Agenda item

To inform members of the Forum of the provisional outturn on the 2017-18 Schools Budget, including the allocation of balances and the use of Earmarked Reserves.

The Forum considered a report on the provisional outturn on the 2017/18 Schools Budget, including the allocation of balances and the use of Earmarked Reserves.

The Forum was advised that the main trends from previous years were continuing, primarily around the reduction in aggregate school surplus balances, although the rate of reduction had slowed considerably, and the significant under-spending on High Needs Budgets where overall cost increases were lower than previously expected, generally as a result of improved commissioning, vigorous reviewing of provider costs and a lower increase in numbers of students.

Whilst overall the Council-managed elements of the Schools Budget continued to under spend, there was a known substantial future cost pressure that would arise from diseconomy funding for new and expanding schools.  To minimise the resultant financial impact on future budgets, it was proposed to adopt a strategy of transferring relevant under spendings into the New school start up/diseconomies reserve for draw down when required.  Accordingly, a transfer of £1.171m was being proposed.

The Forum formally noted:

1          The outturn expenditure for 2017-18, subject to audit, showed net income of £1.052m which represented an under-spending of £1.325m before allocation of reserves and balances;

2          After transfers to and from earmarked reserves, the Schools Budget had under spent by £1.335m;

3          The main reasons for budget variances;

4          As at 31 March 2018, the aggregate surplus on balances and Earmarked Reserves within the Schools Budget amounted to £5.818m;

5          The previously agreed transfers to and from Earmarked Reserves;

6          The transfers to and from balances and Earmarked Reserves processed as part of the accounts closedown process;

7          As at 31 March 2018, the £1.994m surplus balance on the Schools Budget General Reserve.

The Forum was advised that, taking account of the proposals in the report, balances and Earmarked Reserves held in the Schools Budget were considered sufficient to meet future and the immediate known cost pressures from local factors, although other pressures would arise from national factors, of which the actual cost, and availability of new resources to fund them was not known. This included any impacts from the national school funding reforms, in particular relating to funding councils for new and expanding schools, where final decisions had yet to be made.

Whilst the Forum was generally supportive of using the underspend to support alternative provision, there was a request to provide the Forum with evidence of how funding was being used to turn the Council’s vision for supporting vulnerable pupils into reality.  In response to this, the Forum was advised that the Council was in the process of determining what needed to be commissioned to help young people with additional needs.  It was accepted that the Council was not yet where it wanted to be and therefore it needed to ensure that it made the best use of the additional funding to achieve its vision.  As it was noted that decisions on the use of the surplus balance would not need to be made until the autumn, it was agreed that the decision on how to reallocate this funding should be deferred until it was clearer whether there would be greater value in using the money to support the developing SEN programme or to help address the start-up and diseconomy funding issues already discussed.