Agenda item

To update Members on overall service performance 22-23 and Learner Outcomes from 2022.

That the Committee note the level of school reserves as at the 31 March 2023, and overview of schools’ current financial position.

The Chief Officer (Education & Youth) introduced the report and thanked the Strategic Finance Manager for the work undertaken in bringing the report together which would also be presented to the Governance and Audit Committee and School Budget Forum. The report had also been shared with all Head Teachers.

            Prior to presenting the report, the Strategic Finance Manager referred to table 3 shown in the report and advised that a revised version had been circulated to the Committee ahead of the meeting. This report had been expanded to include the first six months of the current financial year to provide an outline of the current situation in schools and the Strategic Finance Manager highlighted the budget reduction of 3% on top of inflationary increases to schools in the current financial year. The first part of the report outlined the situation with regard to reserves with Table 1 highlighting the reserves as at the end of the financial year 2022/23 compared with 2021/22.  Information was provided on the impacts on primary, secondary and specialist school budgets with a fall from £12.5m to £7m with the appendix highlighting the percentages on a school-by-school basis.

            The Strategic Finance Manager referred to Table 2 which highlighted how the reserves had moved over the last five financial years. There were concerns with regard to the resilience of the secondary sector when managing unforeseen circumstances, such as long-term absence and the impacts that this would have on the level of reserves held. The report also provided an analysis for the primary sector with six primary schools in negative reserves at the end of last year, with three which were fairly minor, but the other three were significant.

            The Strategic Finance Manager confirmed that all schools had submitted their 2023/24 budget plans which had highlighted an increase in requests for support from the Finance Team, HR colleagues and colleagues in School Improvement. There had been higher levels of voluntary redundances, and this information was included at Table 5 of the report. The Annual Workforce Census which would be carried out in November would provide a better understanding of the current situation, but it was felt the situation with regard to redundancy was not over yet as schools were using their reserves to manage this year with risks in 2023/24 or 2024/25. Table 6 within the report provided an estimate of the positions across all schools and an overview of the forecast information compared with last year was given.

            The Chair commented that challenging times remained with an overall reduction in school reserves and felt that the report clearly highlighted the position with schools. She thanked Head Teachers and governing bodies for their work in striving to reduce costs and completely understood their reasons for speaking to the Council and GwE for help and assistance.

            In response to a question from Councillor Gladys Healey on the allocation of school budgets, the Strategic Finance Manager explained that schools funding for the financial year was formulated after the Council had set its budget in mid-February. With regarding to funding for pay awards it was explained that an estimate of the funding was set aside as the teacher pay award and the support staff pay awards were not known in April 2023. The Council had budgeted for the cost, but these had not been allocated through the funding formula until confirmation had been received with schools incurring the costs. This had worked well previously as schools had received the amount of the pay awards and not an estimate. The Chief Officer confirmed that schools agreed with this understanding that the money would be released into their budgets when the awards were settled and finalised. Communication with Head Teachers and governing bodies continued until the pay awards were settled.

            In response to a question on school reserves the Chief Officer clarified that no school should be in detriment. The Strategic Finance Manager commented that schools should not be using reserves to fund pay awards as the risk was held centrally. As soon as the September pay award was confirmed with the Council receiving the Teacher Pay and Conditions document, the Teachers’ pay would go up and the funding would be transferred to schools to cover that amount.

            The Chief Officer appreciated the challenging year that Head Teachers and Governing Bodies had experienced. The commitment had been given the same as last year that as the budget for 2024/25 progressed that open and effective communication would continue with Head Teachers to keep them updated of the discussions being held prior to obtaining the legal and balanced budget in February.

The recommendation, as outlined within the report, was moved by Councillor  Arnold Woolley and seconded by Councillor Hilary McGuill.             

RESOLVED:

That the Committee note the level of school reserves as at the 31 March 2023, and overview of schools’ current financial position.