Agenda item

Consideration was given to a report of the Director of Resources and the Assistant Director of Education, which provided an update on the surplus balances held by schools at the end of 2022-23 financial year.

Members were made aware that overall balances had increased by £0.453m or 5% compared to 2021-22 and in particular:

•     Primary balances had reduced by £0.395m or -8%

•     Secondary balances had increased by £1.111m or 38% and

•     Special balances had reduced by £0.262m or -19% but this was largely due to an academy conversion

•     The above movement also includes the clawback of schools 2021-22 excess surplus balances of £0.197m and the writing out of balances due to schools converting to academy of £0.330m

Members were reminded that, under the Balance Control Mechanism, a school was classed as carrying an excess surplus balance if their year-end balance had either:

•     exceeded the approved surplus balance submitted to the Local Authority in June 2022

•     or,

•     school didn’t submit a return to hold balances above the sector threshold.

It was noted that a review of the 2022-23 year-end surplus balances had identified 9 schools with excess surplus balances, totalling £0.659m and shown below.  This represented a reduction compared to 2021-22, where there were 17 schools totalling £1.350m.

Members were informed that a number of schools had utilised the Capital Reserve within the scheme and current level of balances held in the Capital Reserve was £1.065m.  This represented an increase on the 2 schools that earmarked a total of £0.390m in 2021-22.

It was stated that all schools with excess balances in either Year 1 or Year 2 had been notified  There were 3 schools at risk of clawback, each of whom had submitted information they wished to be considered as exceptional circumstances, resulting in the excess surplus.

It was explained that views would be gathered from the Schools’ Funding Group, and a recommendation would be brought forward to the September meeting of School’s Forum in order for decisions to be taken in relation to invoking clawback.

Discussion ensued and it was noted that unfunded pay rises also need to be taken into consideration along with bulge years due to increased birth rates, which had significantly impacted some secondary schools, in particular.  It was noted that schools had an opportunity to provide a detailed plan and outline specific reasoning for any surpluses held and that any decisions would need to be taken sensitively and based on the individual circumstances presented.

RESOLVED

(i)  That the contents of the report and the position of schools balances at the end of 2022-23 be noted

(ii)That it be agreed that the decision as to whether to invoke the claw back mechanism for 2022-23 excess surplus balances be brought to School’s Forum in the September meeting