Although Liverpool (England) has experienced a declining school population since 1961, it has not experienced declining educational costs. This is partly because reorganization of grade divisions, school construction as part of unemployment relief, and expansion of prenursery schools all created additional schools. Also, many problems are associated with the attempt to save money by closing schools. First, it is difficult to determine whether a school is under capacity because definitions of minimum capacity are subjective. There was also a previous lack of political will to close schools with shrinking populations because of support for reduced class size and pupil/teacher ratios. A consequence of a lack of school closure policy was an increase in costs for items like heating, lighting, and maintenance. Furthermore, local authorities are limited in their ability to shed staff both by legislation regulating redundancy agreements and by teacher contracts. In addition, educational planning problems in Liverpool are intensified by the size of the voluntary school sector, which receives significant financial support from the local education authority. Fear of political repercussions makes termination of support for such schools improbable. Proposals for the closure of county schools have been politically controversial. Small-area population projections may play a useful diagnostic role in the identification of schools for closure. (JM)