Agenda item

[To receive an update on surplus and deficit budget monitoring and balances held in maintained schools.]

Terry Shaw, Finance Manager presented the Surplus and Deficit Budget Monitoring report and highlighted key points. The report provided Members of Schools’ Forum with an update on the Local Authority processes of monitoring schools having or forecasting a deficit balance and schools carrying excess surplus balances. Also noted were the balances held within Wolverhampton maintained schools as of 31 March 2022.

It was highlighted that there had been no clawback of surplus monies recently although that did remain a possibility.

It was reported that schools had now submitted plans spanning from 2022 - 2025. Four schools had been identified as holding deficit balances for 2021 – 2022, however one of these was anticipated to move into a surplus balance by 2022 - 2023. It was noted that numbers of schools holding deficit balances were predicted to increase across all sectors by 2024 - 2025, but it was acknowledged these were worst-case projections only and allowed time to make required changes.

It was highlighted that since the report was published, the school with a projected deficit balance in excess of £500,000 had set plans in motion to reduce this across 2022 – 2023.

It was reported that there were no immediate plans to claw back any of the surplus balances that had been identified, although further discussions with schools holding these would take place following submission of feedback. This prompted a concern raised in respect of the feedback form return deadline which was not felt to be attainable. It was agreed the finance team would be consulted so a revised date could be settled and communicated to schools.

Concerns around negative public perception of excess balances were allayed by the assurance that robust plans were in place for utilising monies to positively impact the schools holding these balances. It was noted that rising energy costs and the cost of living were likely to impact upon how surpluses might be spent. It was also acknowledged that school closures, staff fluctuations and recruiting issues caused by COVID had influenced spending in unexpected ways, for example setting aside funds for new staff then being unable to appoint.

In response to a query around monitoring trends and forecasting, it was noted many plans were based on worst-case scenarios to allow for unexpected occurrences as well as being influenced by uncertainty around long-term Government funding and figures often looked more positive towards year-end.

Officers pledged to continue working with schools in order to maintain budget monitoring mechanisms and provide realistic forecasting.

The opportunity was taken to acknowledge the supportive contributions of Terry Shaw, Finance Manager who would shortly be leaving the Authority for a new role and thanks were extended on behalf of the Authority and Schools Forum members. 

Resolved:

1. That Officers consult with the Finance Team and a revised date for return of budget monitoring feedback forms would be communicated to schools.
2. That members of Schools’ Forum note the level of balances in maintained schools as at 31 March 2022.
3. That members of Schools’ Forum note the approach to challenging schools around the level of their balances and their plans for those resources.

4.    That members of Schools’ Forum note the monitoring and reporting methodology.