INVESTIGATIONS have been launched into 16 schools in Liverpool which are believed to be hoarding millions in unspent cash.

The “excessive reserves” across the city are thought to amount to £20m.

In total, more than 60 schools across Merseyside and Cheshire are being investigated by their local education authorities for saving cash they should be spending on pupils.

LEAs have been told to find out why some schools have so much saved up with one school, Gateacre Comprehensive, having around £1m in savings.

Education officers have drawn up the list after the individual schools failed to take action to reduce their surpluses.

Government guidelines stipulate secondary schools should never have more than 5% of their annual budget saved up, while primary and special schools can have 8%.

Last year, the Daily Post revealed around £15m was being kept to one side by schools, although most of it fell within Government limits.

The city council has the power to demand “excessive” balances back, and has already asked three schools – St Julie’s High in Woolton, Broughton Hall High in West Derby and Hope special school, in Netherley – for a total of £200,000 back.

But despite last year’s warning, 16 schools are now going to have their finances scrutinised.

A spokesman for Liverpool City Council said: “There will be 16 schools captured in the review of excessive balances, six of which have been reviewed in the past.

“The majority of reviews will take place during the autumn term with finance officers carrying out the reviews.”

When the Daily Post revealed the council’s plans to claw back excess cash last year, executive member for children’s services Cllr Paul Clein said: “We accept schools need to put some money to one side to cover certain things, but above a certain point, and if there is no reason for it, it can become excessive.

“Schools receive money based on the number of pupils they have and it is only right that it is spent on those pupils.”

A spokesman for the Department for Children, Schools and Families said: “Schools may accrue surplus revenue balances from one year to the next in support of strategic, long term, financial planning.

“However, excessive balances which have no clear purpose are denying educational benefits to today’s pupils.

“By clawing back excessive surpluses, authorities can re-distribute the funds to other local schools in line with priorities and needs.”

Julie Lyon-Taylor, from the NUT, said that schools should be allowed to put some money to one side, but not excessive amounts.

In Sefton, 58 primary schools and 11 primary schools ended the financial year to March ’07 with balances in excess of government-permitted levels. That compares to 11 at the end of March 2006.

In total, the amount kept by schools in Sefton rose from £10m to £12m. One school, St Ambrose High, had recorded a £600,000 balance – more than a quarter of its annual funding.

A council spokesman said: “They have been asked to complete a balances pro-forma and return it to the Local Authority identifying how excessive balances will be used.

“Schools need to be able to hold reasonable balances to provide a safeguard in the event of, for example, unforeseen liabilities or to contribute to large capital schemes.

“However, excessive balances tie funds up needlessly and restrict the council’s ability to deliver develop services. Councils need to be active in managing these balances as far as they are able, recognising that this money is controlled by head teachers and governing bodies.”

In Wirral, 29 schools were found to have excess balances at the start of this year with £7m saved. A spokesman said: “All schools are required to provide explanations and plans when their balance exceeds the threshold. If they have not reduced the balance as planned by the end of a financial year they can be liable to capping.”

Cheshire had 14 schools with excessive balances, Halton had four, Knowsley two, St Helens eight and Warrington two, by the end of the March 2006 financial year – the most recently available figures from central government.