Agenda item

Budget Monitoring and Forecast 2020/21

To receive the above report.

Minutes:

James Norris, Head of Finance (RBWM), introduced the report to Members, which set out the financial forecasting for the financial year and the anticipated deficit carried forward. The total funding allocated for 2020/2021 was shown in the report, with £125 million of the funding allocated by Dedicated Schools Grant (DSG) for all schools. £69 million was for academies and direct funding, leaving a net budget of £65 million and an anticipated £208,000 net overspend. There was a projected deficit of £1.3 million at the end of the financial year, which was a similar position reported in July 2020. There had been an underspend of £450,000 in the Schools Block, specifically the Schools Pupil Growth Fund. There was also an underspend of £52,000 on the Central Block due to a restructure in staffing.

 

Discussions were still being undertaken with the Education and Skills Funding Agency (ESFA) to determine the actual level of funding to be received for the Early Years Block for this financial year. However, the forecasted underspend was £100,000 due to the previous financial years underspend. The overspend on the High Needs Block is £810,000 due to an increase in the special education needs funding matrixes and an increase in both the number and complexity of Education, Health and Care Plans (EHCP). In addition, there was a reported underspend on the Schools Growth Fund of £450,000. Overall, the net in-year overspend is £208,000. There is a potential further risk estimated at £70,000, resulting in a total of £1.3 million deficit balance at the end of the financial year.

 

The future actions and next steps included a Deficit Recovery Plan to be submitted to the Department for Education (DfE). The local authority was awaiting a template and forecasted the submission to be by the end of November 2020.

 

The Chairman asked if the School’s Budget would be used by the local authority with the current pandemic and national government pressures. The Forum was informed that there were no plans for the dedicated schools grant budget to be reduced for the time being.

 

The Chairman asked if there was still a potential for school’s underspend to be taken by the authority, and the Forum was informed that this was a potential but was currently paused. Kevin McDaniel, Director of Children’s Services said the dedicated schools grant (DSG) was ring-fenced and therefore there was no risk for the council taking from the fund. The government changed the regulations in 2020 that states the council did not have to cover the DSG deficit, and Schools Forums must have a recovery plan for any DSG deficit. Schools Forum had to have a budget recovery plan that would balance in-year and historical deficit of £1 million. This was going to be a challenging year for the education sector, and he anticipated the DfE’s revised guidance on the current lack of support in COVID-19 related expenses.

 

The Chairman said he was concerned for the potential and frequent changes from DfE and the central government and said there was a need to protect schools to ensure they were not negatively targeted due to a deficit. The Forum was informed that the bigger risk was the national funding formula being implemented sooner than expected, which would take away local decision-making. This would leave the borough with a budget that does not balance.

 

The Forum noted the report.

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