ESFA annual report shines spotlight on cost savings and internal failings

ESFA annual report shines spotlight on cost savings and internal failings

The Education and Skills Funding Agency (ESFA) has published its annual report, which highlights how the ‘arms-length’ DfE body has been performing in the last financial year.

The organisation, which was tasked with finding savings across the sector through its ‘school resource management advisers’ initiative – more commonly known as ESFA cost-cutters – identified a total of £292million of potential savings during 366 school visits.

However, the annual report does not reveal whether the schools identified went on to make these savings to their budget.

The annual report also reveals a number of errors and failings by the ESFA in the last financial year.

These include:

  • A £2.1million payment being sent the wrong recipient due a reference number being incorrectly inputted into the ESFA’s system. The money was subsequently recovered and the ESFA has pledged to improve its systems to avoid similar errors.
  • A late submission to reclaim VAT led to the ESFA losing £2.5million

The annual report also detailed a number of significant debt write-offs where money owed to the ESFA was waived as a result of the closure of a trust or during a rebrokerage deal. The Authority wrote of £700, 000 owed by Sexeys School Trust and £1.9million of debt which had been accrued by University Technical Colleges.

The report also reveals that the ESFA has made a contingency in the event that it loses an Employment Tribunal which is due to conclude in April 2023, which could cost the organisation £75,000 in loss of earnings and legal costs.

Although the ESFA continues to lose money from fraud, the report records five less allegations than one year ago. In total, the ESFA lost £1.5 million to fraudulent activity, with £244,132 recovered. Meanwhile, trusts lost £548,383 – a significant reduction on the £1.3 million lost during the previous financial year.