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Agenda item

School Balances 2016/17 (Claire White)

Minutes:

Claire White introduced the report to the Schools’ Forum, which set out for information purposes the year end balances for all maintained schools, highlighting those schools with a deficit or significant surplus.

Claire White drew attention to Table 1 on page 16 of the agenda, which summarised the overall closing balances (all funds) of West Berkshire Maintained schools compared to the previous year. A more detailed breakdown of this information was contained in Appendix A.

Claire White reported that school revenue balances had continued to decrease over the last year by £1.2m (23%). The greatest reductions were in primary schools. The overall level of balances continued to remain high in special schools and pupil referral units (PRUs).

Claire White moved on to highlight figures on Table 2 of the report, which gave a breakdown of the 2016/17 year end balances by type of fund.

Table 3 showed the financial position of schools opening and/or closing the year in deficit or who had set a deficit budget for the year but closed with a surplus. The table highlighted those schools with a planned deficit for the year and all of them apart from Beenham had been able to reduce their deficit, and two schools had ended the year with a surplus. Claire White commented that this showed how hard schools had worked to manage their budgets to try and reduce the deficit as soon as possible.

In total 15 schools had closed the year with a deficit and there had been a huge increase in unplanned deficit. It was disappointing that the number of schools closing the year with a deficit had increased from five at the end of 2015/16, and from seven actually setting a deficit budget for 2016/17.

Many of the schools with an unplanned deficit had set a budget with little contingency. Claire White suggested that there needed to be more in year scrutiny on schools in this position . All schools with a deficit had been asked to produce an explanation setting out how this had happened and the detail of this was included under Appendix B.

Claire White stated that a number of schools had shown a significant swing in their forecast for January 2017 to what they had actually closed the year with in March 2017. This brought the quality of forecasting being conducted into question. In response to strengthening quality of budget forecasting in schools, the local authority would be offering a new software package as part of the accountancy buy back service, which would be rolled out to schools from the autumn term.

Reverend Mark Bennett queried if any exploration had taken place into why forecasted figures in January were so different to end of year figures and Claire White confirmed that it had not.

Paul Dick stressed that the authority did not seem to be taking enough action. Many schools worked extremely hard to stay within budget however others were not. The local authority needed to be harder on schools with growing deficits and if no improvement was made then financial delegation should be removed. Paul Dick felt that it was unfair on other children in the district if these schools were not held to account. Claire White agreed with Paul Dick’s comments. She stated that schools who had set a deficit had been worked with to help reduce this. The local authority was currently setting up additional corporate processes to agree a strategy to support those schools ‘at risk’ to help prevent them going into deficit. Further information on this area would be brought to the next meeting of the Schools’ Forum in July.

Catie Colston expressed that she was not surprised that more schools were in deficit at the end of the year. There was very little that small schools in particular could do to reduce their deficits. Most schools had sound finance systems in place however there was a limit to what could be done besides combining or shutting schools. Claire White stated that this would be touched on at the next Schools’ Forum meeting including options for smaller schools that were experiencing difficulty.

David Ramsden queried if financial support to schools classed as ‘at risk’ was being monitored. He was concerned about schools that were repeatedly ‘at risk’ and continuously provided with financial support. Paul Dick stated that there were many grant and subsidies available to schools and they needed to either be supported to consider such options themselves, or it should be done for them.

Ian Pearson stated that much would be out of the local authority’s hands once the national formula came into play. They needed to take a longer term view and  identify schools that needed support sooner rather than later.

David Ramsden referred to schools with surpluses and queried how they had managed to avoid using them. Claire White stated that she was also surprised that the schools in question had not had to use all  of their surplus funds. David Ramsden believed that the number of schools with a surplus had risen since the claw back scheme had been put in place however, Claire White confirmed that this was not the case and the number of schools had actually decreased.

Reverend Mark Bennett referred to the case of the Willows, where it was said there had been miscommunication regarding an extra class. Schools could face problems due to wilful ignorance however, if they were placed in difficulty then a lesson needed to be learnt from this. Ian Pearson stated that a conversation had taken place with a number of schools regarding taking on extra classes. To make this viable 20 to 30 pupils would be required. At the Willows the Headteacher had taken a view on staffing for the forthcoming year with an extra class in mind however, when the number of pupils was confirmed, not enough had chosen the Willows to warrant an extra class.

Ian Pearson stated that this situation had occurred for a number of reasons including parental choice about where to send their children to school and this had meant the situation had not worked out as it had been anticipated. Some schools had attempted to resolve their staffing problems by moving the member of staff to a school that was struggling with numbers.

 Reverend Mark Bennett queried how the local authority was working with schools who had catered for bulge years including secondary schools that would feel the stain later on. Ian Pearson stated that there had not been an issue with bulge years at secondary school level. The popularity of particular schools was a very influential factor in such matters.

Reverend Mark Bennett felt that with school funding facing increased pressure moving forward, care needed to be taken in how these issues were handled. Ian Pearson agreed however, stated that there were a range of other factors involved besides local authority involvement.

Graham Spellman referred to the new software that would be rolled out to schools to support them with their finances and asked if there was any evidence to suggest that schools were cutting corners. He further questioned if schools were equipped to take on the new software. Claire White stated that every school in West Berkshire had adequate finance staff who were able to take on the new software.

David Ramsden stated that the new software would not fix the problems faced by schools. Claire White stated that staff using the new software would have to apply their intelligence however, it would help them to factor in all purchasing and staffing commitments. There were a lot of draw-backs to the spreadsheets that schools were currently using as they were complex and cumbersome, whereas the new software package was much easier to use.

Keith Watts noted that the problems faced by Westwood Farm School could not have been planned for. Claire White stated that this was why there was a Schools’ in Financial Difficulty Fund.

RESOLVED that the Schools’ Forum noted the report.

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