To receive and consider a report giving details of the schools’ current financial position.
Katherine Vernon, Schools Finance Manager presented the 2020/21 Revenue Monitoring report.
Katherine Vernon stated that an in-year deficit of £2.9m was projected, with the budget pressure continuing to be within the HNB. Taken with the brought forward deficit of £3.36m, a forecast cumulative deficit of £6.26m was now projected.
Katherine Vernon stated that the increase £289k from what was reported in October was due to increased numbers and cost of: Education Health and Care Plans (EHCP) in mainstream schools; out of borough placements and post 16 placements that were received in-year.
Katherine Vernon stated that all schools’ forecasts had now been received and as predicted schools’ budgets had been negatively impacted by the Covid-19 pandemic. However, it seemed that this impact was not as bad as initially anticipated. Seven schools were now predicting a deficit position.
Katherine Vernon stated that schools that converted to academies took their balance with them so the balance on schools reserves was £2.8m.
During the discussion of this item the following comments were made:
· Katherine Vernon stated that it was hard to say exactly what impact Covid-19 had had on schools’ budgets;
· Lynne Samuel stated that schools had been doing a lot of work to offset the difficulties created by Covid-19. It would take a long time to work out the real impact of Covid-19 on this year’s budgets, there was a big range of circumstances to be considered;
· Liz Woodard stated that her school had lost around £100k in income from play clubs, so the school had had to stop improvement projects to avoid going into deficit. She also stated that it was not wise to go too low on reserves (below 4% to access government funding), so the funding from the government was in reality not accessible;
· Katherine Vernon confirmed that maintained schools had reported significant loss of income as a result of the pandemic, in the region of £600k;
· Carole Simpson stated that as well as offsetting the loss of income with not undertaking discretionary activities, staff were not being replaced that would otherwise have been replaced;
· Brian Prebble added that there was a cost with staff that could not be furloughed.
The Chairman stated that the £2.9m in-year variance in the Budget was very significant, he believed that the HNB Forecast Budget (which was not balanced) generated shortly after the Budget was submitted would be showing an overall deficit close to this variance figure, and whilst disappointing, this shortfall had been predicted. However, the DfE required the Local Authority to submit a balanced Budget each year. He asked that a forecast column (reflecting the March 2020 Forescast) be included in the report for the January meeting.
1) The report be noted; and
2) A forecast column will be added to the next report.