The Schools Minister in England Vernon Coaker has said that although school surplus balances have fallen for the first time since 2002-03 there are still schools holding back money that they should be spending.
Just over 7,000 schools have surpluses over the allowed limit and if these are carried forward into 2009/10 they are in serious danger of having the surplus clawed back.
The official statement says that, “While it is clearly sound financial management for schools to retain a small surplus from year to year, we expect revenue funding to be used to support the education and well-being of pupils in school now. It is however important that schools spend their funds wisely while ensuring best value for money.”
In the first official statement about claw back in this financial year the Minister said, “Local authorities have the power to claw back excess, uncommitted surpluses and redistribute the proceeds back to local schools in consultation with Schools Forums. To help, schools now have three year budgets to enable them to plan ahead on a much more certain and predictable basis, leading to improved financial management and better outcomes for pupils.
“Last year we made it clear that we expect schools and local authorities to work to reduce the level of balances by the end of 2010-11. If we do not see a substantial reduction of total revenue balances and in particular the excessive balances held by individual schools, the Government will consider further action from 2011-12 to bring the total down to ensure the funding is being spent on improving outcomes for children and young people.
“Although the number of schools with deficit balances has risen slightly by 153 to 1,848 schools on the previous financial year, it remains below the number of schools in deficit a decade ago. In addition, around 50% of these deficit balances were under £25,000. We’ve made it clear that where a school is in deficit, it must agree a recovery plan with the local authority to eliminate the deficit, normally over three years.”
The figures released show:
• Surplus balances in 2008-09 are down by around £118 million to £1.92 billion on the previous financial year.
• Excess surplus balances above the cut off point have fallen by £97 million to £495 million, and a record low number of schools (a little over 7,000) have an excessive surplus.
• As expected given the current financial climate, the number of schools with deficit balances has risen slightly by 153 to 1,848 schools on the previous financial year. However, it remains below the number of schools in deficit a decade ago.
• Around 50% of the deficit balances in 2008-09 were under £25,000.
Each individual school is responsible for their own financial management. They can often go into deficit or have a surplus due to individual circumstances like an increase or fall in pupil numbers – or similarly in staffing numbers.
There is a range of support available which schools should use to help them make the right financial and investment decisions, including:
The published data can be found at: http://www.dcsf.gov.uk/rsgateway/. A copy of the Written Ministerial Statement can be found online at: http://www.dcsf.gov.uk/pns/newslist.cgi .
Securing Our Future – Using Our Resources Well, sets out four main areas which finances in the schools sector could be run more efficiently:
· Greater value for money from sharper procurement, collective buying and better use of technology;
· Greater efficiency through the wider adoption of partnerships and shared services between schools;
· Stronger strategic financial planning – including through greater use of School Business Managers and more effective financial management skills;
· More effective use of external advice, already available, in strengthening financial management – and setting out a clear future role for central and local government and expert School Improvement Partners in supporting frontline delivery.
The discussion document is published at: http://publications.dcsf.gov.uk/default.aspx?PageFunction=productdetails&PageMode=publications&ProductId=DCSF-01097-2009&
