Agenda item

To update members on the level of balances held by maintained schools as at 31 March 2023, how these compare to the previous financial year, and to consider whether any significant surplus balances should be subject to claw-back and re-invested within the overall Schools Budget.

The Forum considered a report which updated on the level of balances held by maintained schools as of 31 March 2023, how

these compared to the previous financial year and considered whether any significant surplus balances should be subject to claw-back and re-invested within the overall Schools Budget.

Paul Clark explained that Crowthorne Primary school had a significant surplus balance which exceeded the maximum cap, meaning that the surplus balance could be deducted.  However, the policy allowed for schools to request to retain the surplus, and the Headteacher of Crowthorne Primary had made such a request.  If the Forum decided that any of the income above the cap should be clawed-back, the school could appeal to the Executive Director. 

In general, school balances reduced during 2022-23.  Average balances were at 4.4% of annual income.  However, there were differences between primary and secondary phases with primary schools getting close to the level where it would be difficult to manage in-year emergencies. 

The Chair highlighted an issue regarding the energy contract which was not included in the report.  Stuart had written to the LA on behalf of the Forum to query whether the current energy contract delivered the best value, whether they could withdraw from the contract as it was significantly above market prices and raised concerns about the fact that prices were only shared with schools after the auto renewal period.  Stuart had a response from Richard Skegg stating that they procure through Crown Commercial Services and had to follow the contract available.  The contract had previously delivered good value to schools, but Richard recognised that this had not been the case in the short term.  Richard also acknowledged about the need for transparency and pledged to resolve this.  Richard confirmed that, to exit the contract, 12 months’ notice was needed at the start of the financial year.  As notice was not given at the start of this financial year, schools were tied into the contract until at least 2025. 

RESOLVED

1.    to NOTE

         I.        the key performance information on school balances, as set out in paragraph 6.3 of the report, and in particular:

i.        aggregate surplus balances have decreased by £0.182mm to £2.306m (-7%);

ii.       the value of surplus balances has decreased by £0.097m to £2.910m;

iii.      the value of deficit balances has increased by £0.085m to £0.603m which continues to require careful monitoring;

iv.     significant surplus school balances have increased by £0.024m to £0.596m (+4%); and

v.       at 4.4%, average balances are considered to be above the minimum level required for working balances to safely cover unforeseen circumstances; and

        II.        the requirement to complete an Action Plan for the Department for Education in respect of schools with deficits in excess of 5% of income, based on 2021-22 accounts (paragraph 6.19 of the report); and

2.    to AGREE

         I.        that the entire significant surplus balances held by schools up to the cap permitted in the claw-back scheme has been assigned for relevant purposes as set out in the approved scheme and should not be subject to claw-back (paragraph 6.12 of the report); and

        II.        that no amount of the significant surplus balance above the cap permitted in the claw- back scheme should be removed from Crowthorne Primary School (paragraph 6.16 of the report).