The Forum considered a report of the Directorate Finance Lead – Children and Schools which presented the outcome of a consultation on proposed changes to local Management of the Scheme for Financing Schools.  The proposed change to the Scheme was to establish an excess surplus balance mechanism to claw back 50% of all excessive surplus balances that are held for two years or longer.

In light of the Forum’s, power to approve changes to the Scheme for Financing Schools, maintained school members were invited to vote on a number of questions concerning the local management of the Scheme.   It was noted however that directed revisions by the Department for Education are required to be adopted by Council and schools. The questions are set out below:

?       (Q1) Scheme Ref: 2.3 - Require schools to submit multi-year budget plans and underlying assumptions on which financial plans were based.

?       (Q2) Scheme Ref: 2.9 - Further detail and clarification required in schools’ register of business interests.

?       (Q3) Scheme Ref: 2.10.1- Application of contracts to schools outlining that governing bodies are empowered to enter into contracts, but in most cases do so on behalf of the Local Authority.

?       (Q4) Scheme Ref: 3.2 - Budget share payments should be made in 12 equal instalments throughout the year.

?       (Q5) Scheme Ref: 3.6 - Update to clarify Salix Loans are now permissible.

?       (Q6) Scheme Ref: 4.2 - The Council to clawback balances above the allowable threshold that have been held for more than 2 years.

?       (Q7) Scheme Ref: 4.9 – a DfE directed revision - Cash advances and not loans will be used as a means of ensuring a school has sufficient funds. Loans will only be used to assist schools in spreading the cost over more than one year of large one-off individual items of a capital nature that have a benefit to the school lasting more than one financial or academic year.

?       (Q8) Scheme Ref: 8.3 - Schools will have a month to consider the terms of Service Level Agreements (SLAs). SLAs starting on or after the inception of the scheme will be reviewed at least every three years.

?       (Q9) Scheme Ref: 11.10 - The costs of individual school staff attending child protection case conferences and other related activity will be met from the school’s individual budget.

?       (Q10) Scheme Ref: 13.1 - Responsibility of repairs and maintenance lies with schools via use of delegated budget shares. Capital expenditure is to be retained by authorities.

The Forum noted that a consultation across Local Authority maintained schools had been launched which had received 73 responses.  The report provided the consultation responses to each of the questions that were circulated in the following style: number of responses received; number in favour; number opposed and a summary of comments.

The Forum took into consideration each of the consultation responses and the Directorate Finance Lead – Children and Schools responded to questions from Forum Members before proceeding to debate each question in turn prior to moving to vote.

There was a lengthy discussion about Q6 (excessive balances clawback mechanism at a rate of 50% for any excessive balance held for over two years).  The Forum noted that a strong majority of respondents had not given their support for the mechanism as described in its current form, citing a variety of concerns about the need for cuts, contingency arrangements.  It went on to discuss the complex and unpredictable manner in which maintained schools across the sectors are sometimes funded, and how budgets are set and the consequences this may have on school balances at the end of a financial period.

Officers emphasised that the purpose of clawback was to remove the retention of excess balances and thus strengthen Manchester’s lobby to central government about appropriate levels of funding for it’s schools to deliver high quality education, particularly given the intention that the characteristic of ‘deprivation’ will in future be removed from the Grant.  The Forum then discussed the needed for a Scheme which allowed for such factors to be taken into consideration and the importance of fairness in the way the money is recouped and reallocated. There was a consensus amongst the Forum that a more refined and flexible approach than the one before them was required.  Whilst it was acknowledged that a more robust approach that would allow funds to be recouped in an open and transparent way, officers accepted that more work on the mechanism was necessary to bring about a procedure that was able to withstand the nuances and complexities of schools funding arrangements whilst remaining fit for purpose.  It was subsequently agreed that an amendment on this particular point would be brought back to a future meeting of the Forum for consideration without the need to repeat a consultation across maintained schools.

Decision

(Q1) Scheme Ref: 2.3 - Require schools to submit multi-year budget plans and underlying assumptions on which financial plans were based.

1.    Eligible members of the Forum voted in favour by majority.  There was one vote against and no abstentions.

(Q2) Scheme Ref: 2.9 - Further detail and clarification required in schools’ register of business interests.

2.    Eligible members of the Forum voted in favour unanimously.  There were no votes against and no abstentions.

(Q3) Scheme Ref: 2.10.1- Application of contracts to schools outlining that governing bodies are empowered to enter into contracts, but in most cases do so on behalf of the Local Authority.

3.    Eligible members of the Forum voted in favour unanimously.  There were no votes against and no abstentions.

(Q4) Scheme Ref: 3.2 - Budget share payments should be made in 12 equal instalments throughout the year.

4.    Eligible members of the Forum voted in favour by majority.  There was one vote against and no abstentions.

(Q5) Scheme Ref: 3.6 - Update to clarify Salix Loans are now permissible.

5.    Eligible members of the Forum voted in favour unanimously.  There were no votes against and no abstentions.

(Q6) Scheme Ref: 4.2 - The Council to clawback balances above the allowable threshold that have been held for more than 2 years.

6.    The Forum voted unanimously to request that officers undertake further work to develop a more detailed clawback mechanism for consideration at a future meeting of the Forum.

(Q7) Scheme Ref: 4.9 – a DfE directed revision -Cash advances and not loans will be used as a means of ensuring a school has sufficient funds. Loans will only be used to assist schools in spreading the cost over more than one year of large one-off individual items of a capital nature that have a benefit to the school lasting more than one financial or academic year.

7.    Eligible members of the Forum voted in favour unanimously.  There were no votes against and no abstentions

(Q8) Scheme Ref: 8.3- Schools will have a month to consider the terms of Service Level Agreements (SLAs). SLAs starting on or after the inception of the scheme will be reviewed at least every three years.

8.    Eligible members of the Forum voted in favour unanimously.  There were no votes against and no abstentions

(Q9) Scheme Ref: 11.10 - The costs of individual school staff attending child protection case conferences and other related activity will be met from the school’s individual budget.

9.    Eligible members of the Forum voted in favour unanimously.  There were no votes against and no abstentions

(Q10) Scheme Ref: 13.1 - Responsibility of repairs and maintenance lies with schools via use of delegated budget shares. Capital expenditure is to be retained by authorities.

10.Eligible members of the Forum voted in favour unanimously.  There were no votes against and no abstentions