Agenda item

To receive and consider a report containing details of the draft year end 2016/17 closure.

The Draft Year End 2016/17 Closure report and Appendixes were tabled at the meeting by Hawa Bedwa, Schools Finance Manager.

Elaine Stewart pointed out that the reports in the Agenda for this meeting were all marked ‘to follow’.  In the past Schools Forum had been cancelled when reports were not available prior to the meeting as members did not have enough time to consider them.  The Chairman agreed that the reports had not been delivered in a timely manner, but due to the importance of the items to be discussed, he had decided to go ahead with the meeting.

Councillor Dolinski stated that it was unacceptable to elected Members to receive agendas with ‘to follow’ items.  He stated that the Executive Member for Finance was aware and concerned about the late delivery of reports to Schools Forum.  However, there were a number of critical issues that needed to be discussed with Forum.  Councillor Dolinski stated that he was not prepared to accept late reports in the future.

The Chairman adjourned the meeting for five minutes so that Members could read the report.

Hawa apologised for the lateness in delivering the report and explained that this was due to work pressures and not having sufficient resources available to achieve deadlines.

Hawa stated that instead of doing a normal monitoring and providing a forecast, she had reported a snapshot of actuals that were posted to date, so these were projected figures for year-end closure position.  Hawa accepted that there had been variations in the reporting of figures and she was undertaking work to make sure there was a consistent trail of movements going forward.  In order to do that it was necessary to reconcile systems, forecasts and reports.

Hawa stated that regarding the budget summary, the Budget was as set at the beginning of the year.  There were variances to forecast reflected in the actuals to date.  The bottom line figure was accurate but it may be necessary to move transactions from one line to another.  This seemed to be the result of earlier posting to different lines for different items. 

Hawa explained that the initial DSG Budget for income was set at a level lower than the final allocation settlement received; the improvement had been incorporated in the figures reported and was why the actuals seemed higher.  These changes had been passed on to schools.

In response to a question Hawa stated that the budget was set based on an indicative settlement.  Hawa believed that in the past the final settlement, when published in July each year had not been formally presented to Schools Forum.

In response to a question Hawa stated that the Budget setting followed this pattern: the indicative Budget was set in December; in January the draft Budget was presented to Schools Forum for agreement and submission to DFE/EFA and in July the final settlement was received from DFE.  In future Hawa would like to share the final settlement with Schools Forum and explain how variances are mitigated.  If this practice was agreed, the budget could be revised and variances explained.

The Chairman noted that variances in the Budget had incorporated mid-year figures and that these variances had not been formally reported previously, he welcomed the greater transparency.  He explained that because the Budget allocation to schools once agreed was fixed for the year, any changes/ variances identified mid-year could only be addressed in the following year. 

In response to a question Hawa stated that it was difficult to predict mid-year variations, some of these had arrived as a result of schools ‘academisation’ during a year, for example.  Jane Winterbone confirmed that in her experience it was not possible to predict final settlements based on history.  Jane and Hawa advised that it was critical to inform Forum on the final settlement, revised figures and options.

Janet Perry asked about the difference in the carry forward figure presented today compared to the previous report.  Hawa stated that the differences related to three transactions which were listed in Appendix C of her report.  Hawa explained that there was still an overall surplus and the reason for the difference was that some transactions which had not been anticipated had now been received.  Hawa predicted that a surplus of £500k was going to be achieved, which was very close to the figure presented to Schools Forum in previous meetings.

Hawa stated that she was striving to provide more consistency in reporting for 2017/18.

John Bayes requested that the conventional method of reporting to show positives and negatives be used.  He also questioned some lines in the report.  Hawa agreed to meet him outside of the meeting to clarify any issues.

Hawa went through Appendix B - Schools Block and Early Years Contingencies.  Schools Block had a variance of around £100K from last month.  The re-evaluation for business rate for Ambleside Centre had now been received; the increased expenditure item had not been budgeted.  This item was posted to contingencies. It was anticipated that £340K of the contingency would be spent.

