a population bulge caused by the 2000s baby boom has moved into secondary. Eighty-eight per cent of maintained schools are primaries, compared to 69 per cent of academies. School with 拢7m deficit The school furthest in the red was Monkseaton High School in Whitley Bay (拢5.6 million). North Tyneside council papers show that it is expected to rack up more losses this year, falling into a deficit of 拢7 million by 2027. It has not set a balanced budget since 2016. The secondary鈥檚 situation has deteriorated due to, among other things, falling rolls, 鈥渉igher than average building and maintenance costs鈥 and admission number increases at a neighbouring high school. The council said this was despite 鈥渟ignificant work鈥 undertaken 鈥渙ver a sustained period of time鈥 to address the issues, including staffing reductions and leadership teams cuts. Deon Krishnan, its headteacher, noted that 鈥渉istoric factors, some going back more than a decade mean the deficit remained difficult to recover鈥. Monkseaton was also 鈥渙ne of the first to accept鈥 the DfE鈥檚 offer for one of its cost-cutters to 鈥減roduce a comprehensive review of their finances鈥, according to the council. But despite visiting three times, none were able to identify 鈥渁ny areas of further significant savings beyond those already made鈥. The local authority will close the school next year, having decided it 鈥渋s not a position that the council can support鈥. Special schools rocked Another North Tyneside school, Norham High in North Shields, ended 2024-25 with a deficit of just under 拢4 million. A council spokesperson said the 鈥渃hallenge鈥 headteachers in the area are facing is 鈥渄riven by a combination of rising costs, declining pupil numbers, increases in complex needs and changes to national government funding formulas鈥, adding: 鈥淭he current trajectory of increasing deficits is not sustainable for our schools or the communities they serve.鈥 Analysis of each of the councils鈥 highest-deficit schools shows 38 per cent of them (25) were primaries. Thirty-one per cent (20) were secondaries, 26 per cent (17) were special schools. Overall, just 5 per cent of council-run schools are special schools. Finance expert Micon Metcalfe warned that special schools were 鈥渕ore vulnerable鈥 as their funding 鈥渉as not kept pace鈥 with costs and they tend to spend 鈥渕uch more鈥 on employees due to their 鈥渉igh staff ratios鈥. 鈥楧ifficult decisions鈥 There are 48 local authority schools with deficits of over 拢1 million. Six of them were in Hackney. Anntoinette Bramble, the authority鈥檚 deputy mayor, said the challenges faced in the area are 鈥渟ignificant鈥. Fewer children are being 鈥渂eing born and living in Hackney鈥, while a 鈥渉igher proportion of have greater needs than ever before鈥. Anntoinette Bramble Bramble added the council had made the 鈥渄ifficult decision to permanently close eight鈥 primaries in the past two years. Harnden added 鈥渁ll kinds鈥 of schools 鈥渁re being impacted by the paucity of funding鈥, with the issues 鈥渘ot restricted to the maintained sector鈥. But many of the individual school deficits we uncovered eclipse those seen in some of the most troubled academy chains. A Schools Week investigation in October found that 75 trusts 鈥 running 264 schools 鈥 had raised concerns about their ability to continue operating as far back as in 2023-24. Trust 鈥榖enefits鈥 The St Ralph Sherwin Catholic Multi Academy Trust 鈥 which oversees 25 schools across Derbyshire, Nottinghamshire and Derby 鈥 posted the largest deficit (拢5.9 million). It was followed by the Arthur Terry Learning Partnership (拢3.9 million) and the Sherborne Area Schools鈥 Trust (拢1.9 million). They ran 23 and 18 schools respectively at the time. National Governance Association deputy chief executive Sam Henson noted that maintained schools 鈥渁re also less likely to gain from the financial benefits associated with being part of a group of schools, which academies will necessarily have in a multi-academy trust鈥. North Tyneside also acknowledged its 鈥渁bility to provide direct financial support is limited, and unlike academy trusts, we do not have mechanisms to redistribute staffing or running costs across multiple schools鈥. Schools Week previously revealed that government officials are also working on white paper proposals to encourage all schools to join a group. Stephen Morales, chief executive of the Institute of School Business Leadership, has been in 鈥渆xploratory conversations鈥 with six councils over how 鈥渢hey can organise themselves into groups鈥. He said this was a 鈥渟ymptom of a lack of investment鈥. 拢2m interest bill Some schools are also paying interest to councils on their deficits. Checks of documents published by 51 local authorities suggest 28 of them (55 per cent) have given themselves the right to charge interest. But only seven are actually doing so. They received 拢2.3 million between 2022-23 and 2024-25. Up to 138 schools were charged interest each year. The Oak Wood School in Hillingdon was charged more than 拢340,000 over the period. It has a deficit of 拢2.3 million. Dan Cowling, the secondary鈥檚 headteacher, said the payments make it 鈥渁lmost impossible to balance the budget now鈥. Despite schools鈥 best efforts, this inevitably harms children鈥檚 education He鈥檚 also unable to 鈥減ut money away for a rainy day鈥 adding: 鈥淭he building is starting to look a bit shabby, and we can鈥檛 commit to any big spends on things.鈥 Cowling also believes it鈥檚 鈥渦nfair鈥 maintained schools can鈥檛 receive government bailouts in the way academies do. Instead, they have to go to their local authority for financial assistance. The council said charging interest on cash advances to schools in deficit 鈥渨as an approach that was carefully considered and discussed with the Schools Forum and was agreed as a fair way of maintaining the support provided, without disadvantaging schools in surplus, or the local authority鈥. Education 鈥榟armed鈥 In response to a survey conducted by the National Association of Headteachers earlier this year, 98 per cent of leaders said their school 鈥渄id not have sufficient funding to fully meet the needs of its pupils鈥. Paul Whiteman, the union鈥檚 general secretary, stressed the 鈥渙nly way鈥 for some to balance the books 鈥渋s by cutting staffing, resources or provision鈥. He added: 鈥淒espite schools鈥 best efforts, this inevitably harms children鈥檚 education.鈥 The Department for Education was approached for comment.
Anon 5 December 2025 Finally, Schoolsweek is beginning to balance the number of critical MAT articles regarding finances. This issue goes straight to the heart of the transparency debate. MATs are far more regulated, audited (and pilloried), than LA maintained schools. Academies are not allowed to run deficits and if they do, this is published and an improvement notice issued. Further, MAT leaders must publish their salaries on the school gate, an LA school leader does not, even though the LA system allows the head of a single large school in London to earn 拢191,862.50 (L43 + 25% uplift for r and r). Whilst ranting, LA schools pay nothing for audit, MATs must pay tens and tens of thousands for annual external, and external internal, audits. Money which would be far better spent on educating children.