Agenda item

Wendy Howells introduced the report (Agenda Item 12), which set out the overall position in relation to school balances. The report also highlighted some key observations and detailed the strategy that the Council intended to follow for schools in financial difficulty.

Table 1 on page 103 highlighted how many schools had a surplus or deficit budget. The number of schools forecasting a surplus had risen slightly for 2018/19 and the number of schools forecasting a deficit budget had reduced by one school.

Table 2 showed the overall balances for each sector compared to the original budget/forecast. In 2017/18 the actual revenue balances were over £2m higher than the original budget (with the main school budget outturn nearly £1.8m higher than the original budget). The main school budgets set for 2018/19 were forecasting a net surplus of £642k, which was £3.5m higher than the forecast set in 2017/18. These swings were no different to previous years and it was possible that schools were setting a “worst case scenario” budget for years two and three of their forecasts. Careful decisions and assistance from the Schools’ Accountancy Team would hopefully help to manage the budget deficits down.

Catie Colston asked in essence what the figures were showing and Wendy Howells confirmed that overall schools were being pessimistic with their forecasting for years two and three. Catie Colston queried if schools were taking this approach because they were struggling to predict that far ahead and Wendy Howells confirmed that this could be the case. David Ramsden noted that there were big gaps between forecasted figures and actual balances. Schools were trying to give realistic figures however, only had their year one budgets agreed. There was huge financial pressure on schools and therefore they needed to act cautiously. Wendy Howells highlighted that if schools were struggling then they needed to contact the Schools’ Finance Team for support. Patrick Mitchell stated that pulling budgets back under control through employing lower cost members of staff was a method of the past.

Table 3 showed that seven schools were continuing a deficit from the position in 2017/18 and a further two schools closed in deficit  and set a deficit budget for 2018/19. The 2018/19 balance as forecast in 2017/18 was £608,890 however, it was now known that the deficit would amount to £923k. Even though the overall position of schools had improved the situation for schools in deficit had not improved. Table 4 gave the overall three year forecast for the main school budget for each sector. It was expected that most schools would manage to improve their deficit.

Wendy Howells moved onto page 106 of the agenda, which gave details on the West Berkshire Strategy for Schools in Financial Difficulty. The Strategy had not changed since 2017/18 and was very dependent on staffing levels. The schools that required intervention immediately included John Rankin, The Willows, The Willink and Westwood Farm as all had significant deficits.

David Ramsden asked how the Strategy was applied within individual schools. Ian Pearson stated that meetings were set up involving a ‘task force’, which would review a school’s budget and staffing structure, and determine options to repay the deficit and make recommendations. A plan would be put in place and if the school deviated from this plan then further conversations would be required. David Ramsden commented that it was extremely difficult to move out of deficit once a school had found itself in this position.

Keith Harvey asked at what point a ‘notice of concern’ was raised. Wendy Howells confirmed that this was applied if a school was in deficit and was not working with the Schools Finance Team.

David Ramsden noted that there were a number of federated schools in deficit. Ian Pearson stated that a project was underway looking into how federated schools operated. These schools had access to two lump sums. Leadership costs at the beginning of the process were a consistent issue. Keith Watts was curious about this point because it had been assumed initially that the restructure of leadership would reduce costs. Ian Pearson explained that expanded structures had often resulted in increased leadership costs.

Chris Davis noted that all but one school had now submitted their budgets and asked if the Schools’ Forum should be concerned about this particular school. Wendy Howells confirmed that all schools had now submitted their budgets.

Catie Colston asked if Governors were included in meetings with schools facing financial difficulty and Wendy Howells confirmed that they were always invited to be involved.

RESOLVED that the Schools’ Forum noted the report.