The Forum considered the report regarding the budget outturn and 2020/21 school balances.

James Norris (Head of Finance AFC) introduced the report as an update on the finances of both central school’s Dedicated School’s Grant (DSG) budgets and maintained school balances over the last financial year of 2021, which ended 31^st March 2021. A final deficit position of £766,000 overspend was reported. 

The biggest area of overspend was the high needs block, especially a high increase during the 3^rd quarter of the financial year. James Norris also informed that towards the end of the financial year there was a change in the funding for the early needs block.

There was an overspend of £441,000, however this was in line with what had been forecasted to be spent over the year. All forecasts were based upon the knowledge that a DSG grant of just over £800,000 would be given, but in March officials were informed that the money would be received in the following financial year instead. A surplus of £808,000 could then be seen for the current financial year, having taken this grant into account.

Over the 2 financial years, the impact of this will be nil and the deficit or surplus is nothing alarming. This would be monitored closely.

Net deficit for financial year was just under £1.791 million, 1.4% over.  James Norris then asked the Chairman if there were any questions.

The Chairman asked where the RBWM stood as a borough compared to neighbours, within the South-East. James Norris stated that the RBWM were not in a bad situation compared to neighbours such as Kingston or Richmond. The trajectory that the RBWM was on, showed a potential deficit of 2.6% by the end of the financial year.

The Chairman asked if there was any news from the government on if there were any plans regarding high needs. Kevin McDaniel, Director of Children’s Services, informed that there had not been any firm commitments from the government regarding this.

Chris Tomes asked for clarification on the surplus of £808,000 and the overspend of £441,000. James Norris explained with reference to table 1 that once the financial year ends, there would be more transparency visible between the two years.

The Chairman asked if the £808,000 is definite or if the Department of Education (DfE) could change the goal posts. James Norris confirmed that this is in writing, however it is the borough’s calculation. Therefore, this figure was an estimate with a 10% threshold either way, as to how much the final figure will be. James Norris said that hopefully over next 6 weeks, a final figure would be hopefully made available.

(Councillor Bhangra joined the meeting)

James Norris informed the forum that a surplus had been seen in the maintained school balances, increasing from 1.5 million to 2.2 million. He noted that it was important to state that some schools were operating with a deficit of 24% of their budgets. Whilst others were in a surplus position of up to 30% of their school budgets. All sectors moved favourably, except the primary area. This was mainly due to in-comparable results. Marginal surplus seen at the end of March 2021.

The Chairman asked at what point does the borough need to begin clawing back money from schools. Kevin McDaniel said that now was the time to start thinking about attempting to claw back money. He insisted that moving money from surplus schools to deficit schools would not be correct, as it would not encourage the correct financial management. Instead supporting deficit schools, whilst levelling off some surplus schools in his opinion would be more suitable.

The Chairman asked Kevin McDaniel what the next steps would be. The Forum were informed that the excess balance decision would need to be a forum decision rather than an official borough decision. Discussions would potentially be needed on guidance of what the money would be used on and where it is obtained from. Only maintained schools would be included within this.

James Norris said that there was a balance of £460,000 which maintained schools had paid into, and this money would be evaluated for its best purpose later in October.

(Councillor Singh joined the meeting)

Councillor Stimson asked if there was the same behaviour every year with regards to budgets.  Kevin McDaniel informed that if there was reason to believe poor handling of budgets in schools, then the borough would take action. Kevin McDaniel said there was currently no school on this list.

Resolved unanimously: that the Schools Forum notes the report including the reported variance. Deficit balance carried forward, maintained schools’ balances and de-delegated balances as at 31 March 2021.