Agenda item

Neil Goddard presented the surplus balances report (Agenda Item 7) recalling the process that had been followed the previous year and the commitment made to addressing surplus balances and clawback more quickly in the current year. He thanked the schools that had responded to the Finance Team with the information that had been requested. He stated that a number of schools had fallen under the surplus balance policy in terms of having more than the prescribed percentage within uncommitted balances through the accounts. He reported that engagement with those schools had taken place to understand the reasons for the surplus, and the same criteria as the previous year had been applied. He noted that there were no proposed clawbacks for the current year because the schools had clear reasons why those balances were being held.

Neil Goddard clarified that the role of the Forum was to agree whether the clawback should be applied and not to engage in a conversation about how the accounts were presented and what the balance was. He said that the paper was labelled as a decision, but there was no decision to be made on this occasion. The area could be closed off and not extended as it had been the previous year.

David Ramsden asked Neil Goddard to talk through the decision-making process regarding clawback for the current year. Neil Goddard detailed that the Finance Team had worked closely with schools in closing accounts more quickly each year. Once the accounts were closed a position for each school was reached and this was set out in the first table under section five of the report. This information was then reviewed against returns each school had made about why they had additional revenue held in their account and what this was for. The LA looked at each school’s case and took a view as to whether this was appropriate or not in terms of the surplus balance held. Following this, the LA presented the position to the Forum. The Forum would then need to take a view whether or not to claw back.

The same process applied the previous year had been applied in the current year but much more efficiently and appropriately.Neil Goddard clarified that the review of the information from each of the schools was an LA decision and was reviewed by Finance colleagues and Education colleagues*.

David Ramsden was glad the process had been applied more efficiently however, expressed concern about the shift from clawing back a significant amount in 2024 to none in 2025. The amount of work involved in the process for the LA and schools needed to be considered, if money was not going to be clawed back going forward. Neil Goddard highlighted that money had been clawed back the previous year, and this might again be the case in future years. The LA did not want to claw back money and there was a learning element involved in having the policy in place, in that it encouraged schools to manage their budgets. David Ramsden felt that clawback needed to act as a deterrent for schools to encourage them to spend money for that year and its children, in year.

Edwin Towill observed the timing issue if claw back had been recommended and suggested that the Task and Finish Group reviewing the function of the HFG and Schools’ Forum needed to be aware and consider that the report had been withdrawn from the HFG discussion, which was problematic. The report had been sent to the HFG for comment at around 12 noon on Friday 11^th July with a four hour turn around. This did not feel like an efficient way to ask headteachers to comment on a report as important and sensitive. If there had been a request for clawback he did not feel there would have been enough time for a serious discussion on the matter.

Edwin Towill stated that his second observation was that the current year's clawback concerned primary schools however, it was also noted that the report later on the agenda showed that there was an increasing number of schools with deficit budgets. He felt it was likely that the two areas were connected, and he understood why primaries might try to run a surplus budget due to the risk of falling rolls in the future and that they were trying to mitigate against this. He sought reassurance from the LA about a plan to deal with falling rolls. Neil Goddard accepted the point raised about the timings of the report. Secondly, he confirmed that there was a piece of work being undertaken currently around falling rolls. This work would be brought to both the HFG and Forum for discussion.

Keith Harvey questioned how long the LA would wait before clawing back capital funding. Neil Goddard acknowledged a balance was required between saving up to do a big project over time and having it saved up just in case. For almost all the schools on the list, there had been a significant capital project delayed, and funding was linked to an actual capital scheme in the programme. He stated that the same schools should not be on the list ten years down the line vaguely saving for an aspirational capital scheme that might not happen.

Councillor Iain Cottingham understood the LA had a statutory duty to ensure school funding was spent correctly. Clawback was one of the tools available to the LA to help ensure this happened.

Councillor Heather Codling stated that the LA did not want to close any schools. This was however an area under review, but there would be every effort to keep schools open. There was pressure on places in schools as there were not enough children.

David Ramsden proposed tracking responses for clawback more effectively now there was data available.

RESOLVED that the Forum noted the report.

* The Finance Service collates the information returned by schools. This is then reviewed by the Education Service.