Agenda item

2020/21 Schools Budget Out-turn


Jenny introduced the report which presents the 2020/21 Schools Budget outturn position and confirms the Dedicated Schools Grant (DSG) Reserve.


Jenny referred to paragraph 4 in the report which outlines a challenging year with significant high needs overspend and the local authority block overspend.  These are two consistent issues one of which is high needs and the other in relation to social care both of which have significant transformation projects looking at their current working format.  Jenny added that of the DSG deficit of £17.5m high needs accounts for £17.5m of the deficit which is offset against a surplus from the schools block which is mainstream school growth funding allocated to the local authority that will be needed as new schools open in future years.  Jenny stated that schools block cannot be used for high needs therefore the commissioning of new places in terms of specialist provision contributes to the deficit.


Jenny referred to paragraphs 11-15 which will be discussed on the next agenda item.  Paragraph 14 refers to the Dedicated Schools Grant ‘Safety Valve’ Agreements and further information has become available from the ESFA about how they are working which Jenny reported to the meeting.


Jane Dawda referred to the tables in paragraph 4/5 and queried the early years block which was £-109 but also asked if there was a reason for the difference in the high needs block which was £10,387 in paragraph 4 but 10,634 in paragraph 5 and the schools block as it is £-3,139 in paragraph 4 but in paragraph 5 it is as £2,923.  Jenny stated that paragraph 4 is the overall financial position and paragraph 5 highlights the significant overspends in the service areas that sit behind them so there will be other minor areas of service that affect the numbers.


Jane Dawda queried paragraph 14 in terms of the Dedicated Schools Grant ‘Safety Valve’ Agreement as it mentions those Local Authorities  who have received the funding as their deficits were in excess of 10% and asked if Leicestershire would be considered for any extra funding.  Jenny stated that these are local authorities where their overall dedicated schools grant was higher than 10% and it is 1.8% in Leicestershire so would not be considered currently by the DfE.  Jenny added that there is no public information about the criteria on why those 5 authorities gained that funding and no national information on DSG balances for local authorities.  It was suggested to the DfE making some benchmarking information available but confirmation of this has not been received.  There may be information available when the 2022/23 funding arrangements are released in July but that is yet to be seen.


Carolyn Lewis commented on how useful the report was and raised a query on paragraph 7 and asked if there was a picture of maintained schools in terms of school balances.  Jenny said that paragraph 6 states that indications are that maintained school balances have risen by £1.7m and if that position is replicated across academies that is suggesting an increase in balances of around £8m across the board.  Jenny said that interestingly colleagues in other local authorities are also reporting that position despite the challenges of last year and therefore may ultimately give some schools issues around the Covid emergency fund in terms of it being clawed back.


Kath Kelly asked in terms of academies and whether or not that picture is replicated is it not possible to draw down the financial position from the financial reports.  Jenny said that this is difficult as it can only be found in published Statements of Accounts for individual Trusts that may only become publicly available in January.  Kath stated that a lot of secondary schools report they are struggling financially and looking at potentially restructuring and over the last 12 months schools have been in a better position than in non-covid times even without the additional government support due to closure and saving on utilities but is not sustainable looking at one year in terms of long-term decisions.  Jenny commented it was difficult to draw any conclusions from the level of school balances as it is a snapshot in any particular point in time.  Jenny informed the meeting that additional resources had been invested in to work with schools to try and understand how schools are planning their budgets and Jenny outlined some of the factors that have been identified.


Graham Bett asked if the £8m can be transferred into a percentage.  Jenny confirmed it was 1.9%.  Graham asked what the total reserves as a percentage would be.  Jenny said that she would need to confirm this as concentration was on the movement between one year and the next and are in the process of the gathering of the Consistent Financial Reporting returns from maintained schools that will split that balance between capital and revenue and then would be able to confirm what the overall percentage for those maintained schools would be.  Graham commented on how the 1.9% was insignificant without the background information.  Jenny agreed as it was just a position in a point in time and it was not clear how much of the 1.9% schools planned to use in later years because of specific projects coming up or staffing issues that needed resolving.  Graham expressed concern that it would been seen that schools have had an increase in their school balances and therefore the interpretation of the narrative would be that schools have additional money.


Jane Moore stated that Graham’s point was important and Kath’s point about the translation of it is important.  Jane clarified that this sharing of information is as a point of information as this is the end position of maintained schools.  The point around the narrative is crucial because it does not necessary depict that there is a system with lots of money and indeed would be wrong of the local authority to translate that across the whole system as the points Kath made about academies so the point is around the narrative but also the wider narrative on what that actually means for the schools.  Jane said it was a valid point to make and that it was important to ensure this is translated into what it means for Leicestershire.


Karen Allen commented that every school is in a unique position and has unique challenges and situations so therefore an overall figure of £1.7m is quite meaningless because some schools will carry a large carry forward for a number of valid reasons and other schools will be struggling.  Karen added it was important not to try and make assumptions in any one sector and in terms of the over cautious planning this was a symptom of a long time of working within a really challenging landscape of underfunding.


Jenny commented that when the initial research was carried out for the school financial capacity work there were conversations with academies as there was only a small sample size from primary schools.  Jenny said she was happy to repeat this exercise to have a more informed position across the academies.  Kath Kelly was happy to support this.


Schools Forum noted the content of this report.


Supporting documents: