Agenda item

To provide an update on the 2021-22 forecast budget monitoring position for the Schools Budget, to be aware of key issues and management actions being taken and progress to date on the Education Capital Programme.

The Forum considered a report which updated on the 2021-22 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.

The Chair introduced this Item as he had asked a question previously about who was responsible for overspend and the Forum had understood that the DfE had assumed responsibility for the overspend. However, this report conveys the message that the LA was expected to be responsible for the deficit from March 2023.

Paul Clark explained that this was an annual report and was based on revenue data from the end of September so there was a small lag. The key message was that budget difficulty had worsened on the HNB budget. The data forecasted an overspend on the Schools Budget of almost £7.6m. This was on top of the pre-existing £2.6m deficit held in the Dedicated Schools Grant Adjustment Account.

The DfE had originally put in place a regulation to confirm central government liability of any deficit for a 3-year period. It had now confirmed that the expectation was that LAs would pick up liability for any deficits from March 2023, out of their available resources. Therefore, the council needed to start planning how to cover that debt. BFC had some balances that they managed to maintain but it was still expected to be a significant challenge to cover the deficit.

BFC staff and the Executive Member had completed 2 sessions with the Education and Skills Funding Agency (ESFA) on the current deficit position in BF and a further meeting was scheduled for December to talk in more detail about the planned approach. Paul Clark explained that it would take time to see the output and cost reduction and some measures would require investment to start with.

The Forum noted that the deficit at the point of transfer was expected to be £20.4m and asked whether BFC would be responsible for paying that debt or whether it would start from nil. Paul Clark explained that whatever the debt was at the point of transfer would be the responsibility of the council to finance. It was expected that there would be some money from the ESFA to cover some of the deficit.

The Chair asked where the money could be found from. Paul Clark confirmed that there was no requirement from the Government as to where the debt must be financed from and it would be a council decision in consultation with schools forums. There was no specification of how or when to pay the debt off but there needed to be an adequate plan signed off by the Council’s Director of Finance showing that the deficit was being managed.

The Chair highlighted that paragraph 6.15 of the report seemed to attribute responsibility for the overspend to increases in pupil needs and the rising costs of support. However, having been a member of the Forum for a long time, he had seen lots of different plans created by BFC Directors which had lost momentum and been disregarded when new Directors had taken over. A report from June 2016 criticised BFC for a lack of data, a lack of leadership, partnership-working, strategy, and communication. This was then followed by a period of transformation for the whole of BFC, and whilst BFC may have saved some money overall, this appeared to have rebounded on the HNB which had lost key members of staff and the momentum to continue with plans. BFC had faced the same issues since 2012, so the Chair did not consider that the problems were just caused by an increase in numbers and felt that BFC needed to take responsibility for how it had managed the HNB over a number of years.

The Forum asked for clarification of the responsibilities of the Forum. Paul Clark replied that the LA had decision-making power around financial decisions, but it was good practice to consult the Schools Forum. The practice at BFC had always been that the budget was set on recommendations agreed by the Forum. The DfE guidance was shared at the meeting.

Councillor Barnard expressed that all LAs had been wrestling with this and all that could be done was to collectively work as hard as possible to address the issues. Councillor Barnard felt that there was a greater vigour to get things done this time around, but he accepted the point raised by the Chair about how things had been managed before. However, he did not feel that the work done by the consultants had been wasted. The council would continue to learn and do their best to manage the issues.

The Forum asked whether it was necessary to plan on having a dramatically lower HNB budget as it would be unlikely in the long term to be allowed to continue to overspend on the budget. Paul Clark replied that was difficult to answer now as he was expecting the deficit to reduce over the next few years and there could also be funding increases. A lot would depend on how effective the program of reform was. The council would not be expected to balance the budget straight away. The Forum was still concerned about how to achieve such a dramatic decrease in spending. The Chair noted that point but asked to move forward with the meeting as this could not be resolved without more information.

Nichola Jones felt that the fundamental first step to get a grip on HNB spending was for schools to understand that the overspend was not just a problem for the LA and that actions schools take had an impact. This Forum was the best mechanism to understand the issues and work out how to collectively solve them. The Forum expressed that, when Headteachers submit their provision maps, they should reflect the needs, and the Forum hoped that it was not the case that there would be less money going to schools. Nichola Jones confirmed that was not the case and shared that BFC’s focus was on investment in early help and working with school leaders to get to that point.

RESOLVED to NOTE

1.     the budget variances being forecast on the Schools Budget that total to an aggregate net forecast over spending of £7.598m (paragraph 6.12 of the report);

2.     that the year-end balance held in the Dedicated Schools Grant Adjustment Account is forecast at a £10.224m deficit (paragraph 6.12 of the report);

3.     the possibility that liability to fund balance held in the Dedicated Schools Grant Adjustment Account will transfer to LAs from April 2023 (paragraph 6.18 of the report);

4.     the council is in discussions with the Department for Education relating to the management for the High Needs Block deficit (paragraph 6.21 of the report); and

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