Agenda item

That the level of school reserves as at 31 March 2023 and overview of schools’ current financial position be noted.

The Strategic Finance Manager (Schools) presented the annual report on reserves held by Flintshire schools together with the risks and internal processes associated with schools in deficit.  The report had been shared with all Headteachers and had been considered by the Schools Budget Forum and the Education, Youth & Culture Overview & Scrutiny Committee.

In comparison with the previous year, there was an overall reduction of 42.31% in reserve levels across all sectors at 31 March 2023, as expected, due to a range of factors.  A breakdown of the position showed that most schools had used a significant proportion of their reserves resulting in a lower level of reserves held than at the same stage last year.  The report also focussed on the challenges for schools in setting their balanced budgets for 2023/24 resulting in a number of voluntary redundancies and ten schools applying for a licensed deficit, with projections for an increase in deficits by the end of the financial year.

The Chief Officer (Education & Youth) said that whilst good progress had been made in managing the reduction in school deficits (in line with the Estyn recommendation), there were significant concerns about the financial position of some schools and the difficulties faced by Head teachers and governors in managing their budgets effectively, given the ongoing impacts of the pandemic and inflationary pressures.  She thanked the Finance teams and school accountants for the additional support and spoke about the effects of the Council’s projected budget gap for 2024/25 on school delegated funding and resources.

In response to a question from Brian Harvey on areas of economic and social deprivation, reference was made to the wider effects on families, learners and schools, together with work on the funding formula for the secondary sector which aimed to target support in the most effective way.

As requested by Councillor Bernie Attridge, explanation was given on engagement with the ten schools reporting a deficit position.  It was estimated that this work would be concluded by the end of October, however the impact on school budgets for 2024/25 would need to be considered at a later stage.

In response to a query, Councillor Allan Marshall was advised that the anticipated reduction in the total level of reserves to around £2m at 31 March 2024 was based on a range of known information at this stage.  In addition, the Corporate Finance Manager provided clarity on the reporting of school reserves earlier in the year.

Following comments from Councillor Glyn Banks on comparison with the position five years ago, the Chief Officer spoke about the difficulties in projecting outcomes and the likelihood that there would be no WG education grants awarded late in the financial year to influence the final position.

The Chair thanked the officers for the detailed report.  In response to questions, information was provided on the approved process for redundancies and associated cost implications, together with supporting schools on medium-term financial planning.

On a question by Sally Ellis, the Chief Officer said that whilst there was no redeployment policy, there was engagement with schools to mitigate the potential for compulsory redundancies.

The recommendation was moved and seconded by Sally Ellis and Councillor Linda Thomas.

RESOLVED:

That the level of school reserves as at 31 March 2023 and overview of schools’ current financial position be noted.