By Professor John Clancy and Professor David Bailey
10th September 2025

Back to school scandal:

Classroom chaos as

£1Billion lost from School spending,
£200million lost from FE College spending, and
£250million lost from Universities spending

to feed the West Midland Pension Fund’s £4.2Billion surplus

WM Police and Fire lose £180million from spending, too

Councils declare £2.4Billion surpluses in their own latest accounts

These are March 2025 figures – additional amount lost from academy and free schools rises £120million every month since April 2025

£1billion lost from schools is likely 50% higher when council-maintained schools added, and their continuing losses at £60million a month since April

£2.4 Billion lost from councils' spending rises by £340million every month since April

FE Colleges and Universities losing additional £45 million  every month to its pension fund

Average primary school likely owed £1.2million; average secondary likely owed £2.6million; average special school likely owed £2.5 million  (including central & contracted-out services employee costs.)

The headteachers of schools, principals of colleges, vice-chancellors of universities, their students and parents (and other bosses of institutions and services) will be unaware of their huge surpluses as pension fund industry professionals (and the local government establishment) have told them they are not there, and are not recoverable..

Further, they were similarly not made aware by them of their right as individual employers to have demanded surplus refunds under reg 64A(b)(iii) of LGPS Regs 2013 well over a year ago. We explain in our next blog.

You might have thought Local Government Pension Funds are just for council workers.

They certainly are not.

The West Midlands councils and their workers make up only 60% of the West Midlands Pension Fund (WMPF).

The other 40% is mainly made up of the non-teaching staff in non-council state primary, secondary and special schools, and also FE Colleges and a large proportion of our universities.

The non-uniformed firefighter and police support staff are in them too; so are the employees of many social housing groups.

So what happens at the WMPF affects every community’s schools, FE college, local universities, and its police and fire services, in particular.

We know that the West Midlands pension fund got itself into a right mess last March 2025. It had to ‘fess up to having a surplus of £4.2 billion in its accounts.

We have looked at all of the accounts published over the summer by each of the 7 councils, the combined authority itself, the 12 FE colleges,  the 4 universities with employees in the fund, the police and crime commissioner, West Midlands Police, West Midlands Fire Authority, and the housing groups across the region whose employees are in the fund.

The surpluses they have actually declared in their accounts this summer, combined, amount to £3.03 Billion.

We estimate that 85% of the remaining employers are academies and free schools. And also those schools’ related contracted-out staff, such as dinner supervisors, catering staff, cleaners and other site support staff. The other 15% consists of other non-school employers.

There are about 46,000 teachers in all of the state schools in the West Midlands. Their staff pay costs are approximately £2 billion a year. These teachers are not in the West Midlands pension fund, they have their own separate pension scheme, which doesn’t have a fund.

Pretty much everyone else employed in a state school In the West Midlands is in the WMPF, an actual fund. Their wage costs are £933million

Which means the academies and free schools are highly likely to have pension fund surpluses of £1.01 Billion.

When you add the primary, secondary and special schools still under the control of the West Midlands region’s 7 councils (and deducted from their respective councils surpluses) it’s likely £1.6 billion in spending has been lost to the region’s 524,000 schoolchildren in state primary, secondary and special schools.

With FE Colleges and Universities added, over £2 billion has likely been lost to education sector spending as a whole across the West Midlands.

We estimate that broadly similar surplus figures will apply to local authority maintained schools (subsumed inside their respective local authorities own surpluses). Much of the central services used by them will also be similarly subsumed.

Consequently, as the average primary school size in the West Midlands is 371 pupils, the average primary school’s surplus would likely be as much as £1.1 million.

The average secondary school size in the West Midlands is 1,077 pupils. So the average Secondary School surplus would likely be as much as £2.6million.

The average special schooll size is 159 pupils.

Special schools in the West Midlands spend significantly more per pupil, but also proportionately much more (6 times more per pupil) on non-teaching staff (54% of all staff costs, as opposed to 41% in primary, and 27% in secondary) so the average special school surplus would likely be as much as £2.5 million.

We should emphasise that we believe schools are owed much, much more, because we think the WMPF should be using a considerably higher discount rate to calculate the pensions they owe, but that’s for another blog.

So what’s happened is a scandal which has affected each community by the loss of council services to it, yes; but, equally, the loss of services and investment in its schools, colleges, police and fire services. Every community has lost millions of pounds worth of services it should have received this coming year, and in previous years.

But the biggest loss has been to the region's schools and its schoolchildren’s education.

In our next blog we will explain how these surpluses came effectively to be hidden from view, and so how headteachers, principals, and vice-chancellors of educational institutions, and the bosses of other key public services, effectively came to be unaware of their existence. And how they could have, and can now, force the return of the surpluses lost from their spending. Now.