Fears Powys school funding could be left £2m in the red

At a finance panel meeting on Thursday it was revealed that half of Powys County Council’s secondaries have received warning letters about their budget position.

The details are being kept under wraps awaiting an imminent meeting of the learning and skills scrutiny committee.

Audit committee chairman Councillor John Morris said: “We have six out of the 12 secondary schools on warning letters, which is quite considerable really.”

“What’s worrying is with new financial structures, deficit budgets in those schools is increasing.

“It seems that some have had warning notices for a considerable amount of time, are they really working?”

Head of finance, Jane Thomas, said that the tweaks to the formula had directed more money to the secondary sector, and it was “very much the expectation,” that they could manage their annual budget with what they had been given.

Ms Thomas said: “We’ve seen an improvement and there will be a detailed report on school budgets going through committees in November.

“Some schools are still putting together recovery plans.”

It had been expected that schools pay back their historic debt in three years.

Ms Thomas told the committee this had changed, and payback plans were looked at on an individual basis.

Antidote

She explained that this is so that the education of pupils currently in these schools is not “jeopardised.”

Ms Thomas added: “In terms of the warning letters, it goes out when a school is in an unacceptable position, plans are put in place to address it.

“I have been quite keen that the warning notice is only withdrawn when those plans come to fruition.

“As soon as the plan is delivered, and the position improves, we consider the withdrawal of those notices.”

The report shows at the end of the 2020/21 financial year, it is expected that primary schools reserves will be over £2m in surplus while secondary schools will be over £4m in the red.

Special schools are predicted to be £17,000 in the red.

The report says that this is creating a “significant risk” for the council, and that £1.11 million from the council’s reserve account may need to be used.

In April 2019 a new school funding formula was adopted which was intended to be an antidote to budget issues.

By December 2019, tweaks had to be made to the formula, and it was acknowledged that more changes will be needed to find the right equation of money for schools in the county.

Part of the issue is that the formula favours primary over secondary schools.