Schools eat into their financial reserves

For the second year running, schools in primary and secondary education face a deficit. The 2011 deficit amounted to 171 million euros, versus 190 million euros one year previously. Despite the negative financial results, schools still invest in buildings and equipment and consequently, bank balances melt away and their financial situation is becoming precarious.

From surplus to deficit

Together, schools in primary and secondary education had a surplus of 285 million euros in 2007. Subsequently, their financial results gradually deteriorated and three years later, in 2010, schools faced a deficit of 190 million euros. Since then, expenses and revenues of schools have hardly changed. Schools spent 14 billion euros on personnel costs in 2010 and 2011, i.e. approximately 80 percent of their total costs.

Financial results schools

Schools invest in real estate and equipment

Net investments amounted to 133 million euros in 2011; the value of buildings and equipment has risen. Net investments are higher than the result, partly because it usually takes a relatively long time to cut back on investments and personnel costs. Investment plans are often long-term projects  and if personnel are made redundant, the schools are bound by collectively negotiated agreements, like the requirement to formulate a social plan.

Financial results and net investments

Decreasing bank balances

Schools can only fund net investments and negative results by eating into their reserves. The overall amount deposited in their bank and savings accounts was reduced by 233 million euros in 2011. For individual schools, this implies that they can drop below a so-called signalling value. This is the case for 1 percent of primary schools and 10 percent of secondary schools. Primary education comprises nearly 7,500 schools, secondary education 650 schools.

Mark Groen