The Chairman believed that business rates were recoupable as opposed to a direct cost, as per previous discussions.  Hawa stated that business rates were allocated to schools budget directly as part of APT allocations and presented to Schools Forum.  The reason for the decision to put allocation revaluations to contingencies was that it was not certain what the revaluation figure would be.  Hawa stated that she would meet with the business rate team to ascertain the possibility recovering this money.  This equated to £197k to date of the £340K budget, so this was a significant amount of money.  Hawa stated that if this was recoupable, it would be.  Hawa agreed to investigate and report back to Schools Forum.

Janet Perry asked if the money recouped was refunded directly to the Local Authority.  Hawa agreed to double check and report back. The final reporting would be in May.

The Chairman asked that Hawa changed the description from ‘anticipated spend’ to unallocated contingency.

The Chairman stated that the greater transparency was welcome, but a better methodology in terms of receiving the reports in a timely manner was important in order to make sure Schools Forum meetings were more effective.

Hawa gave a brief explanation of Appendix C – Growth Spend Analysis.  She stated that the initial budget was £1.2 million, the projects were costed at £1.4 million, every costing was being evaluated to try and find savings to offset the difference.  £39K had been identified in savings, but if this did not materialise, Schools Forum may be asked for an increase in the budget.

Keith McConaghy asked the reason for the budget increase for Shinfield West if the school was not going to open in September.  Hawa believed this was because the money had already been committed.  Piers Brunning, Service Manager, Policy, Strategy & Partnerships explained that the intention was that the school was going to open in September 2017 and a number of families had applied for a place at that school.  Subsequently a decision was made not to open the school because the school was not viable.  Jane Winterbone believed this increase related to the programme cost according to decisions that were made in relation to growth and expansion rather than the budget.

Janet Perry stated that the change / increase in the budget for growth spend had not been agreed by Schools Forum.

Ginny Rhodes asked for further detail about the increase in the budget for Montague Park School.  Piers explained that this was a new school and as such had higher levels of spend initially. The school had started last year with one class in temporary premises and moved during the course of the year to permanent premises.  Piers was not able to provide further financial detail.  Jane Winterbone noted that it seemed that the increase in budget for this school had not been reported and explained to Schools Forum.  Jane agreed to investigate the reason for the increase and report back to Schools Forum.

Members noted that the original budget for Hawkedon had significantly reduced.  It seemed that original projected budgets were often not accurate.

John Bayes wished to have more detail and clarity around the differences between academies and maintained schools growth fund budgets.  He accepted that they involved different expenses but it was important to know what they were.

Members were in agreement that more transparency was needed.  Members pointed out that Schools Forum had been requesting more information about the secondary school place strategy for the last 12 months.  Members were concerned that three secondary schools in the Borough now had huge vacancies in Year 7 and were being funded via lagged funding.  Jane Winterbone stated that she was in conversation with schools in regards to Published Admission Numbers (PAN) and school place strategy.  She recognised that there was tension in the system and that it was important to continue negotiations with schools.

Hawa stated that Appendix D outlined the timetable for year-end closure.  She had sent the final system reports to schools to meet the 28 March deadline and was awaiting responses.  Hawa would report back to Schools Forum accordingly.

Jane Winterbone stated that she had concerns over the High Needs Block and offered to undertake forensic analysis and report back to Schools Forum.

Corrina Gillard stated that specialist resource spaces in schools were filling up.  This may result in more children having to attend independent schools, which would have an implication on the High Needs Block.

Hawa reported an improvement in Independent Special Schools; she stated that there had been a reduction from £6.4 million to £6.1 million. 

RESOLVED That:

1)     The conventional method of reporting income and expenditure would be used in future reports;

2)     Reports would be dispatched in a timely manner;

3)     The final budget settlement from the DFE would be shared with Schools Forum every year;

4)     Hawa Bedwa would confirm if it was possible to recoup the additional in-year changes to business rates from the DfE;

5)     A report containing a detailed analysis of growth fund would be presented to Schools Forum;

6)     A report containing a detailed analysis of High Needs Block would be presented to Schools Forum.