Agenda item

Wendy Howells introduced the report (agenda item 9) which set out for information purposes the year end balances for all maintained schools, highlighting those schools with a deficit or significant surplus. 

Table 1 summarised the overall closing balances of West Berkshire maintained schools compared to the previous year and Table 2 gave a breakdown of the 2017/18 year-end balances by type of fund.

Ian Pearson stated that last year, the Schools’ Forum had been concerned about unspent Pupil Premium funding. An investigation was carried out and miscoding was identified as a contributing factor. It was uncertain as to why certain schools had not corrected the issue. Work would need to take place going forward to investigate schools with significant surpluses. Patrick Mitchell commented that it could be a timing issue particularly regarding Pupil Premium funding and the Sports Fund, as these funds were reported in line with the academic year. This would explain why there was still a significant balance at the end of the financial year.

Catie Colston queried if schools were able to merge Pupil Premium funding with other budgets. Ian Pearson stated that schools had to separately report on how Pupil Premium funding was utilised.

Suzanne Taylor asked if Pupil Premium funding details had been viewed on individual schools’ websites to see if the funding matched what they had been given. Councillor Lynne Doherty added the caveat that not all schools were as robust in their reporting as others.

Patrick Mitchell commented that regarding the Sports Fund, schools had received an increased budget late in the year and therefore they might be acting cautiously about spending it.

Councillor Doherty referred to paragraph 4.5 and noted the £2.9 million being held in revenue balances. Councillor Doherty asked if like with the Council, there was a reserve budget for schools. Ian Pearson stated that schools would be aware of their balances in advance and a surplus of 10% or over was considered in excess of the norm.

Councillor Doherty asked what was considered to be a healthy balance and Ian Pearson commented that 5% was generally what was expected. The Chairman stated that it was important to note that governors often had varying views on this. Keith Watts stated that it also depended on the size of a school’s budget to begin with. Reverend Mark Bennett stated that unexpected costs such as maternity costs and recruitment could have a big impact on schools budgets.

Suzanne Taylor felt that caution needed to be taken as the aim was to motivate schools to save money and plan ahead. Chris Davis concurred with this and stated that this was why the HFG had asked for further information from schools with a budget of more than 10%. Money being held back would have little benefit to children. Chris Davis added that the HFG had also discussed that a clear format was required when asking schools for information on their balances. There were a higher number of schools ending the year with a surplus or a deficit and therefore the question that needed to be asked was what was being done to ensure schools across West Bekrshire were receiving the right amount of funding from the offset.

Reverend Mary Harwood stated that she was aware that Chaddleworth (considered a school with a significant surplus) and Great Shefford Primary Schools were predicting a deficit for the following two years and she felt that some small schools needed congratulating for thinking ahead.

Wendy Howells reported that Table 1 showed the position of school balances at the end of the year and some schools had moved out of deficit, which was very positive. The seven schools that had closed the year with either a worse deficit than planned or an unplanned deficit would be worked with closely. 

Patrick Mitchell noted that some of the narrative provided by the Willows Primary School did not match the information within the table in the report. Wendy Howells confirmed this was a typographical error and would be corrected.

It was asked if the Schools’ Forum had a role to play in obtaining further information from schools. Wendy Howells confirmed that the HFG had requested further information from schools of concern and this information would be brought to the meetings of the HFG and Schools’ Forum in July 2018.

Reverend Mark Bennett asked what had been learnt from the process and Wendy Howells reported that there had been one school that the Schools’ Finance Team had not expected to report a deficit at year end. A process would begin whereby the Schools’ Finance Team would work with the school to identify the issues. Reverend Mark Bennett asked if there were any indicators that could have flagged up that there were problems. Wendy Howells explained that if a school predicted a deficit then the they would be monitored. If the school did not set a deficit or seek support then the Schools Finance Team were not able to send an officer in to provide support as they would not be aware of the situation. Schools had a delegated budget and were not obliged to send in additional information until they were in deficit as per the Scheme for Financing Schools.

Keith Watts asked if schools were asked about their expected levels of expenditure. Wendy Howells reported that schools were asked these questions when setting their budgets and a judgement was made regarding whether their figures were realistic. When a school was at risk of going into deficit then the Schools Finance Team would work with the school. However, it needed to be noted that there were also staffing pressures within the Schools Finance Team.

Chris Davis commented that he was interested to understand what could be improved, for example conducting a mid-term check to ensure all schools were monitoring their budgets. Wendy Howells agreed that it was these kinds of checks that needed to be carried out however, like in other areas of the Local Authority, it was about having the funding and resources to be able offer this level of support.

Ian Pearson noted that it was highlighted in the report that in some instances governing bodies were unaware of the situation being faced by their school and improving communication in this area might have a role to play going forward.

Wendy Howells reported that corporately the Local Authority monitored budgets at months three, six and nine, so the Schools’ Forum might be minded to take the same approach, or alternatively just monitor at month six and nine if resources were an issue. Patrick Mitchel concurred with this approach however, stated that the capability of schools was being relied upon and in some instances the information received at month six might not be reliable. Wendy Howells acknowledged this point.

Suzanne Taylor asked if any training was offered to schools on forecasting. Wendy Howells felt that this was something that could be looked into. Reverend Mary Harwood stated that it was important to ensure that governing bodies were asking the right questions in order to get to grips with and deal with situations when they occurred.

Wendy Howells moved on to Table 4, which showed schools with significant surpluses in excess of 10% of their budgets. The HFG had asked for further information on schools showing a continued surplus and this was detailed in Table 5.

Chris Davis commented that the information contained within table 5 was very interesting. He felt that if schools with a continued surplus above 10% had been asked in 2013/14 what they expected this to look like going forward, none of them would have been likely to predict a larger surplus. There was a level of scrutiny required that would need to investigate annual data and would require robust justifications from schools.

Keith Watts felt that important points had been raised about governing bodies. He was concerned that there was an element of governors who viewed a surplus as profit and allowed it to build up. There could also be an element of overzealous housekeeping and the relevant questions needed to be asked to discover the cause of surplus build up.

Wendy Howells confirmed that a table including predications for main schools budgets for 2018/19 and 2019/20 would be brought the next round of meetings in July 2018. 

RESOLVED that a report would be brought back to the HFG and Schools’ Forum meetings in July including:

·         Further information on school balances and schools in financial difficulty.

·         Information on work taking place to reduce the number and size of deficit being faced by schools. 

·         Forecast information for the main schools budgets.