Agenda item

The report of Hazel Ryan (Schools Strategic Financial Manager Adviser) presents the position of revenue balances for Wiltshire maintained schools as at 31 March 2019 and identifies those schools that are in deficit.

Grant Davis (Schools Strategic Financial Support Manager) referred to the report which presented the position of revenue balances for Wiltshire maintained schools as at 31 March 2019 and identified those schools that were in surplus and in deficit.  Grant also explained the appendices to the report in some detail and asked the Forum to note that the analysis excluded 2 schools that had converted to academies during the 2018/19 financial year. 

Grant highlighted the following:

·       As part of the DSG’s assurance framework, the DfE ask Local Authorities to provide additional information in certain circumstances.  Wiltshire would not trigger an investigation from the DfE from the number of schools that have had revenue balances of more than 15% of their school budget share for the last 5 years.  However, there could be an investigation triggered in relation to the number of schools that have had a deficit balance of more than 2.5% for the last four years;

·       The number of schools in deficit has decreased from 19 in 2017/18 to 16 in 2018/19, however the value of the deficits has increased from £3.24m in 2017/18 to £3.67m in 2018/19.  This was positive news and recognised that it was not easy to change things around to achieve this;

·       The number of schools in surplus in 2017/18 and 2018/19 remains constant at 125 and 124 respectively, however the value of the surpluses has increased by £0.59m from £9.70m in 2017/18 to £10.29m in 2018/19;

·       Lypiatt Primary School (which had a high surplus) closed in August 2019 and was a site-specific school for MOD children who had returned from oversees following a family breakdown.  Numbers had considerably reduced and there was no deemed need.  The school had previously been propped up my MOD funding and this had been withdrawn, making the school unviable;

·       There were a number of other schools not highlighted in Appendix 3 due to Officer/formatting error which have also had revenue budgets in excess of 15% for the last 5 years and these were – Crockerton, Southwick and Urchfont; and

·       A number of support mechanisms have been put in place to support schools facing financial difficulty.  The Local Authority continues to support the F40 Group which works for fairer funding for schools with Wiltshire being the 7^th lowest funded.  There was an increased capacity of Schools Strategic Financial Advisors to work with schools facing deficit budgets.  There was a new structure within the School Improvement Team to support schools facing a number of challenges and there was collaborative work with Regional and School Improvement Advisers to ensure that recovery plans are take account of both educational as well as financial needs.

Forum Members asked the following questions:

13 of the schools that were in deficit in 2018/19 were Primary Schools – is there a trend in respect of this? 

Grant Davis reported that this is a backward-looking report and across the board it does look like more schools would be heading into difficulty and towards a deficit balance.  The DfE had reclassified the numbers of pupils/size of schools and less than 100 pupils was now classed as a very small school with pupils between 100 and 175 being classed as a small school.  Wiltshire has consistently had a birth rate which produced 5,500 pupils each year, however, due to a demographic dip, the birth rate has dipped to less than 5000 a year leading to a 10% drop in pupils starting school, which will affect schools intake and future planning.

If birth rates continue to drop and there are more “smaller” schools in Wiltshire, how would they recover and be able to stay open? 

Grant reported that a Small School Strategy was currently being worked on and being led by the Director for Education and Skills and the team would be sharing the lessons learned with those schools who have successfully come out of deficit.

Does the re-categorisation of schools make a difference to us in Wiltshire?

Grant reported that Wiltshire does have a higher proportion of very small schools.

New schools and extensions have been built to existing schools in Wiltshire to deal with an increase in demand – was there wrong forecasting on this?

Grant reported that 1400 children were expected as part of the Army re-basing and that this number hadn’t quite materialised and whilst specific schools were identified to deal with this increase, it is also up to parental choice as to where they send their children to school.  All we can do is prepare for what is planned but we cannot take into account parental preference.

Should surplus balances be used for the benefit of the education of the child?

Grant reported that going forward over the next 5 years it was likely that there would be no surplus balances as costs were likely to rise with budgets not rising in line with this.  The 5 year projection shows that the overall position will have moved from a collective budget surplus to a collective deficit.

It can’t help our case when we say we are poorly funded if we have so many schools with budget surpluses?

Helean Hughes (Director – Education & Skills) reported that she is hearing that many schools have had to make very tough decisions to keep within budgets and may have made cuts that they are not entirely comfortable with.

Resolved:

That Schools Forum note the report on School Revenue Surplus and Deficit balances for 2018/19.