Agenda item 4 - MTFS (Final) Cab 070213 , item 9. PDF 1 MB

In the future there is a risk that the council will be expected to meet these costs without a
DSG funded budget to meet the cost; as a consequence the Schools’ Forum has
recommended that a number of long standing deficits in maintained schools should be
written off.
The Schools Forum discussed options for writing off deficits at its 28 th November 2012
meeting and again on 9 th January.
The contexts for the discussions were:
• At 31 st March 2013 there are projected to be 18 schools in deficit; the aggregate deficit
is estimated at £1.429 million.
• A number of these schools have an ‘historic’ deficit i.e. the deficit has been built up in
the past, usually under previous school leadership, and is challenging to reduce,
especially where pupil numbers are static or reducing.
• Requests to write off or reduce deficits have been rare because the focus has been on
encouraging all schools to manage their budgets effectively.
• DfE advice on the position from 1 st April 2013 is equivocal: LAs may write off deficits
‘from their own resources’ but cannot make provision within the DSG schools block.
• It is not clear whether, with the agreement of the Schools Forum, deficits may be written
off from DSG balances held in the High Needs Block. There is a significant DSG
balance projected for 31 st March 2013; given future uncertainties there is an opportunity
to address the current deficits that may be unlikely to arise again.
In its initial discussion in November 2012 the Forum expressed concerns about the principle
of writing off deficits when many schools had had to take difficult budget decisions, but
acknowledged that some schools had faced particular challenges. Officers were asked to
review the circumstances of each of the schools with a deficit and develop more detailed
criteria for write-off. At its 9 th January 2013 meeting the Forum considered the proposed
criteria and the risks for the council, the Dedicated Schools Grant and for the pupils in the
schools concerned. After a lengthy debate The Forum agreed to recommend the principle
of writing off school deficits subject to the application of robust criteria to be applied in
respect of individual schools.
It is therefore recommended that school deficits are written off in schools where:
• an in-year revenue balance has been achieved i.e. the school has restructured its
finances so that spending does not exceed the annual budget
• a substantial amount of the deficit will have been repaid by March 2013
• there has either been a change of leadership or the school has significantly
restructured (e.g. gone to mixed age teaching, amalgamated infants and junior)
Many of these schools have also been categorised by Ofsted as requiring Special
Measures and/or suffered a fall in pupil numbers.
There are a further three schools that converted to academy status with a deficit but prior to
31 st March 2012. The Forum recommends that the same principles be applied to these
schools in consultation with the Education Funding Agency.
16