The Forum considered a report of the Directorate Finance Lead – Children and Schools which set out proposed revisions to proposals that were set out within the Scheme for Financing Schools’ excessive school balances clawback mechanism.   The Forum had considered the mechanism at it last meeting and in its consideration of whether to clawback balances above the allowable threshold held for a period of more than two years had recommended that officers undertake further to explore the extent to which a more flexible, fair and consistent procedure in light of comments made at that meeting.

The Directorate Finance Lead – Children and Schools explained that the following matters had been considered

i)          exclusion of additional devolved formula capital and supplementary free school meals grant paid to schools in March 2019 from the excess balance calculation.

ii)          extending the number of years the excess balance can be held for before clawback is considered and actioned.

iii)           removal of maintained nursery schools (MNS) from the clawback mechanism.

iv)           increasing of the allowable balance threshold, currently 8% for special schools.

The Director Finance Lead - Children and Schools explained that the above options had all been considered.  With regard to the matter concerning the exclusion of late grants from the calculation, she said that this would be excluded from this year’s calculation only due to the timescales  that those grants were released that year.

She also explained that it was not proposed that maintained nursery schools (MNS) be excluded from the mechanism, nor would the allowable threshold for special schools be increased.  Given the increased focus on high needs funding pressures and MNS longer term funding sustainability, the Local Authority (LA) was of the view that the risk of increasing balances in these sectors will not support the City’s case for sufficient funding for additional need

However, at the revised the proposal contained an amendment such that the number of years an excess balance may be held had been extended to four years.  It was asserted that that that would give schools more than sufficient time to plan and appropriately spend balances above the allowable threshold.

In addition,  the formation of an appeals panel was proposed as  a sub-group to Schools Forum. The terms of reference for the sub-group would be to review any appeals against potential clawback of balances. It was not expected that this group would meet more than twice each year. The group would consider written evidence from schools subject to clawback. The panel would be made up of three members of Schools Forum and would be supported by an LA officer.  In specific situations (i.e. discussion around own school), it will become necessary for a substitute head teacher or governor to take the place of a colleague on the sub-group

Consequently, maintained school members of the Forum were invited to approve:

• that 50% of an excess balance held for more than four years may be clawed back.
• to agree the formation of an appeal panel that considered written evidence from individual school’s subject to clawback.

All Schools Forum members were invited to:

• comment on the plan to review the implementation of the mechanism before March 2020.

The Forum explored the proposals and noted that the recouped money would be used to mitigate to High Needs Block overspend.   There was a discussion about the arrangements for the proposed appeals panels.  A member suggested an option for a face to face meeting should be included. The Forum agreed to this noting that the implementation would be reviewed before March 2020.

Decisions

1.    To agree that the proposed change to the excess balance mechanism to claw back 50% of all excessive surplus balances held for four years or more.

2.    To agree the formation of an appeal panel that considered written evidence from individual school’s subject to clawback with the option of a face to face meeting, if  requested.

3.    To note the plan to review the implementation of the mechanism before March 2020.