Issue - meetings

RESOLVED:

That the Cabinet approves the application for a licensed deficit for all schools listed in Appendix 1 for 2025/26.

Reasons for decision

The Cabinet Member for Children, Families and Education presented a report seeking approval to set licensed deficit budgets for maintained schools. At the start of the academic year, 15 schools reported deficits for 2025/26, an notable increase. It was explained that maintained schools were required to submit balanced budgets annually, but in exceptional circumstances where all alternatives have been explored, a governing body may request a licensed deficit for a defined period, usually one year. Renewing licences enabled schools to continue operating while working towards financial recovery.

The Cabinet Member explained that education finance officers and advisers would meet with headteachers, business managers and, where necessary, chairs of governors to monitor, support and review financial plans. The rise in deficits reflected wider challenges, including declining pupil numbers due to historically low birth rates, high staffing costs and increased operational expenses. These pressures were impacting the Dedicated Schools Grant, although there was no direct effect on the Council’s General Fund. However, cash advances to schools created interest costs and financial risk for the Council.

The Vice-Chair noted that falling pupil numbers were a significant issue for many schools and that resolving these financial challenges would not be easy.

Alternative options considered and rejected

Cabinet could have decided to write off the deficits, which would have needed to be agreed by Schools Forum, or withdrawn the governor delegated powers over the schools’ budgets.