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Issue - meetings

School Loans

Meeting: 17/05/2016 - Cabinet (Item 63)

63 School Loans

 Report by Carolyn Godfrey, Corporate Director.

Supporting documents:


Councillor Laura Mayes, Cabinet Member for Children’s Services, presented a report which provided an update on the progress of maintained schools converting to academies and the potential role of the Local Authority in converting a current budget deficit into a formal loan to a maintained school, to facilitate their transition to become an academy.


Issues highlighted in the course of the presentation and discussion included: that the proposed approach sought to reduce the financial risks to the authority; how the Council would assure itself that academies were able to meet the requirements of a loan; that the proposals should be cost-neutral for the Council; and that the proposals could encourage better financial management amongst relevant schools.




1.    To note the current position of Wiltshire schools converting to academies


2.    To delegate powers to the Associate Director, Finance to consider awarding loans to maintained schools to facilitate their conversion to become an academy.


3.    To authorise the Associate Director, Finance, to enter into appropriate formal arrangements for the award of a loan, where the maintained school currently is in a financial deficit position with the Local Authority and has an agreed recovery plan that extends beyond the standard 3-5 year recovery period. In all cases, loans will only be made following consultation with the Cabinet Member for Children’s Services, Cabinet Member for Finance, Associate Director Law and Governance, Associate Director Commissioning Performance and School Effectiveness and in accordance with the requirements of the Local Government Act 1972.


Reason for Decision:


Due to Wiltshire being a poorly funded authority for school funding, combined with the impact of the current demographics, a small number of Wiltshire schools are in a financial budget deficit position. All deficits are being managed in conjunction with the LA.


Budget deficits have proved a barrier to those schools converting to become an academy, and leave the financial risk of the deficit with the local authority. The purpose of this report is to provide members with background information and seek a decision regarding the conversion of these budget deficits into a formal loan.




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