Agenda item

The Schools Forum considered a report (Agenda Item 9) which set out the three year budgets of all maintained schools and highlighted some key observations. The overall position of the 74 maintained schools (69 budgets submitted as 5 sets of federated schools now operated with one single budget for 2 schools) was shown in Table 1. The number of surplus budgets was going down, with the number of deficit budgets increasing. However looking at overall balances compared to original forecasts, it was evident from these figures that many schools would set a “worst case scenario” budget, but would manage spending decisions carefully during the year with sight of the longer term position.

Considering the overall position on the year two and three forecasts in table 4, if schools took no action there would be a significant overall deficit. 26 schools had forecasted a year 2 (2017/18) deficit of greater than £25k, compared to 20 schools in 2015/16. This position was unlikely to materialise, although the increase in numbers showed it was becoming more difficult for schools balance their budgets without making any changes to their operation. Unless in a deficit position and the school has been required to produce a detailed deficit recovery plan, for many schools years two and three were usually the position if nothing changed – i.e. pupil numbers were static so funding remained the same, staffing numbers and grades remain the same, yet costs (inflation and pay rises) go up.

Graham Spellman commented that in the commercial sector, budget forecasting was always completed on a worst case scenario basis because one could not be sure of future costs. It was good practice of schools to forecast in this way.

RESOLVED that the report be noted.