Agenda item

(a)       That the Committee notes the updated budget forecast for the Council as the basis for setting a legal and balanced budget for 2019/20;

(b)       That the Committee notes the total funding uplift which is proposed for schools in 2019/20;

(c)       That the Committee notes that this year the Council will be funding 1% of the teachers’ pay award with schools expected to disappointedly absorb the balance of the cost;

(d)       That the Committee notes that funding proposed for 2019/20 does not include any allowance for the increase in teachers’ pension costs or the teachers’ pay award from September 2019; and

(e)       That the Committee objects to the process of national awarded pay awards not being fully funded by Governments.

The Chief Officer (Education & Youth) presented a report on the latest Education funding position in approaching the closing stage of the budget-setting process for 2019/20.  Whilst there had been some improvement on the original forecast, the Local Government Final Settlement remained inadequate to meet the funding requirements of the Council.

The Finance Manager explained that many Education services were reliant on grant funding which was being eroded year on year.  An extensive review of budgets had identified that there was no scope for further efficiencies beyond those detailed in the report - without significant risk to the resilience of Council services and school standards.  With additional funding from Welsh Government (WG) towards the cost of implementing the national pay award for 2019/20, the Council had made provision for an uplift in base funding to meet 1% as a minimum with schools expected to absorb the remaining balance.  A further cost pressure to schools was expected in September 2019 when a further pay award was due.  In addition, there was no information at this stage as to whether WG would receive supplementary funding to support the increase in teachers’ pensions which posed a further estimated risk of over £2m.

During the budget process, the risk around the impact to services and standards had been raised with Ministers.  There had been extensive engagement with schools and partners on shared responsibilities and this open dialogue had been well received.

Councillor Shotton recalled discussion at the County Council meeting earlier in the week which highlighted the impact of cost pressures on services.  Whilst the increases in pay awards for teachers and non-teaching staff were welcomed, these pressures had not been fully recognised by the UK Government or WG.  To assist schools with these significant in-year cost pressures, a 2.47% uplift to the schools delegated budget was being recommended to County Council.  On the increase in teachers’ pensions, Councillor Shotton suggested that Members may wish to consider engaging with the Welsh Local Government Association (WLGA) to seek assurances through the UK Treasury that funding would be forthcoming.

Councillor Heesom welcomed the update in advance of the overall budget discussion at County Council on 19 February.  He commented on the importance of funding to support sixth form provision in the County.  The Chief Officer and Finance Manager advised that there was no information at this stage from WG on grant funding for Post-16 education in 2019/20 and that Education Improvement Grant funding would be allocated through the regional GwE service.  In attending national and regional meetings, officers were continuing to highlight the importance of timely information on funding to enable the Council and schools to plan effectively.

David Hÿtch said that the national pay award imposed by the UK Government did not help with recruitment and retention at schools which was a UK-wide problem.  He welcomed the increase but expressed concerns about the capacity of schools to absorb additional cost pressures, particularly due to the number of secondary schools already in a deficit position.  The point was acknowledged by officers who said that the Council would continue to work with schools to target support where needed.

Councillor Roberts said that the seriousness of the situation demonstrated the importance of the Council maintaining adequate levels of reserves.  He spoke about ongoing communications with local MPs on the need for those imposing the national pay award to provide the necessary funding for its implementation.

When asked by Councillor Dunbobbin about grant funding to support the children of those serving in the Armed Forces, it was explained that information was still awaited on allocations to certain groups (as set out in the appendix to the report).  Whilst additional grants were sometimes made available at later stages in the process, this created challenges in planning.

In referring to other pressures faced by teachers in their profession, Councillor Kevin Hughes said that the use of reserves to balance the budget for 2019/20 would only make the process next year even more difficult.  His suggestion that the Committee make written representations for a funding solution to the nationally awarded increases was acknowledged by the Chief Officer who explained that a letter had already been sent and that a copy would be shared with the Committee along with the positive response from David Hanson MP.

Councillor Shotton reminded Members that the request for fairer funding formed part of the Council’s #BacktheAsk campaign.

Rebecca Stark raised concerns about the impact of implementing the new legislation on Additional Learning Needs (ALN) and also the rising demand for complex Out of County Placement referrals.  The Chief Officer said that the significant cost implications from the legislative changes had been identified as a key risk as the financial impact could not be assessed at this stage and that dialogue would be maintained with WG on the need for financial investment.  As an ongoing significant risk, spend on Out of County Placements was subject to robust monitoring and challenge, and opportunities were being explored to expand local provision.  Reports on both issues would be scheduled for the annual joint Overview & Scrutiny meeting in June.

Councillor White spoke about the need for intervention by WG to provide the necessary funding to enable schools to improve standards.

Following comments from Councillor Jones about the wording used in the third recommendation, he proposed an amendment to more accurately reflect the discussion.  During discussion, further amendments were agreed by the Committee.

RESOLVED:

(a)       That the Committee notes the updated budget forecast for the Council as the basis for setting a legal and balanced budget for 2019/20;

(b)       That the Committee notes the total funding uplift which is proposed for schools in 2019/20;

(c)       That the Committee notes that this year the Council will be funding 1% of the teachers’ pay award with schools expected to disappointedly absorb the balance of the cost;

(d)       That the Committee notes that funding proposed for 2019/20 does not include any allowance for the increase in teachers’ pension costs or the teachers’ pay award from September 2019; and

(e)       That the Committee objects to the process of national awarded pay awards not being fully funded by Governments.