Agenda item

The Schools Forum was presented with the Maintained Schools excess balances, reported in June 2024. 

It was reported that whilst schools balances were still required to be reported to the Schools Forum no excess surplus balance limits were currently in place.  However, the Schools Forum retained the right to require schools to provide further information as to how their balance would be spent, if this was requested.

The Schools Financial Value Standard (SFVS) states that schools were expected to sustain ‘reasonable’ levels of surplus balances and must demonstrate ‘value for money’ through effective plans for spending their budgets.

Representatives were referred to Appendix A, which showed the revenue balances for each Maintained school, along with their 2022-23 comparison.  It was noted that the overall net surplus school budget balances position for Halton’s maintained schools at the end of 2023-24 was £6,519,071.

The Forum discussed the adoption of the proposed Halton Borough Council School Balances and Clawback Guidance 2024-25, which was presented in Appendix C.  Appendix B showed the clawback calculations although it was noted that these required some refinement now.

It was confirmed for Representatives that Halton had never previously had a clawback policy in place.  However, schools excess balances were kept to within Government guidelines of a recommended 5%  for primary, 8% for secondary, until this requirement was removed some years ago.

The following comments and concerns were raised during consideration of the adoption of the clawback policy and consideration of options 1, 2 and 3, as outlined in the report:

·       Each school had its own unique circumstances and reasons for surplus carry overs, which may be committed to spend the following year;

·       Consideration should be given to the increasing complex needs of some children being supported in the maintained sector and the additional costs of this being incurred by schools;

·       If schools knew that their surplus balances were to be clawed back, they would endeavour to spend the surplus before it could be taken;

·       If the £1m was clawed back and put back into the DSG there was currently no clarity on where it would be spent;

·       The policy would only apply to Maintained schools – the LA does not have authority over academy surplus balances;

·       Implementation of this policy may encourage schools to convert to academy status; and

·       It was confirmed that special schools would also be subject to the policy.

Officers advised that the majority of local authorities in the area operated a clawback policy and it was only right that each year’s allocation of DSG funding should be spent by schools on the children, as it was intended. 

Also, it was important to note that most schools carried out efficient budgeting and a surplus carry over policy would encourage this further.  It was commented that there would be exemptions allowed for some schools with surplus carry overs, eg. those with secured contracts for future refurbishment.  

The non-academy Forum members proceeded to a vote on the three options and it was unanimously agreed that option 3 be implemented – requesting schools to justify the excess balances with information to be submitted on the planned use of their excess school balance.

RESOLVED:  That Schools Forum approves the implementation of Option 3, as mentioned above.  An updated procedure for clawback in line with this decision would be presented at a future meeting.