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Agenda item

Update on Schools in Financial Difficulty

Minutes:

The Schools Forum considered a report (Agenda Item 13), which provided an update from schools that had set a deficit budget in 2016/17.

Paul Dick and Suzanne Taylor left the meeting at 18.16.

The West Berkshire schools finance team reviewed the deficit recovery plans for each school, and the Head of Finance and Head of Education jointly wrote to each school at the end of the summer term setting out the conditions to adhere to whilst in deficit and any concerns/further work that they felt was required.

Most schools had received a visit during the autumn term from members of the school finance team to discuss their plans more fully, review progress, and offer advice. These meetings included attendance from key Governors and were well received. Each school will also be entitled to receive advice and support on their 2017/18 budget planning which will be paid for from the “Primary Schools in Financial Difficulty” contingency fund.

During October a training course on “effective financial management” was delivered jointly by school improvement and finance. This was well attended by all schools (heads, Governors, School Business Managers), it was not just for those in deficit.

Brian Jenkins left the meeting at 18.20.

Chris Davis queried the difference between the figure outlined in the table and the narrative provided by the schools. Claire White advised that the table outlined the position the schools had submitted in June 2016 and the narrative had been recently updated.

Graham Spellman noted that the 2016/17 closing balances for the schools did not include the Schools in Financial Difficulty Fund or its impact over subsequent years.

Reverend Mark Bennet commented that some schools were forecasting considerable surpluses as part of their five year view. Claire White responded that the forecasts were based on the assumptions that costs and expenditure remained the same over the five years, but the Schools Forum had received examples of where costs on schools would be increasing. David Ramsden expressed concern that John Rankin had received £68k from the Schools in Financial Difficulty Fund and were forecasting a budget surplus of £75k in four years. Bruce Steiner noted that budget forecasts were predictions and not fact.

Keith Watts sought assurance of the work offered by the Council to support schools in financial difficulty and stated that he hoped any school that found themselves with a surplus would find a way to spend the money on pupils. Claire White indicated that the report detailed the support and training offered to schools.

Catie Colston asked if triggers other than a school setting a deficit budget could be used to provide earlier support. Claire White advised that schools were required to set a three-year budget and those schools which anticipated a deficit in year two were contacted by the Schools Finance Team in the Autumn Term to clarify whether this was still the case. A handful of schools were still likely to be setting deficit budgets for 2017/18 and these schools would be provided with more support.

Reverend Mary Harwood left the meeting at 18.28.

Claire White further explained that schools had delegated budgets and governors must be responsible for providing challenge to schools management teams.

Keith Watts expressed the view that schools who received the financial difficulty fund were spending other schools money and it would be a concern if their financial position was a result of bad management,

Reverend Bennet left the meeting at 18.30.

Jonathon Chishick asked whether the Fund could be structured as a loan to mandate repayment if schools did realise substantial surpluses. Claire White advised that it had been considered in the past but Schools Forum members had previously felt that this would lead to future pupils receiving less while the school paid off the loan.

Ian Pearson noted that usually when a school asked for support the management team had changed from when the school entered financial difficulty. Funding was not granted lightly; schools’ bids were scrutinised by officers, the Heads Funding Group and the Schools Forum.

Peter Hudson expressed the view that there needed to be a more proactive review of schools in financial difficulty, Claire White advised in January 2017 the schools finance team  would carry out a Month 9 check of schools budgets, but it would not be possible to constantly scrutinise in detail the delegated budgets of all schools.

David Ramsden stated that in his experience West Berkshire Council offered a lot of support and agreed that the governing body should be key in having an overview of the school’s finances and encouraging support to be sought if required. Schools wanted to keep control of their budgets but their options to ensure they set a balanced budget were decreasing over time as costs increased. Claire White stated that this had been the subject of the October 2016 training but attendees did not find some of the cost-reducing options palatable. The experience schools were having in attempting to set balanced budgets was a national issue.

RESOLVED that the report be noted.

Keith Harvey left the meeting at 18.39.

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