Agenda item

(a)       That the schools reserve balances as at the 31 March, 2020, be noted;

(b)       That the changes to the Protocol for Schools in Financial Difficulty be noted; and

(c)        Should the Council receive additional funding as part of the Local Government settlement, over and above the minimum requirement, the Committee support in-year revenue being provided to support schools in deficit.

            The Chief Officer (Education & Youth) introduced the school reserve balances for the year ending March 2020 and the protocol for schools in financial difficulty.  There continued to be pressure on school budgets demonstrated by the reducing school reserves.  The analysis of reserve balances for each school in Flintshire at the end of March 2020 was shown at Appendix 1 of the report.

            Secondary school budgets continued to be under significant pressure with a number of factors contributing to the current financial position as detailed in section 1.02 of the report.  In previous years, primary balances had held up well despite the continuing pressure of austerity measures and this had offset the worsening position of secondary schools.  Primary pupil numbers were forecast to reduce and this would create challenges for Primary Headteachers in managing their budgets in future years.

            In response to the worsening financial position of some secondary schools, the Education & Youth Portfolio developed a Protocol for Schools in Financial Difficulty which was finalised and issued to schools in October 2019 and provided a framework for schools to apply to the Authority for a licenced deficit.  The Protocol also provided a framework for the Council to give an appropriate level of challenge and support to help schools in financial difficulty set a balanced budget.  Flintshire Internal Audit Service conducted an advisory review of the Protocol in March, 2020 and there would be a full internal audit conducted of the Licenced deficit process in 2020/21.  The recommendations of the advisory review were detailed in section 1.06 of the report and work was ongoing to address the recommendations, as shown in Appendix 2 of the report.

            Councillor Dave Mackie commented on the size of schools being a large factor towards them being in deficit and referred to the smaller schools who seemed to be facing the largest issues on school balances.  He said that some schools had managed their budgets successfully and suggested that schools who were facing challenges liaise with each other in order to find solutions.  His main concern was around small schools and the opportunity for the Council to take action to assist in reducing their deficits as part of the budget setting process and looking at wider solutions to assist in the future.

            Councillor Ian Roberts, Leader of the Council and Cabinet Member for Education, thanked Councillor Mackie for his comments and commented on the challenges for smaller schools who still had to provide the curriculum and pastoral support.  He assured the Committee that all options were being considered to support schools in deficit with proposals coming forward soon to address some of the issues which included structural issues which needed to be addressed.  He also assured the Committee that along with the Chief Executive and the Chief Officer there had been robust challenge of those schools in deficit to better understand the challenges.  

            In response to concerns around licensed deficits, the Chief Officer that all schools had a responsibility to provide learners with access to a broad and balanced curriculum.  There were significant levels of fixed costs which all schools had to meet and the Council were being ambitious in its school modernisation programme in order to provide better environments for learners.  The Strategic Finance Manager - Schools Accounting and Finance assured the Committee that officers were working closely with secondary schools in high deficits and that poor budget management was not a factor.  She outlined that there was insufficient resources and that schools with increasing pupil numbers were on track to see their deficits reducing.  Work had also been undertaken to identify primary schools where their future budgets could be of concern in order to provide the necessary support and identify where changes were needed.

            Councillor Tudor Jones thanked the officers for their responses and asked when future interventions were planned and whether this would be for all school or individual schools.  The Chief Executive advised that there was no point in looking for solutions that did not exist.  He said that secondary schools were a priority and that there had to be an increase in annual revenue budgets in secondary schools before they would be able to deal with historic deficits.  He commented on the overall funding per pupil in Wales and said that the schools across Flintshire did not spend enough per pupil in Wales but this was because the Council was underfunded.  It was not about just meeting additional costs around pay but ensuring a sustainable approach to school budgets going forward which formed current debates with WG.  He advised the Committee that it may consider an additional recommendation to those listed in the report, that should there be sufficient funding in the Council’s national settlement that the Council aims to prioritise an injection of funding into school budgets over and above inflation as a priority.

            Councillor Mackie said that from the information contained within the report, he had calculated that the average amount spent per secondary school pupil was £4,527 and that the Prime Minister had stated that the average spent per secondary pupil in England last year had been £5,000.  He said that this supported the comments made by the Chief Executive around being an underfunded Council.   

            In response to a question around the impact of the emergency situation on school budgets, the Chief Officer explained that the impact of the emergency situation was not shown within the current report as it related to the last financial year of 2019-20.  The WG had set up a hardship fund which provided financial assistance to schools if they could demonstrate that additional expenditure met the criteria set by WG.  The Finance Manager advised of the process for schools claiming financial assistance through the hardship fund and said that the criteria had been unclear at times.  She explained that the financial impact of the emergency situation on schools was being assessed and that it was hoped that the closure of schools over the spring/summer terms would offset some of the additional costs.    

            Councillor Ian Roberts commented on the budget setting process for the 2019-20 financial year and said that no proposals had been forthcoming to increase local taxation to support secondary schools in dealing with their deficit.  He said that he agreed with the Chief Executive that he hoped the solutions would lie in better financial support from WG but said that options to increase local taxation to provide support rested with all Members.  He said that good public services cost money and the emergency situation had shown the value of good public services. 

            In response to a question around the responsibility to maintain kitchen equipment, the Strategic Finance Manager explained that this responsibility sat with NEWydd as part of a service level agreement between them and the schools.

            The recommendations within the report, together with the following additional recommendation were moved by Councillor Dave Mackie and seconded by Councillor Bob Connah:-

• Should the Council receive additional funding as part of the Local Government settlement, over and above the minimum requirement, the Committee support in-year revenue being provided to support schools in deficit.

RESOLVED:

(a)       That the schools reserve balances as at the 31 March, 2020, be noted;

(b)       That the changes to the Protocol for Schools in Financial Difficulty be noted; and

(c)        Should the Council receive additional funding as part of the Local Government settlement, over and above the minimum requirement, the Committee support in-year revenue being provided to support schools in deficit.