Agenda item

That the school reserves balances as at 31 March 2019 be noted.

The Chief Officer (Education & Youth) presented the annual report on reserves held by Flintshire schools and the risks and internal processes associated with schools in deficit.

As at 31 March 2019 there was a 4.7% increase in the overall level of reserves since the previous year, with the 13.1% increase in the net deficit of reserves held by secondary schools offset by a 7.2% increase in primary school reserves.  Whilst the position on primary school budgets was mainly positive, secondary school budgets remained under considerable pressures, some of which would be alleviated through the impact of projected demographic changes on the redistribution of funding.  On schools with surplus balances, a review was being undertaken of schools with consistently high balances.

The Finance Manager explained that the revised ‘Protocol for Schools in Financial Difficulty’ - which had recently been issued to schools - provided a more rigorous process for holding schools to account on their financial management and would provide appropriate support for those heading towards a deficit position.

Councillor Heesom sought assurance that the position was being managed.  The Chief Executive said that school reserve balances had already been identified by the Council as an area of concern and reinforced by the recent Estyn recommendation.  The revised process would show greater transparency and provide constructive challenge to schools where necessary.  It was noted that, having been through this process, some secondary schools may still be unable to achieve further efficiencies without compromising delivery of the new curriculum and that special budget intervention may need to be considered.

During discussion, the Finance Manager agreed to circulate the revised protocol to the Committee.  The Chairman highlighted the importance of schools sharing the document with their governing bodies to which the Chief Executive responded that officers would formally request that schools place the item on their agendas in the next cycle.

Following a question by Allan Rainford, the Finance Manager confirmed that there were no concerns about the small number of schools which had not yet taken up the option of the enhanced level of service.  This extra support was not needed by schools with appointed business managers however schools in a deficit position were obligated to sign up.  Information was given on the requirement for schools with surplus balances to submit spending plans.  In relation to the Estyn report, there was no defined length of time that schools could carry a deficit balance, however Estyn had been satisfied with the Council’s response and had recognised the ongoing financial challenges.  It was noted that the position on deficit school reserve balances was not unique to Flintshire.

When asked by Sally Ellis about modelling work on the changes in demographics, the Chief Executive spoke about wider corporate planning projections to inform investment in school building programmes and housing developments.  The Finance Manager said that three year projections for primary school numbers to reduce by 495 would result in a 2.5% decrease in their budgets and that secondary numbers rising by 444 would increase their budgets by 3.2%.  The Chief Officer said that the demographic changes may be one of a number of reasons for some schools maintaining surplus balances.

In response to comments from Councillor Johnson on school funds, the officers provided a brief update on progress with the action plan discussed in September.

RESOLVED:

That the school reserves balances as at 31 March 2019 be noted.