A good "clipping back" of predicted £7.7 million 2022 school debt

At Powys County Council’s Cabinet meeting on Tuesday, November 24 councillors were told that the situation is getting better.

In 2019, it was predicted that by spring 2022, schools would be £7.7 million in deficit.

But, with work taking place with those that have financial problems, it is now though that that it will be “nowhere near that.”

The current prediction is that it will be a £4.9 million deficit.

Education consultant, Geraint Rees, told councillors that had it not been for the Covid-19 pandemic, schools would have been able to go ahead with plans for redundancies to bring down costs.

Mr Rees, said: “Schools are taking their finances very seriously.

“The situation is more optimistic than in May 2019 when a three year forward look was given.

“There was an anticipated overall school deficit of £7.7 million, we’ve already made inroads of £2.25 million into that.

“The pattern is a bit like a cruise tanker where you can’t just turn it around.

“You have to get it to a stop, and then reverse”

“There’s been a good clipping back on the deficit, and with a bit of luck it will be nowhere near the predicted £7.7 million.”

Head of Finance, Jane Thomas explained that schools that have been given warning notices would have those in place, until their recovery plans had “come to fruition.”

Ms Thomas said: “Although we have a significant number of surplus budgets in the primary sector, that is supporting considerable deficits in the secondary sector.

“Some schools were requested to submit recovery plans as their initial budgets didn’t meet the criteria, and that has been updated.”

She added that the £6.6 million extra pumped into schools this financial year taking the overall education budget up to just over £98.5 million, had stabilised matters.

But the question remains how will schools be able to pay back their historic debts?

“Quite a lot of work is ongoing, but we appreciate we have a long way to go, said Ms Thomas.

Adult Social Care portfolio holder, Councillor Myfanwy Alexander, said that in her experience as a school governor it was always wise to deal with grant funding “conservatively.”

Cllr Alexander, said: “As more school income comes in grants, it becomes more difficult for schools to manage from year to year.

“They have two choices, they have to assume the grant will be reproduced next year which leads to deficit.

“Or presume that a good chunk of that grant money will not arrive so they run into surplus.

“It would be impossible to run a business like that.”

“Grants make good political headlines but it would be far better to have it put into the base funding.”

Council leader, Councillor Rosemarie Harris added: “It’s good to hear we are cautiously optimistic.”

The report was noted.