Agenda item

To update members of the Forum on proposals for financial support to schools, and amendments to funding policies, including the Scheme for Financing Schools.

The Forum received the annual report of the 2016-17 Proposals for Additional Financial Support to Schools and Other Associated Matters.  The purpose of the report was to update Members on proposals for financial support to schools and amendments to funding policies, including the Scheme for Financing Schools.

In terms of additional financial support to schools, the report set out that 2 main options are available; one-off allocations that do not need to be repaid, normally related to supporting schools in or at risk of entering an Ofsted category; or a loan that is advanced to cover a short to medium term cash flow shortage, that is fully repaid.

Allocations of additional financial support to schools agreed by the Director under delegated powers of £0.031m were reported, along with a request to the Forum to agree that £0.07m be granted to Easthampstead Park Community School to ensure that when combined with the previously agreed loan, a balanced medium term budget plan could be set. In making this proposal, the Council considered that all reasonable savings measures had been taken by Easthampstead Park Community School and that the funding was necessary in order to be able to deliver the national curriculum.

For existing loans, an extension of 1 year was proposed for Easthamstead Park, with 3 new loans for primary schools being recommended that in total aggregate to £0.075m.

The report also confirmed that a proposed revision to loan conditions relating to outstanding balances when schools convert to academy status had been supported by 89% of schools that responded, and this should now be incorporated into the approved scheme, and that the schools applying for new loans this year had done so on the assumption that this change would be agreed. It was also reported that taking account of responses from 2 schools to this consultation, it was proposed that the de-delegated school contingency budget should be available to fund any school deficit balances if these are not reimbursed by the Education Funding Agency.

The final matter dealt with on this report related to amending the criteria used to calculate top up funding to schools experiencing significant in-year increases in pupil numbers. A change in the calculation was proposed for schools opening a whole form of entry to reflect the actual capacity of the school each year, based on available classes, which would tend to increase by one each year, rather than the current calculation that is always based on the capacity when fully open.

Questions and comments from Members were received in respect of:

• The alternative wording provided by the 2 schools that did not agree the proposed change to the school loan scheme suggested that the “LA will, where necessary, negotiate exceptional and varied arrangements to prevent schools converting with a deficit carried forward”.  Members queried whether this flexibility should be incorporated into the loan schedule to demonstrate that every effort would be made to achieve break-even when maintained schools became Academies.  Officers advised members that the Council would always look to support those schools in financial difficulties but wording that was too specific could have the effect of restricting flexibility. 
• The additional financial support provided to schools in Ofsted categories. Was the LA sure that schools could not afford the activities being funded, and how effective had the funded actions been? Officers reported that relevant schools were always required to confirm that they did not have sufficient funds for the activity. It was also confirmed that the next report on additional financial support to schools, expected to be presented to the Forum in March 2017 would provide an update on these matters.

The Forum NOTED:

That in respect of previously agreed loans:

• Wildmoor Heath Primary School was requesting a further advance to cover a medium term funding shortfall;
• Sandhurst Secondary School was on target to meet the original repayment terms;
• Easthampstead Park Secondary School was requesting an extension of one year to the repayment schedule;
• Garth Hill funded their planned expenditure from Devolved Formula Capitals so did not require the advance;
• An agreement was in place with Brakenhale Secondary Academy School to fully repay the outstanding balance.

Under the delegated powers awarded to the Director of Children, Young People and Learning, the one-off funding allocations agreed for schools in financial difficulties.

The Forum AGREED the proposed changes to:

• Eligible expenditure that can be charged to the school contingency;
• The calculation of funding thresholds to be applied to in-year growth allowances for schools that have expanded by a whole form of entry.

The  maintained schools representatives on the Schools Forum AGREED:

• The proposed change to the loan conditions included in the Scheme for Financing Schools which was to be applied for all new loan agreements.  Grant Strudley abstained.

• An allocation of £0.070m from the budget to support schools in financial difficulty to Easthampstead Park Secondary School to ensure sufficient funds were available to deliver the national curriculum.

In respect of the final recommendation relating to new school loans, Brian Fries, Dr Keith Stapylton and Grant Strudley had declared an interest as they were connnected to one of the schools. However, in order to effectively manage the voting and minimise the need for Members to leave and return on each recommendation, and taking account of the nature of the recommendation, other Members of the Forum confirmed that they could remain during the voting but would not be permitted to vote on the item relating to the school they were connected to.

The  maintained schools representatives on the Schools Forum AGREED:

The new loan requests / amendments to existing loan arrangements to cover medium term budget shortfalls, subject to receipt of request from the Chair of Governors and signed minutes from the relevant Governor meeting confirming the loan schedule and compliance with conditions for:

• a new loan for Birch Hill Primary School (£0.03m);
• a new loan for Great Hollands Primary School (£0.03m);
• a revision to the existing loan for Wildmoor Heath Primary School  (£0.015m);

a revision to the existing loan for Easthampstead Park Secondary School extending repayment by 1 year to March 2020.