Agenda item

Melanie Ellis introduced the report (Agenda Item 8), which set out for information purposes the year end balances for all maintained schools, highlighting those schools with a deficit or significant surplus.

At the 31^st March 2023 the balance of all schools totalled £13.7m, which was an increase of £2.9m since 2022. This was the third year where there had been a significant increase in schools’ reserves representing an increase of 27 percent.

Melanie Ellis reported that the nursery schools and PRU balances had decreased and the balances of other schools had gone up. Table two under 4.3 of the report summarised the balances of West Berkshire maintained schools by fund and showed that special schools accounted for £1.9m of the increase and secondary schools accounted for £0.9m. Melanie Ellis reported that £11.3m was being held in revenue balances and £2.2m was capital balances.

Section five reported on schools with significant surpluses. Table four showed the schools with a main school surplus balance greater than ten percent of their funding in 2022/23 and this totalled £4.4m. This was most notable in special schools.

Melanie Ellis reported that as the result of a detailed discussion at the Heads’ Funding Group, she would bring another report back to the next round of meetings on surplus balances. It would provide an opportunity to obtain more information from those schools with a surplus balance and also provide options that the Schools’ Forum might wish to consider. 

Melanie Ellis drew attention to section six of the report. It detailed that given the combination of reduced pupil numbers, cost pressures and the decrease in additional funding to support education recovery, the primary school balances were forecast to continue to reduce in the coming year, with a forecast reduction of £5m.

Reverend Mark Bennet asked if Melanie Ellis could comment on where the pressures were. Melanie Ellis drew attention to the table in Appendix A of the report, which showed balance reductions in red. About half of primary schools had seen a reduced balance. This information for other settings was shown under Appendix B.

Reverend Mark Bennet asked if there were any apparent reasons for some schools being in surplus and others seeing a decrease in their balance. Melanie Ellis reported that there did not seem to be a pattern however, she would look at this again when pulling together the surplus balance report for the next meeting.

Keith Harvey commented that he wondered how much the difference in balances was down to the number of children with additional needs that schools were supporting. Keith Harvey commented that his school had seen a large increase in the number of children requiring support.

Catie Colston felt that the huge uncertainty facing the education sector currently would be a factor for schools. Schools were having to make more judgements on what might happen rather than having data that informed what funding would be. Catie Colston commented on the role of governors in supporting budget production and management, and queried if the reduction in training was having an impact. Previously there had been introduction to school funding training for governors followed by further training on school finance. Catie Colston was unsure if all staff in a schools leadership team were now receiving this level of training. Michelle Sancho reported that there was still training available, particularly for business managers. Melanie Ellis reported that the Schools Accountancy Team were working on a refreshed set of training for governors.

Councillor Heather Codling referred to the surplus for the special schools and asked if this was due to the number of vacancies. Melanie Ellis drew attention to section 4.5 (4) of the report, which detailed that the main reason for the surplus balances was due to recruitment and retention in special schools. Councillor Codling noted that this therefore accounted for why a reduction could be seen in future years, as it was hoped staff would be recruited.

Jon Hewitt reported that both special schools had very clear rationale for their balances. Neither school wanted a surplus balance however, the fundamental issue was it was extremely challenging to recruit. There were 145 members of staff at The Castle and the vast majority were support staff and there was currently a huge draw to other places that paid more money. If fully staffed, both The Castle and Brookfields would be facing a deficit in three years’ time. The Castle was currently not able to operate to the level it should due to not being able to sufficiently recruit staff.

Maria Morgan commented that she agreed with comments raised by Keith Harvey and Jon Hewitt. As a nursery school headteacher, Maria Morgan reported that she was not currently struggling with recruitment however, if schools were very inclusive and had high numbers of children with special needs this was a high cost to the school particularly in terms of the recent pay rise. Victoria Park Nursery’s carry forward had reduced substantially over the past two years and this was because it was very inclusive and was carrying a high number of staff at teaching assistant level. Regarding comments from Catie Colston on finance training, Maria Morgan reported that governors at her school had been quite anxious about putting revenue funding into capital due to concerns about the future.

Reverend Mark Bennet referred to comments regarding training and governors. He stated that he was also a non-academy governor at a primary school and one of the concerns raised at the school was the pressure being placed on the school business manager (SBM) and headteacher to manage a budget during times of uncertainty, which posed increased risk. There was a need for governors to own their budget and for SBMs to have confidence in engaging governors when a difficult situation arose rather than front line staff. This would help ease mental health pressures. 

Richard Hand commented that the school teachers’ pay review body had submitted a proposal to the Government, which had said they would release information on the normal pay. Richard Hand commented that in the last couple of years this had meant on the last day of term, which had huge implications for budgeting. Richard Hand was not confident that the Government would support the 6.5 percent or that any award would be fully funded. This would impact on some schools more than others, particularly small schools. In his observation, given that 80 percent of most schools’ budgets went on staffing, the picture was not very promising. 

David Ramsden expressed his deep concern regarding school balances and felt reconsideration of the claw back mechanism was required. This did not necessarily mean clawing back money but rather ensuring there were robust discussions on surplus positions that were past a certain percentage. Due to connection issues experienced by David Ramsden at the meeting, Melanie Ellis reported that she would be happy to receive an email from him with his thoughts on the matter that could be incorporated in to her report for the next round of meetings.

Michelle Sancho commented that the matter of surplus balances had been discussed by the Forum about eight years ago at a time when school balances were significantly different to what they were currently. It was therefore a helpful time for Melanie Ellis to come back with a further report for the Forum to consider. 

RESOLVED that:

• Melanie Ellis would look in to whether there was a pattern in those schools reporting a surplus balance when pulling together her report for the next round of meetings in July.
• Melanie Ellis would bring a further report to the next round of meetings with more details on schools with a surplus balance.