To update the Forum on the level of balances held by maintained schools as at 31 March 2021, how these compare to the previous financial year, in particular through the impact of the coronavirus pandemic, 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 2021 and how they compared to the previous financial year (in particular through the impact of the coronavirus pandemic).
Paul Clark highlighted that, against expectations, aggregate surplus balances had nearly doubled during the year and on average schools held a 3.6% surplus compared to annual income. However, six schools had deficit balances and five schools had surpluses below the 3% level recommended to be able to safely manage unforeseen in-year pressures. Overall, deficits had reduced which was positive.
Paul Clark explained that information provided by schools now indicated that in general the pandemic had helped balances as a number of schools made one-off savings on areas such as staffing and general resources as well as some intended projects needing to be deferred to 2021-22.
Paul Clark explained that eight schools had a significant surplus of funds. The Forum had previously agreed a claw-back scheme where significant balances were not being held for a valid purpose or if the surpluses were above the maximum cap. However, schools were permitted to make applications to retain funds where they were held for appropriate purposes and all relevant schools had provided such an assurance.
Uplands Primary School was the only school with a surplus balance above the maximum cap and its governors had submitted a request to retain this amount as it related to funds held in respect of the Teaching School which provided services to support all Bracknell Forest schools. Therefore, the recommendation was to retain that surplus and make an amendment to the policy moving forward to exclude any surplus generated from this activity from the normal calculation of the school’s surplus balance.
Paul Clark reported that the schools which had significant surplus balances at the end of 2019/20 have confirmed that they had spent the money as planned. Forum members had previously requested more information on the frequency that individual schools generated a significant surplus. The report showed that two schools had generated a significant surplus balance in each of the past five years, and two schools had generated a significant surplus for three consecutive years. Over the last five years, 13 different schools have reported significant surplus balances.
The Forum sought clarification on what the activity of the Teaching School at Uplands Primary School would be referred to as. Paul Clark replied that it would be referred to as activity that performs borough-wide benefit for more than one school.
1. to NOTE
1.1 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 increased by £1.041m to £2.141m (+95%);
ii. the value of surplus balances has increased by £0.768m to £2.971m;
iii. the value of deficit balances has reduced by £0.273m to £0.830m which continues to require careful monitoring;
iv. significant surplus school balances have increased by £0.203m to £0.452m (81%);
v. at 3.6%, average balances are considered to be slightly above the minimum level required for working balances to safely cover unforeseen circumstances;
vi. the three-year average change shows net balances in:
a. primary schools deteriorated by £0.488m to £1.562m surplus (-24%);
b. secondary schools improved by £0.959m to £0.268m surplus; and
c. specialist providers deteriorated by £0.059m to £0.311m surplus (-16%);
vii. that £0.730m of surplus balances are estimated to arise from the impact of the coronavirus pandemic:
a. £0.465m from one-off savings; and
b. £0.265m arising from having to defer spending plans to 2021-22; and
viii. the intention to amend the claw-back scheme to exclude from surplus balances calculations funds held from activities supporting a number of schools across the borough, such as the Teaching School; and
1.2 initial school spending plans anticipate £1.104m of funding to be set aside for recovery; and
2. to AGREE
2.1 that the entire significant surplus balances held by schools has been assigned for relevant purposes as set out in the approved scheme and should not be subject to claw back (paragraph 6.20 of the report); and
2.2 that the £0.048m of surplus above the maximum cap held by Uplands Primary School is retained to meet the financial obligations arising from the Teaching School.