Naturally Headteachers say this money is held back and earmarked for expenditure on future education projects and don't see why they should be penalised for prudence.
Schools Minister, Jim Knight, says schools should spend the money they are given on education rather than put it in the bank. "When it gets to the scale of £1.6bn we have to ask some questions. That's an awful lot of money," he said.
The average surplus for primary schools is more than £58,000 and for secondary schools, £225,000. That's an increase of 64% and 106% respectively since 1999-2000.
But is this proposed levy something to do with the credit crunch?
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