Agenda Item No


The Vale of Glamorgan Council


Scrutiny Committee [Lifelong Learning]:  10th October 2011


Report of the Director of Learning and Development


Learning and Development Directorate Medium Term Financial Plan and Budget Strategy


Purpose of the Report

1.             To inform Members of the Medium Term Financial Plan and Budget Strategy for the Learning and Development Directorate and the proposed Scheme to Claw back School Balances.


1.             That Members note the Medium Term Financial Plan, the Budget Strategy and the Scheme to Clawback Surplus School Balances as attached.

Reason for the Recommendation

1.             To ensure Members are aware of the projected financial position in relation to Education Services over the medium term and the measures being put in place to ensure that services are delivered within available funding.


2.             The Council's Financial Strategy 2011/12 to 2013/14 for the achievement of savings includes the following requirement:

'In view of the future pressures facing the service and the shortage of funding, the Director of Learning and Development needed to build on existing work and prepare a formal medium term service and financial strategy specifically for education.  The strategy should identify the options necessary to keep the service within its likely resources and meet savings.  These should include the potential for reconfiguring schools.  The Director should also set out how he will provide support to schools in planning their own budgets over the medium term and achieve their savings'.

3.             The School Funding (Wales) Regulations 2010 were implemented in September 2010 and empower authorities to direct or clawback surplus balances in full or in part. The Council's Fair Funding Scheme for Financing Schools has, following consultation with the Schools Budget Forum, been updated to include provision of the new funding regulations.

4.             The cumulative balance for all schools as at 31st March 2011 was £3,952,865 which is 4.82% of the schools 2010/11 delegated budget.  The total balances have increased by £1,071,060 from the previous year, an increase of 37%.

5.             Two schools ended the year in deficit totalling £22,997, one in the primary sector and one in the secondary sector.  There were 39 schools with balances in excess of the recommended 5% of their budget.  The total in excess of the 5% limit was £1,393,065.

6.             There were two Nursery and 25 Primary schools with balances in excess of £50,000; the value of the balances in excess of £50,000 was £19,889 and £761, 808 respectively.  In addition there were three Secondary and one Special school with balances in excess of £100,000; the value of the balances in excess of £100,000 was £321,101 and £121,599 respectively.  The total balance in excess of the respective limits was £1,235,397.

7.             Overall balances dipped in 2006/07 but have risen each year since. The number of schools in deficit over this period has reduced whereas the number of schools exceeding the WAG £50,000 and £100,000 thresholds for balances has increased.

Relevant Issues and Options

8.             The Medium Term Financial Plan 2011/12 - 2014/15 is attached for information. The plan sets out contextual information in relation to the financial position of Education Services relative to the rest of Wales as well as information on pupil numbers, school capacities and educational outcomes.

9.             The key challenges facing the service are summarised in the attached document as well as projected cost pressures and growth. Based on current assumptions there is a forecast real term cut for schools in each of the coming three years in spite of the Welsh Government's funding commitment for schools. The position is replicated for Central Education Services although the real term impact of future settlements is forecast to be more severe for Central Education Services which do not benefit from the minimum funding commitment.

10.        The key components of the strategy to keep the service within its likely resources and meet savings targets are detailed in the plan.

11.        The Scheme to clawback surplus school balances is attached for information.  The clawback option will only be used if schools fail to use their surplus balance or fail to adhere to any direction from the authority to spend.

12.        The scheme sets out the challenges the authority will make and the requirement for schools to submit details of their plans with documentary evidence. The scheme     also outlines how any funding clawed back can be used and the timescales involved.

Resource Implications (Financial and Employment)

13.        As shown in the attached medium term financial plan.

Legal Implications (to Include Human Rights Implications)

14.        The Scheme to Claw back School Balances complies with Welsh Government Funding (Wales) Regulations 2010.

Crime and Disorder Implications

15.        There are no Crime and Disorder implications.

Equal Opportunities Implications (to include Welsh Language issues)

16.        All Local Authority maintained schools are subject to the same regulations.

Corporate/Service Objectives

17.        The objectives of the scheme are consistent with the Council's priorities to exercise robust financial management and to explore all opportunities to improve efficiency and collaborative working.

Policy Framework and Budget

18.        The recommendations in this report are within the existing policy framework.

Consultation (including Ward Member Consultation)

19.        Not applicable.

Relevant Scrutiny Committee

20.        Lifelong Learning.

Background Papers

School Funding (Wales) Regulations 2010

Fair Funding Scheme for Financing Schools

Contact Officer

Ian Teagle, Operational Manager - School Support, 01446 709118

Officers Consulted

Corporate Management Team

School Budget Forum

Headteacher Steering Group

All Headteachers

Responsible Officer:

Bryan Jeffreys, Director of Learning and Development