Issue - meetings

That the school balances as at 31 March 2016, be noted.

The Chief Officer (Education and Youth) introduced the report to provide an analysis of the financial reserves held by schools in Flintshire as at 31 March 2016.  He said an analysis of reserves for each school at the end of March 2016 was appended to the report.  The Chief Officer  explained that whilst positive balances in primary schools had been generally maintained the secondary sector was struggling to balance its budgets.  This was a similar pattern reported across Wales and the national statistics on school reserves were due to be published on 20 October 2016.

The Chief Officer invited the Finance Manager to provide an update on the Authority’s treatment of surplus balances.   The Finance Manager explained that the Scheme for Financing Schools had been reviewed recently and it was agreed that it would be revised to place more onus on governing bodies to justify holding a balance which exceeded 5% of a school’s delegated budget and was over the £50K/£100K threshold.  Where there was no justification for holding a balance, or the balance has not been planned but has arisen incidentally, steps would be taken to claw back the funding. Commenting on the positive balances maintained by primary schools the Finance Manager reported that there had been a late allocation of funding in relation to Single Status at the end of the last financial year which had meant that some schools had a higher than anticipated balance.   However, 8 out of 12 secondary schools in Flintshire were forecasting a deficit position by the end of the current financial year.  The Finance Manager agreed to provide the Committee with a copy of the Welsh Government report on school reserves following publication in October 2016.  

Mrs. Rebecca Stark asked whether there had been any response from the Welsh Government (WG) to the Authority’s lobbying on the financial settlement.  The Chief Officer responded that representations and letters had been made to the WG and he suggested that an update be provided to the next meeting of the Committee following submission of the draft financial settlement to County Council on 19 October 2016.  The Chief Officer commented that the impact of continuing austerity measures on the financial resilience of schools was an area of concern.  However, the issue of additional funding was undermined unless schools provided a robust statement as to the use the governing body proposed to make of a surplus in the school balance which exceeded 5% of the school budget.

During discussion the Finance Manager responded to the further queries raised by Members around deficit balances.  She advised that Governors had no legal right to set a deficit budget without the consent of the Authority, however, schools forecasting a significant deficit position would be required to apply for a licensed deficit.  She reported on the expertise and support provided by the Schools Accounting Team to schools where the financial position was cause for concern. 

RESOLVED

That the school balances as at 31 March 2016, be noted.