Academies

There's still a smell of new carpet in the special-needs block at Balcarras school in Cheltenham, and the staff look rather pleased with themselves. "Its hard to believe we fitted everything into the space we used to have," says Louise Young, the academy's deputy head of individual learning. "The kids love it, too."

But elsewhere in the newly converted academy, a "development plan" featuring extra post-16 classrooms and a dance studio is gathering dust. Some carpets may be new, but there's no doubt the shine has come off the academy dream at Balcarras.

From September, the school's budget will be cut by more than £400,000 – the equivalent of nine teachers. Its head, Chris Healy, admits he looks back wistfully on the halcyon early days of 2011, when the newly converted school was basking in the glow of a promise of around half a million pounds extra in the bank each year.

The potential financial benefits were a major incentive to convert, Healy says: "There was a ready-reckoner online where you could measure your existing funds against your funding if you were an academy. We couldn't work out why our figure was so high. We have significant problems with our accommodation and we did think, 'all this could be solved in the next four or five years'. So we had a premises development plan drawn up to use as the basis of our planning."

Balcarras is not alone. Many other academies are now experiencing financial shocks as local authorities – anxious not to lose too big a slice of their budgets to schools that are leaving their control – change the way they account for their central spending on education. Across-the-board cuts in schools' grants and changes to sixth-form funding have also taken their toll, particularly on schools like Balcarras, which is based in a leafy area of Gloucestershire and does not benefit greatly from the pupil premium, aimed at youngsters from poorer backgrounds.

In the early days of the coalition government, many schools took the plunge to academy status, telling parents and governors the move would mean more money. And for many, there was more money for a time, despite assurances from the education secretary, Michael Gove, that this would not be the case. In a survey of almost 1,500 schools carried out last year by the Association of School and College Leaders, seven out of 10 cited financial gain as a reason for converting.

Chris Keates, general secretary of the Nasuwt teaching union, says she predicted at the time that these rewards would not last. "We kept saying to schools: 'If that's your only reason for going, you're going on a false premise,'" she says. "They were getting all sorts of wild and wonderful calculations on how much money they would get. And we were saying, 'Hang on. You're being bribed out of the system. There are no guarantees. You're only going to get that money once – you can't keep getting it.' Now it's all coming back to haunt them."

The acronym on many lips in the world of academy funding is "Lacseg", or Local Authority Central Spend Equivalent Grant. The grant, which gives academies some of the money their local councils keep for central spending on schools, is based on financial returns made each year to central government.

But councils have quickly adapted to this new use of their existing data, and have started to make their calculations differently. Broadly, what they have done is to remove money from the central, catch-all pot and label it instead as being for a specific purpose, thereby reducing the total amount from which academies get their cut.

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