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Council and Democracy

Issue - meetings

Schools Balances

Meeting: 17/12/2019 - Schools' Forum (Item 52)

52 Schools Balances pdf icon PDF 148 KB

To consider the attached report of the Assistant Director of Finance / Assistant Director of Education.


Consideration was given to a report reviewing potential changes that could be made in an approach to managing school balances.  This was following on from a previous report dated October 2019.


In the Schools’ Funding Group, consideration had been given to the reasons as to why excess school balances had previously occurred and the purpose for which schools were holding these.  In response, the report outlined a number of potential changes to the current scheme of balances, including:


  • Increasing the threshold of permitted balances from 8% and 5% retrospectively to 12% in Primary schools and 12% in Secondary Schools
  • Setting up a Capital Fund held by the Local Authority for specific capital schemes
  • Schools’ Forum to use its powers of clawback if balances are held in excess of 2 years (either in full or at 50%)
  • Allocating any clawback to the High Needs Budget, subject to compliance with regulations


It was explained that the group had discussed the possibility of Capital Reserve to be established, for schools and the Local Authority to hold balances for Capital Schemes with an account looking to attract interest, but with restrictions that, if the scheme does not progress, the balance is not to return to the school.  In these cases, the balance would be treated as a surplus balance, subject to clawback.


As previously discussed in Schools’ Forum, invoking the clawback provision could only be applied to Maintained Schools and does not apply to the Academy Sector.  The regulations state that funds clawed back would be shared with all Schools and Academies.


Consideration was given to whether, in exceptional circumstances, there may be instances where there would be an agreement to an exemption of a clawback being invoked and whether there should be a right of appeal for schools in relation to clawback.


Consideration was also given as to whether the decision to clawback would be one that could be brought to Schools’ Forum. However, it was agreed that responsibility for this would lie with the Local Authority and that there would be a clear focus on transparency of process and policy.



(i)   That the Schools’ Forum agrees to increase the limit from 8% and 5% to 12% and 9% and would like an option to contribute to a Capital Reserve

(ii)  School Forum agrees to establishing an interest bearing Capital reserve for Schools with the Local Authority

(iii)That the Schools’ Forum agrees to invoke a clawback clause for surplus school balances from 2019-20

(iv)         That the level of the clawback balance be agreed at 50%

(v)          That exceptional circumstances may be considered with regard to clawback

(vi) That the clawback agreement should be reviewed annually

(vii)                That the Schools’ Forum agrees that any clawback should be allocated to High Needs and that this be clearly identified within the policy.