Agenda item

To receive and consider the draft 2016/17 budget.

The Forum considered the draft budget reports which had been sent via email earlier in the week.  Donna stated that the indicative budget had been based on an estimate. However, since the last meeting of the Forum the DSG settlement had been received and was slightly better than anticipated. There was an additional £823,000 Schools Block funding that could be allocated via the formula.  This was based on pupil numbers and therefore it was expected that the funding would continue at the same level in the future.

Donna explained that there had been a cash adjustment based on lagged free schools’ pupil numbers.  The first free school allocation had been received in 2015/16. The DfE had adjusted the 2016/17 funding to reflect the actual pupil numbers as well as based the funding on the actual October census.  It was noted that there had not been an actual increase in pupil numbers.

It was anticipated that there would be an increase in funding for licenses but the cost was also expected to rise.

Donna pointed out the Proforma in appendix A which considered the additional £823,000 as a starting point.  This Proforma had each AWPU rate increased by £18.60 which had the overall impact of reducing MFG from £2.2m in 2015/16 to £1.4m whilst maintaining the 1:1.27 ratio. This would reduce the number of schools receiving MFG from 48 down to 36.  The maximum surplus achievable in this scenario would be £1.2m.

The Forum considered the report, the risks and the scenarios presented.  During the discussion the following comments were made:

·           Members asked if it was possible to run up a deficit. Donna stated that it was, but it would not be possible to allocate this money out to schools through the formula without running the risk of increasing MFG in the following financial year;

·           It was noted that the deprivation factor had been updated by the DfE resulting in a reduction on the number of pupils categorised as living in a deprived area by approximately 500.  This equated to £218,000 in monetary terms;

·           It was pointed out that the MFG could be reduced or removed by the DfE as it was a transitional protection and schools would be in a vulnerable position should this happen.  Appendix B provided a surplus of £800,000 maintaining MFG at a level of £1m, in this case if MFG was removed or reduced the surplus could then be used to offset the MFG impact;

·           The budget was based on the assumption that there would be £800,000 carried forward at the end of this financial year.  There were still three months of transactions to be processed before this could be verified;

·           It was expected that the increase in the national minimum working wage would have a negative impact in the school’s finances and this should be taken into account;

·           The planned housing and schools expansions across the Borough would have an impact in the budget.  As well as bringing additional schools revenue it could bring along pupils with special educational needs.  Such pupils were not funded for their personal needs; the pre-existing High Needs Block would have to cater for them, it was suggested that the Forum may wish to consider setting up a High Needs Block Contingency line within the budget proposal;

·           Robs Stubbs, Head of Finance stated that Wokingham Borough Council planned to continue with the housing expansion programme and it was expected that there would be a 25% increase in housing in the next 10 years;

·           It was agreed by Members that it would be beneficial to reduce the number of schools on MFG;

·           Councillor Ian Pittock stated that schools in Wokingham would not see a reduction in pupil numbers as a result of the new school in Arborfield.  He also said that he was confident that the new school would exceed the 90 pupils initial admission number;

·           Members were of the opinion that children attending school now should not be disadvantaged by reduced funding in their schools in order to subsidise the new schools;

·           It was noted that all options involved a certain level of risk and it was important to find a balanced budget;

·           Donna stated that the £218,000 deprivation factor had been included in the calculations of the proposed budget options;

·           Louisa Gurney stated that at the Primary Headteachers’ meeting it had been agreed to take the £218,000 and add it to the AWPU.

Regarding the deprivation factor, the Forum agreed to keep rates constant in line with Scenario 2 of the report.

Donna recommended that Forum adopted the Proforma found in Appendix B with a reserve of £800,000.  Rob asked Members to be mindful that Wokingham Borough Council had received the worst financial settlement from central government in years, and it was not expected to increase in the near future.  Rob pointed out that the £800,000 reserve should be treated carefully as it was highly unlikely that schools would receive additional funding in the future.

After much debate Donna reminded the Forum that a decision had to be made in order to submit the Proforma to the EFA on the 21 January 2016.  Having considered and debated all the options, the Forum asked Donna to produce a budget which was based on final reserve of circa £500,000, somewhere between the balanced ‘yellow’ budget and the deficit ‘red’ budget.

RESOLVED That:

1)     The deprivation factor of £218,000 be taken with AWPU;

2)         Donna would produce a Proforma budget submission based on a reserve of circa £500,000.