Agenda item

·             Vera Njegic  and Neil Hardwick to report.

Vera Njegic, Schools’ Finance, introduced the report which detailed the 2018/19 outturn position of the dedicated schools grant (DSG).

A summary was provided of the surplus/deficit balances of the maintained schools within Rotherham and information in respect of pupil-led funding recovered as a result of permanent exclusions.

From the information it was noted that the Council's expenditure on schools was funded primarily by grant monies provided by the Education and Skills Funding Agency, the dedicated Schools Grant (DSG). DSG was ring fenced and could only be applied to meet expenditure properly included in the Schools Budget, as defined in the School Finance and Early Years (England) Regulations 2018. The Schools Budget included elements for a range of educational services provided on an authority-wide basis and for the Individual Schools Budget, which was divided into a budget share for each maintained School.

With regards to individual school budgets it was pointed out that within the Rotherham Scheme for financing schools, individual schools were permitted to carry forward balances to be spent or replenished in subsequent financial years.  In total, the carry forward on individual school budgets was an overall combined surplus of £3.490 m.

It was also noted that the 2018/19 accounts also included the 2017/18 early years adjustment from the January, 2018 census of £336k which authorities were notified of in Summer, 2018 (after the 2017/18 statement of accounts had been compiled), but the DSG note to the accounts, however, was updated to include this.

Of the total 2018/19 surplus balances, eleven schools held balances above the thresholds set out in the Scheme for Financing Schools. The Scheme for Financing Schools set out the financial arrangement between the local authority and the maintained schools and stated that if a school’s balance exceeded the allowable surplus (8% of school budget share for nursery, primary and special, 5% for secondary) and allowing for commitments and any amounts assigned for a specific purpose, then the Local Authority may deduct an amount equal to the excess balance.

Of the ten schools that were previously identified to be in deficit, three have now entered a surplus balance position, two now have academy status with a cumulative deficit balance of £218k and five schools remain in deficit.

Two schools that were previously in surplus have now entered a deficit position and meetings were taking place between the school, Finance, HR and School Improvement Service colleagues to determine the appropriate way forwards.

For all schools that were in a deficit position, individual three year budget recovery plans were in the process of being compiled. These would then be subject to formal review throughout the year.

The Forum considered the detail and noted that the excess surplus balances process had not been applied recently.

It was suggested that Academies could present their year end balances at the School Forum meeting in November.

The report also outlined that £93,051 had been recovered from individual schools and academies who permanently excluded pupils during 2018/19 financial year. Due to the increasing number of permanent exclusions, this was a 6% increase from 2017/18. This funding was utilised to reduce the amount of high needs block DSG funding required to fund the pupil referral units.

There were a couple of schools who had outstanding invoices, recovery action was being progressed. Some schools were under the impression if pupils were not included on the October census then they did not have to pay.  It was clarified that this was not the case and all schools that excluded pupils would be charged.

Agreed:-  (1)  That the information particularly in relation to the reserve balances increasing to £15.1m (centrally retained) be noted.

(2)  That the deficit balance, subject to change as a result of the early years adjustment for the Spring 2019 census count with an anticipated clawback of £26k, be noted.