Agenda item

The report presented provided the Education Scrutiny Committee with an update on Lancashire schools in financial difficulty (SIFD), their categorisation, and the support that was being provided.

The SIFD system classified schools into one of four categories based on various financial indicators;

·  Category 1 – Structural deficit beyond recovery. The school was financially non-viable and strategic solutions were required.

·  Category 2 – Schools had significant deficits requiring intensive intervention and focused support to recover, or had no recovery plan

·  Category 3 – Schools in a vulnerable position burning through reserves, losing pupil numbers and moving into or on the brink of deficit. It was also schools that were recovering from significant financial problems but where the recovery plan was on track. They required intervention and monitoring to prevent failure in the next 3 years.

·  Category 4 – Schools with no financial issues but had continued monitoring of financial indicators to confirm ongoing financial health.

When information was provided to the June 2018 meeting, categorisations were based on forecast data from January 2018. There was a small improvement across the sector in terms of their financial stability.

Members were informed that the focus at the moment for the Financial Management Team was to look at secondary schools who were approaching a financial challenge. In February 2019 LCC would be hosting a finance seminar with invited secondary head teachers. In addition, the DfE would be in attendance along with The Association of Schools and College Leaders (ASCL) to discuss curriculum led planning.

In March 2019 new budgets would be issued to schools based on the 2019/2020 allocation. It was reported that LCC would look at how it was delivering its services internally to ensure best value for money.

Although the overall education budget had increased, because of increasing numbers, the per pupil rate of funding had remained flat.

The committee was informed there were around 13,500 to 14,000 pupils in each cohort from 0 – 18. It was difficult to give a Lancashire picture because numbers varied from district to district.

Members were informed of the improved progress of schools but were concerned about the consequential impact on the standards. There was also concerns raised around staffing. It was reported that the training budget was one area impacted upon as well as staffing, particularly non-teaching staffing..

It was confirmed that the authority received two types of investment. One was Basic Need Funding which ensured there were sufficient places for the pupils. The second was Condition Survey Funding which ensured that primary and secondary schools continue to be maintained in a fit state. It was acknowledged that there was limited capital funds to maintain the buildings. However, there was a capital reserve available to deal with emergencies. All primary and secondary schools received funding yearly. They had delegated control on how they spent that money. This could be used for investment in maintenance and technology.

Members were advised that if a school had no educational issues but had a financial deficit, LCC required the school to have a recovery plan. This plan meant the school had to recover in three years. However, if the school had a quality issue as well, it would become a forced academy. If it was a forced academy and had a deficit, this deficit was borne by the authority.

It was pointed out that Pupil Referral Schools were short stay schools but some pupils could be in these schools for 3 to 4 years because they had been excluded permanently from a primary school. The intention was for them to be reintegrated.

Regarding apprenticeships, it was reported that Lancashire had more than any of its regional counterparts. Employers expectations had changed and they were looking for older young people. So there was now a trend of less apprenticeships starting at 16 and more at 18. The Lancashire Enterprise Partnership supported and promoted apprenticeship growth.

Resolved: That;

  i.  The report presented be noted.

  ii.  An update on the figures of schools in financial difficulty including how this has transitioned over time be presented to a future meeting of the Committee.