Agenda item

Edith Cheng introduced the report (Agenda Item 12), which set out the year-end balance position for maintained schools for 2025/26, highlighting those schools with a deficit or significant surplus. It was reported that total school balances as at 31 March 2026 had reduced by approximately £1.4m compared to the previous year, to around £7.6m. This continued a downward trend, particularly within the primary sector, where balances had declined for a third consecutive year, reflecting pressures from falling pupil numbers and increasing SEND needs.

Edith Cheng noted that a number of schools continued to hold surplus balances above the 10% threshold. In line with previous agreement, these schools had been identified and invited to submit balance statements for review.

Rebecca Hartley queried what plans were in place to support schools in deficit, noting that increasing SEND pressures and falling rolls were key drivers and that, in some cases, these factors were beyond the control of individual schools. Edith Cheng advised that discussions were ongoing regarding how best to manage the increasing number of deficit schools and confirmed that the matter would be taken forward and reported back in due course.

The Chair noted that a report on schools with surplus balances was due to be brought to the Forum in July and invited Ashley Milum to comment. Ashley Milum commented that they were aware that this was something that required a clear response. Once the consultation on the Scheme for Financing Schools (SFS) had concluded this would enable the LA to enact an approach and to implement appropriate levels of challenge and support within the system. He further advised that the issue had been discussed at the Heads’ Funding Group and would continue to be considered at future meetings.

Reverend Mark Bennet raised concerns regarding the pressure on school business managers, noting that they were often working in isolated and challenging roles. He queried what support was being provided to ensure these key staff were adequately supported.

Brett Melvill-Smith queried what the LA was doing to look at schools with deficit budgets if they were categorised, including those in deficit due to financial management issues and those in deficit due to wider pressures such as falling rolls and increasing SEND needs.

Ashley Milum acknowledged the points raised and advised that support for business managers was being considered as part of wider school improvement planning for the next academic year. In response to Brett Melvill-Smith’s query, he advised that maintained schools operated with delegated budgets however there was recognition of the increasing challenges posed by falling pupil numbers and rising SEND needs. It was noted that some schools in financial difficulty had falling pupil rolls, whilst others did not. Ashley Milum further advised that, once the SFS was agreed, it would enable the LA to implement different approaches for the two categories and it was noted that further categories might emerge that would require consideration

Hine Thompson reported that analysis was being undertaken to understand trends and the factors driving variations between schools in deficit. She advised that this work would inform the development of a plan going forward. It was noted that further work was required, including the use of forecasting tools to model different scenarios, and that proposals would be brought forward following further discussion with officers.

Councillor Iain Cottingham commented from a political perspective that there was a strong emphasis on collaboration between stakeholders, including schools, governors and the LA, to address the financial challenges being faced. He noted the ongoing pressures on school finances and emphasised that the priority remained working with all stakeholders to achieve the best outcomes for children.

Chris Prosser queried whether the LA was continuing to work closely with schools in deficit to develop deficit recovery plans, as had previously been the case. Hine Thompson advised that in some cases work was taking place with schools and this was linked to ongoing analysis and development of a broader approach, which required further alignment with services.

Chris Prosser sought further clarity on whether when a school entered deficit, the LA worked with them to produce a deficit recovery plan, as had been the case previously. Ashley Milum advised that all schools in deficit should have a clear recovery plan and acknowledged that where this was not taking place, further work was required to ensure this was implemented

Rebecca Hartley commented on the importance of ensuring that deficit discussions with schools considered the broader context of SEND need, noting that a purely financial approach could risk disincentivising schools from accepting pupils with additional needs. She emphasised the need for alignment between financial and SEND services when reviewing deficit positions.

Councillor Iain Cottingham suggested that a more structured, risk-based approach to monitoring school finances could be considered, enabling earlier identification of potential issues and more proactive support. He noted the importance of taking a holistic view of school performance rather than focusing solely on financial indicators.

Brett Melvill-Smith commented on the importance of ensuring that deficit budget reviews took account of context. He noted that schools in deficit often had limited flexibility to reduce costs due to falling pupil numbers and increasing SEND needs.

In response to the points raised, Ashley Milum reflected on the importance of context in addressing school deficits, noting that rising need and falling pupil numbers presented a system?wide challenge. He emphasised that schools in deficit must have clear recovery plans and that further discussion would be required at both individual school and Forum level. He also noted that there was no contingency funding available to support school deficits and emphasised the importance of timely action to support schools in returning to a balanced position.

RESOLVED that the Schools’ Forum noted the report.