Agenda item

To provide an update on the 2022-23 forecast budget monitoring position for the Schools Budget, to raise awareness of key issues and management actions being taken and to advise on progress to date on the Education Capital Programme.

The Forum considered a report which updated on the 2022-23 forecast budget monitoring position for the Schools’ Budget, the key issues and management actions being taken and progress to date on the Education Capital Programme.

Paul Clark highlighted that the overall budget had been set in the context of a large deficit of £7.500m being forecast.  However, from the information available at the end of September 2022, the forecast overspend on the Schools Budget had gone up to £7.671m.  This followed a number of years of overspending and a £17.011m cumulative deficit was currently being forecast for 31 March 2023. 

The Forum queried the underspend on SEN provisions and support services.  Cheryl Eyre had provided a written response detailing the following budgets which made up the underspend:

·       The sensory consortium – this included some small room hire costs for consortium staff, but the majority of the underspend was from the family psychotherapist post which has not been filled, accounting for £59,000 of the underspend

·       Speech & Language Therapy (SALT) contract with NHS Berkshire costing £205,000 per year, plus room hire.  There was a budget of £231,000 so this accounted for an underspend of £18,000

·       Occupational Therapy (OT) contract with NHS Berkshire – no invoices had been paid for this financial year.  This was due to cost £37,000 a year from a budget of £47,000

·       Integrated therapies at The Rise – the budget was to increase the NHS contract when The Rise was set up; however, in the last two years the council had not been charged any additional money by NHS Berkshire having been told that the work was covered by the initial contract.  The £22,000 budget has therefore remained unspent.  In addition to this, the council also received income from other LAs based at The Rise and last year we received around £20,000, so the forecast for the year showed a £42,000 underspend.

The Forum highlighted that the underspend included therapeutic services and sought reassurance that the budget would not be reduced.  Paul Clark explained that the council was not intending to remove those budgets but had experienced difficulty in recruiting to some of the posts, hence the underspendings.  At the end of the financial year, all overspend and underspend across the HNB would be aggregated and carried forward to the following year.  The budget proposals would set out the current budgets at a detailed service level and show if the proposals for 2023-24 referred to an increase or decrease, so there would be transparency about any proposed changes which the Forum would be asked to comment on. 

The Forum asked for clarification on the £22.8m forecast debt and whether the council was still expected to manage the debt from 1 April 2023.  Paul Clark replied that, the original position was that LAs would be expected to manage the cumulative debt from their own resources by April 2023.  However, evidence had proved through financial reviews that it was unrealistic to expect LAs to finance their deficits at this stage and the information that had been informally shared so far with County Treasurers was that the requirement for LAs to take back the debt would be extended so that liability would remain with the DfE, although there had been no announcements as to how long it would be extended.  Regarding the day-to-day practical implication on the Schools’ Budget, the council would have to manage any debt charges via its reserves so it would not have a direct impact on the Schools Budget.  However, in terms of getting into a position to pay back the debt, that was a significant concern, and the council was not yet at a stage where it had developed a plan to balance the budget.

RESOLVED to NOTE:

1.     the budget variances being forecast on the Schools’ Budget that total to an aggregate net forecast over spending of £7.671m (paragraph 6.14 of the report);

2.     that the year-end balance held in the Dedicated Schools Grant Adjustment Account is forecast at a deficit of £17.011m deficit (paragraph 6.14 of the report);

3.     the possibility that liability to fund balances held in the Dedicated Schools Grant Adjustment Account would transfer to LAs from April 2023 (paragraphs 6.18 to 6.19 of the report); and

4.     progress to date on the Education Capital Programme, as summarised at Annex 2 of the report.

The Forum also noted its deep concerns about how this would be managed going forward and the potential impact not only on SEN students but all students within the Borough.