Agenda item

To consider the attached report of the Assistant Director, Finance and Director, Education (Tameside and Stockport).

Consideration was given to a report of the Assistant Director of Finance and  Director of Education (Tameside and Stockport), which provided an update on the surplus balances held by schools at the end of 2020-21 financial year. 

Following the previous meeting of Schools’ Forum, Members were reminded that there were currently 12 schools, which were identified as having excess surplus balances at risk of claw back.  As Members had requested a further detailed review of any exceptional circumstances prior to taking any decision, this was provided.

It was noted that 6 of the 12 schools were holding capital balances due to delays, which equated to £406,078.  The remaining 6 schools held smaller balances, as a result of underspends due to the pandemic, which accrued to £46,423.  It was explained that each of these schools had submitted a return, which had then been reviewed.  It was found that the reasons for these underspends, were generally relating to:

·       Underspends on catering contracts

·      Residential trips

·      Interventions

·      Reduced extra-curricular activities

·      Unspent teaching materials

Members were reminded that, as previously agreed, a Capital Reserve can be set up by the Local Authority, which would allow schools to transfer balances being used to support specific capital projects prior to their completion.

As 2 of the 12 schools identified were holding surplus balances for both capital and general underspend, there were 8 schools holding balances for capital purposes.  Therefore, it was  recommended that School’s Forum request these balances be moved to a Capital Reserve, rather than be removed for clawback and a detailed breakdown of the recommended amounts for transfer was provided in Table 2.

Members noted that all schools had received in-year, additional funding from Government, which may have impacted on them having unanticipated increased balances, for example, Covid Catch-Up Premium.  It was also explained that, for most schools, this had been received in advance of need.  As a result, it was recommended that this be removed from the balances prior to clawback decisions.  Members were, therefore, informed that this would remove £30,104 of the balances of 4 schools from being at risk of clawback, with 2 schools remaining at risk, totalling £16,319.

Members were informed that there had been further developments with regard to term-time only payback for staff under the NJC terms and conditions in Tameside.  It was noted that a report was currently going through the Council’s governance process, which would result in all affected schools needing to incur additional, on-going salary costs and back-pay.  This was something, which it was felt Members may want to take into consideration when making their decisions relating to the clawback mechanism.

Members were also made aware that, following submission of the approved budget plans in May 2021, 12 schools (7 primary, 3 secondary schools and 2 special schools) submitted plans with surplus balances above the sector thresholds for the financial year 2021-22.  These schools had also submitted an approved Utilisation of School Balances form identifying reasons for holding the surplus and the finance team would continue to monitor schools’ balances.

It was stated that a further update would be brought to Forum once school balances for 2021-22 were finalised, when Forum Members would be asked to review any action in line with the Balance Mechanism Scheme regarding invoking the claw back on 2021-22. 

Following the presentation of this report, detailed discussion ensued.  Some Members explained that, whilst they fully supported the notion of clawback and understood the necessity for this, they expressed concern with regard to implementing these measures during what continued to be an uncertain and unprecedented time for schools.  Whilst it was acknowledged that there would be a continued need for this mechanism to be in place and the Capital Reserve to be utilised, many Members felt that now was not an appropriate time to invoke these measures.

RESOLVED

(i)     That the position of Schools Balances 2021-22 be noted

(ii)    That Schools’ Forum reject schools with excess balances in 2020-21, holding them for capital purposes, being required to move these funds to a capital reserve

(iii)  That clawback of surplus balances in 2020-21 subject to any mitigating factors outlined in the report be rejected