Agenda item

Claire White introduced the report (agenda item 10) which set out the overall position of maintained schools’ three year budgets, highlighting some key observations, and detailed the strategy that the Council intended to follow for schools in financial difficulty.

Table 1 on page 29 of the report showed the position of schools’ budgets. Although the number of schools setting a surplus budget (48) had stayed much the same, there had been a growth in the number of schools setting a deficit budget (11). There was a worrying trend that the number of schools in deficit was continuing to increase.

Table 2 showed the overall balances compared to the original budget/forecast. In 2016/17 the actual net balances were over £2m higher than the original budget. This illustrated the cautious approach that was being taken by schools and it was a trend that was not uncommon. In reality schools had a tendency to set budgets at the worst case scenario and through making careful spending decisions throughout the year were able to make improvements.

Highlighting Table 3, Claire White reported that there were eleven schools with a deficit budget for 2017/18 compared to seven last year (two of the seven schools setting a deficit in 2016/17 had a balanced budget for 2017/18). All except Beenham had improved on their forecast position, which emphasised the hard work most schools were putting in to improving their financial positions.

Looking at the year two and three forecasts, a significant overall net deficit balance would occur if schools took no action. This position was unlikely to materialise, as most schools would do what was necessary to balance their budget, with some taking difficult decisions regarding changes to the way they operated. However, the year two deficit figure was nearly £1m greater than the same figure last year.

Many of the schools that had closed the 2016/17 financial year with an unplanned deficit and had gone into deficit in 2017/18 were those who had left it too late to take action, particularly if the deficit was large and the only option was to restructure.

In their forward planning schools would have assumed that funding rates per pupil would remain the same however, the proposed new national funding formula would change the likely funding each school would receive. As soon as new rates were known, schools would need to reassess their positions.

Claire White drew attention to section 6 of the report which outlined the proposed strategy to reduce the number and size of deficits. Headteachers would join senior finance staff in reviewing, challenging and advising on deficit recovery plans at those schools which were facing problems.

Proposed intervention for schools not meeting their deficit recovery plan was set out in section 6.5 of the report.

Claire White concluded that many schools in West Berkshire had successfully managed to balance and control their budgets, and had taken action to reduce costs, for which they must be commended. Action still needed to be taken to prevent further deficit.

Reverend Mark Bennett recalled that money had been awarded to Kintbury Primary School to support them with staff restructuring however, he noted that the school was still in deficit and queried if the plans had failed. Claire White commented that recovery often took time however, Kintbury Primary School had suffered a lower pupil intake than anticipated. Ian Pearson added that there had been a new Headteacher at the school who was working hard to turn the situation around. The viability of a school was often reliant on pupil numbers.

Chris Davis queried if everything possible was being done to help Parsons Down Primary School set its budget. Claire White reported that the school had a deficit budget of about £80k and that work was now being undertaken with the school to help turn this around.

Graham Spellman commented that the situation would get worse as time went by and he was concerned about the huge gap in forecasting from one year to the next. He questioned, given the huge need for support, if there was enough funding available for Officers to be able to provide this. Claire White reported that the strategy that the Council intended to follow for schools in financial difficulty had been agreed by the Council’s Operations Board and therefore the necessary funding was in place.

Paul Dick commended the report and that the strategy for improvement involved Headteachers.

Brian Jenkins asked for clarification on paragraph 6.7 which suggested that the possibility of charging the cost of support back to schools would need to be explored. He expressed his view that this would be unhelpful to school which were already struggling. Claire White reported that the Council’s Operation’s Board had asked for more information on charging schools. Ian Pearson added that this would only be considered once a school had balanced its budget.

Councillor Lynne Doherty referred to the very recent announcement from the Government regarding school funding and commented that efficiency offers and a central resource had been mentioned, both of which could be extremely helpful to schools.   

RESOLVED that the Schools’ Forum noted the report.