Agenda item

That the school balances as at the 31 March 2015 be noted.

The Finance Manager introduced a report to provide an analysis of the financial reserves held by schools in Flintshire as at 31 March 2015.  She advised that the level of reserves held by Flintshire schools at the end of March 2015 had increased compared with the reserves held in the previous financial year, however, she commented that in comparison to other authorities in Wales the overall balances were relatively modest. 

                        The Finance Manager advised that an analysis of reserves for each school in Flintshire was appended to the report.  She reported that Secondary school reserves had moved from a surplus balance to a deficit position and four secondary schools had negative reserves.  Primary school reserves had increased.  The Finance Manager explained that primary schools had reigned in spending in the final quarter of the financial year in response to concerns about future funding reductions.  However, members were asked to note that based on current forecasts it was anticipated that the level of reserves would fall significantly in the current financial year.

In response to the questions and concerns raised by members the Finance Manager explained that in accordance with the Authority’s policy, schools must provide a statement on how they intended to use any surplus balance above the limit allowed to be carried forward.  The Authority also required a statement from schools as to the use that it proposed to make of a surplus in the school balance which exceeded the limits set.  The Finance Manager advised that the Schools Accounting Team requested and scrutinised this information and commented that overall schools were good at submitting spending plans.  

Responding to the further queries raised by members the Finance Manager outlined the procedure and rationale for allowing a deficit balance.  She advised that Governing Bodies had no legal right to set a deficit budget without the consent of the Authority.  Members were advised that there were three secondary schools forecasting deficits in 2015/16 and two licensed deficit agreements in place with a further agreement being negotiated.   There were seven primary schools which had a deficit balance. 

During discussion Officers responded to the queries and concerns expressed by members concerning deficit budget agreements.  The Finance Manager explained that there would be a clear reason and understanding for a school having a deficit budget and robust plans put in place for recovery.  If there was no prospect of recovery then immediate action was taken.  The Chief Officer advised that the Authority had no power to write off the deficit balance of a school. 

Councillor Nancy Matthews expressed concerns around the monitoring of schools at risk of reaching a deficit positon.  The Finance Manager explained that if a school was in a deficit positon it would be included as an item for consideration at meetings of the School Performance Monitoring Group.  She also advised that intensive support was provided to those schools where a licensed deficit arrangement was in place.

Councillor Nigel Steele-Mortimer asked what happened if there was a surplus balance in the school budget in the event that a school closed.  Officers gave a verbal explanation and agreed to provide further information to the Committee in response to this question.  

Mrs. Rebecca Stark commented on the difficult decisions to be made by Governing Bodies due to reduced funding levels and commented on the need for Governors to have the appropriate skills and information to address matters such as redundancy.  She asked if the Authority could provide any additional help to schools in terms of assistance from Human Resources on such matters.  The Chief Officer advised that an agreement was in place for temporary additional help to be provided to assist schools in such circumstances.    

Officers responded to the further questions raised by members concerning funding per pupil and advised that the funding followed the pupil through their education.

RESOLVED:

That the school balances as at the 31 March 2015 be noted.