Agenda item

Elizabeth Griffiths introduced the report (Agenda Item 10), which set out for information purposes the year end balances for all maintained schools, highlighting those schools with a deficit or significant surplus.

Elizabeth Griffiths drew attention to Table 4 on page 71, which listed schools with significant surpluses (balances exceeding 10 per cent of their funding), and noted that Compton had since been removed from the list due to errors in their submission. iCollege had also been removed from the list. The remaining schools on the list had been contacted and asked to submit information for review, which would be reviewed by the Heads Funding Group at their next meeting in July.

Reverend Mark Bennet identified inconsistencies in the table in Appendix A on page 72, noting that the final column appeared to show a two-year difference rather than one. He asked about the current state of school budgets and whether schools were planning deficits, given pressures from unfunded pay increases. Elizabeth Griffiths confirmed she would check the numbers in the table in Appendix A.

Regarding the second part of Reverend Bennet’s question regarding deficits, Neil Goddard explained that the analysis of maintained school budgets was still ongoing.  There were three options when a school submitted its budget to the LA – it could be accepted; accepted with caveats; or rejected. In a meeting the previous week, seven school budgets had been reviewed, and all had been rejected due to deficits not returning to a balanced position. Neil Goddard anticipated a significant increase in the number of schools in deficit compared to the previous year.

Neil Goddard explained that the Forum had agreed a surpluses policy including possible clawback and this needed to be conducted in a timely fashion. A decision on this would be required at the next round of meetings in July to ensure schools were clear in terms of any clawback. Schools would be met with individually to look at their three year budget plan, and a clawback proposal that was in line with the agreed policy would be brought back to the Forum for decision. Neil Goddard added that school budgets had been received in May and the process of reviewing them took some time. He reiterated that more schools were expected to go into deficit due to falling pupil numbers, SEND costs, and unfunded pay rises.

Reverend Bennett asked if there was sufficient capacity to support schools in managing deficits. Neil Goddard reported that support was provided to schools through colleagues in finance. General support was provided through the licensing of deficits, which was essentially an overdraft and provided a school with time to turn a situation around and move back into a surplus position. Historically this had been provided over three years, but now potentially over five or seven years, depending on the risk analysis and level of confidence of turnaround. Neil Goddard acknowledged the increasingly difficult decisions being asked of governors and schools, and the possibility that some schools might not be able to bring their budgets back into balance. Elizabeth Griffiths agreed with these comments. There was staff within the finance team that supported schools. Regarding the Forum’s visibility of the matter, it was noted that there was a standing item on each agenda, which looked at schools in deficit and the next report was due to be brought to the HFG and Forum in July. 

Neil Goddard commented that he often said that the role of governors was to provide the best education within the resources available. This was a delegated responsibility however, it was noted this was getting increasingly difficult. If a school was not able or willing to set a balanced budget then one tool available was to remove delegation from the school and the LA took control of managing the school’s budget. This was not a preferred route as it could be very disruptive but was something that formed part of the Schools’ Forum’s responsibilities and would require its sign off. He commented that this was not a position anyone wanted to be in, and the main aim was to support schools to reach a sustainable and resilient position with their budgets.

Jo MacArthur commented that she did not disagree with comments about the importance of school governors who played an exceptionally important role particularly regarding finances however, she stressed how difficult it was to recruit governors and that some schools were carrying vacancies.

Chris Prosser expressed concern about clawing back surpluses from schools that were demonstrating sustainability, arguing that it created more work for both schools and stretched finance teams. It was not massive amounts of money involved, and he suggested that there should be common sense with regards to the claw back when there were bigger priorities that required focus. Neil Goddard acknowledged the point particularly when schools were being asked to budget responsibility. He confirmed that the clawback policy would be discussed at the next meeting and there would be an opportunity to discuss its impact in the broader context of budgets.

RESOLVED that:

·       Elizabeth Griffiths would check the numbers under the table in Appendix A in accordance with comments from Reverend Mark Bennet.

·       The Forum noted the report and that a further report would be brought back to the meeting in July for decision regarding potential clawback.