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 further review of 2021-22 excess surplus balances at risk of clawback and details of the 2022-23 surplus balances approved in line with the balance mechanism scheme. 

Members were reminded that, at the last meeting of Forum, Members were made aware of 17 schools with excess surplus balances above permitted levels.  Of these, 10 schools had carried an excess surplus balance for 2 consecutive years and, in line with the previously agreed clawback mechanism, 50% of the balance was currently at risk of clawback. 

It was noted that, at the June 2022 meeting, Forum, Members took a decision, in principle, to invoke the claw back mechanism to 2021-22 excess surplus balances, subject to giving schools an opportunity to provide details of any exceptional circumstances.  Members were made aware that the 10 schools at risk of clawback had since been contacted to ask if they wished to put forward exceptional circumstances for consideration.  Responses had been received from 8 of the 10 schools.

Members were provided with an anonymised summary of the correspondence reviewed from schools based on the previous Forum ‘in principle decision’ to claw back and associated recommendations.  The review also included a recommendation on whether the exceptional circumstance had impacted or caused the 2021 excess surplus.

It was recommended that 2 schools were asked to move the funds held to capital reserves in order to support the delayed capital works the schools were due to undertake.  The other 8 letters received outlined what they would spend the balance on, rather than what the exceptional reasons were for still holding the balance.  One school had outlined the reasons for holding higher balances.

Members acknowledged that decisions relating to invoking the clawback were difficult to make.  However, following detailed discussion, they were in agreement that the rules surrounding the clawback mechanism had been designed to be fair and transparent and, with this in mind, they were satisfied that these had been applied correctly, when considering the circumstances of each case.

In relation to 2022-23 surplus balances, Members were advised that 11 schools (9 primary, 1 secondary and 1 special school) had submitted plans with surplus balances above the sector thresholds for the financial year 2022-23.  In line with the Balance Mechanism Scheme, these schools had also submitted an approved Utilisation of School Balances form, which identified the  reasons for holding the surplus and it was noted that the Schools’ Finance Team would continue to monitor the balances in-year with a further update brought to School’s Forum at a later date.

RESOLVED

(i)     That it be agreed no further action is required for school 1

(ii)    That it be agreed the excess balance be clawed back at a rate of 50% for schools 2, 3, 4, 5, 6, 7, 8 and 10 and used to offset the High Needs Deficit

(iii)   That it be agreed the claw back fund from school 9 be moved to the Capital Reserve Fund

(iv)   That the surplus balance position for 2022-23 be noted