Issue - meetings

To consider the attached report of the Assistant Director, Finance

Consideration was given to a report from Director of Education (Tameside and Stockport) and the Assistant Director, Finance, which provided an update on the surplus balances held by schools at the end of the 2021-22 financial year.

Members were informed that overall balances had reduced by £0.060m or 1% compared to 2020-21.  It was noted that primary balances had reduced £1.240m or 20% and that this was partly due to the term time only back pay primary schools had to absorb in 2021-22.  Secondary balances had increased by £1.200m or 70%.  Special school balances had reduced by £0.020m or 1%.  Again, this was, in part, attributable to the impact of term time only back pay.

It was explained that there were 17 schools with excess surplus balances at the end of 2021-22.  These schools had either exceeded the approved surplus balance submitted to the Local Authority in June 2021, or the school didn’t submit a return to hold balances above the sector threshold but their year-end actual balances had been above the threshold.  In line with the Balance Mechanism Scheme, clawing these excess balances back at a rate of 50% would mean that £348,327 could potentially be clawed back.

Members were reminded that the Capital Reserve Scheme had previously been introduced and a request to utilise this had been received from 2 schools with a total ear-marked reserve of £390,000.

It was explained that the 17 schools at risk of potential claw back had been written to and this had been raised with Schools’ Funding Group on 18 May 2022, who, although they acknowledged the pressures facing schools, supported the recommendation to invoke the clawback for 2021-22 balances.

Discussion ensued in relation to exceptional circumstances and the transfer of balances to capital reserve for 3 years. 

RESOLVED

(i)  That the contents of the report be noted

(ii) That the clawback mechanism for 2021-22 surplus balances be approved, in principle, with exceptions to be further discussed at the next meeting of Schools’ Forum