Agenda item

To inform members of the provisional outturn on the 2022-23 Schools Budget, including the allocation of balances and use of Earmarked Reserves.  There is also a brief update on the financial consultation with schools planned for the autumn term to help with initial preparations of the 2024-25 Schools Budget.

The Forum considered a report which sought to inform members of the provisional outturn on the 2022-23 Schools Budget, including the allocation of balances and use of Earmarked Reserves.  These funds were ring-fenced for the support of schools and pupils.  The report also included an update on the financial consultation with schools planned for the

autumn term to help with initial preparations for the 2024-25 Schools Budget.

Paul Clark explained that the outturn was as expected with a significant overspend.  However, this was an improvement on both the outturn from the previous year and the budgeted outturn.  One factor was a decrease in external placements. 

A new reserve had been created for an Early Years Disability Access fund which was a ring-fenced grant which the LA received as part of the DSG. 

Paul also highlighted that the financial responsibility of the debt was due to remain with the DfE to 31 March 2026.  If the current financial position continued, it was expected that the debt would increase to around £35m by time that the liability returned to the council.  However, it was hoped that the DBV project would help mitigate that. 

Paul explained that two additional areas were expected to be included in the 2023 financial consultation with schools.  The first question was around the calculation of notional SEN funding as there was no mandatory calculation that must be applied.  Paul asked for direction on whether all schools should be asked this question or just the HNB subgroup.  The Forum requested that all schools be asked this question.  Paul agreed that this would be included in the consultation with all schools.

The second question was a request for schools to make a financial contribution to the HNB, up to 0.5% of Schools Block DSG income.  Chris Kiernan added that the capital held currently by the council would probably not be sufficient against the number of places that needed to be generated for specialist support.  Whilst the 0.5% could not be used for capital borrowing, it could help other expenditure.  At this stage, the request to Forum was to give their views on whether it was appropriate for schools to be consulted on it.  Chris explained that, following consultation, whether to agree the 0.5% would be the decision of the School’s Forum.  However, if the council did not agree with the decision, it could appeal to the Secretary of State. 

The Forum asked what the current contribution was, and expressed that, if the council were to appeal a decision made by the Forum, this could change the close working relationship where opinions of the Forum were taken seriously by the council.  Chris replied that the current contribution was 0.  The council had absolute respect for the views of the Forum but would not necessarily always share the same view.  Chris clarified that he was not saying the council would appeal but he wanted to ensure that the Forum were aware it was a possibility. 

The Forum asked what it would mean for each of the schools if their Schools Block DSG income was top sliced.  Paul explained that, if it were to be applied in the current financial year, every mainstream school’s budget would be 0.5% smaller.  As a result of further questions, it was established that there was a possibility that this could result in a deficit, but that would be dependent on other things.  The amount each school contributed would be different depending on the size of the school and would be less for 1FE schools.  The Forum expressed concern about having additional deficits. 

Councillor Bailey shared that, nationally, the number of pupils with an EHCP had doubled in the last 8 years which had caused significant budget deficit problems across the country.  There was a need to ensure that the government were aware and that it would support councils with the additional funding required.

The Forum agreed that this question could be consulted on with all schools. 

RESOLVED

1.     to NOTE

          I.       that the outturn expenditure for 2022-23, subject to audit, shows an overspending of £6.006m (paragraph 6.6 of the report);

        II.        the main reasons for budget variances (paragraph 6.8 of the report);

      III.        the cumulative £15.477m deficit balance held in the unusable DSG Adjustment Account, responsibility for which currently rests with the Department for Education to 31 March 2026 (paragraph 6.12 of the report);

      IV.       the in-year funding transfers to and from Earmarked Reserves made in accordance with the relevant policies (paragraph 6.12 of the report); and

       V.       the questions expected to be included on the autumn term 2023 financial consultation with schools and provides feedback; and

2.     to AGREE the formal policy wording associated with the new Early Years Disability Access Reserve as set out in Annex B.