Agenda Item No:
7 July 2009
Report by the Director Assistant Chief Executive Finance and Commercial
the Corporate Director of Children & Young People’s Services
Cabinet Members with responsibility for:
Finance: Councillor Bill Parker
Children and Young People: Councillor Joan Kirkbride
Subject: School Balances Outturn and Dedicated Schools Grant (DSG)
Recommendations: That Cabinet notes the financial position of the schools balances
and DSG at 31 March 2009
1. Purpose of Report
Cabinet to note the financial position of the schools balances and DSG at 31 March
2. Relevant Corporate Outcomes
A more secure, healthy and independent future for our children, young people and our
3. School balances
3.1 The level of school balances is detailed in the table below. It shows the level of
balances levelled off between 2005-06 and 2006-07 and between 2007-08 and 2008-
Date 31/3/09 31/3/08 31/3/07 31/3/06 31/3/05 31/3/04 31/3/03 31/3/02
Level of £45.3m £44.2m £35.9m £36.1m £33.2m £29.1m £21.9m £21.3m
3.2 Previous reports to Cabinet have explained the process for addressing the increase in
school balances. This process includes the need for schools to be accountable for
these balances, areas where carry forward are allowed, and the thresholds (5% -
Secondary and Middle schools, and 8% - Nursery, Primary and Special schools)
above which uncommitted balances could be clawed back.
3.3 The analysis in this report shows that the uncommitted schools balances for 2008/09
are below the thresholds for any balances to be clawed back.
3.4 A summary of the Schools Balances Control Mechanism and Strategy is at
Appendix A and includes an extract from a recent letter sent to schools.
3.5 A comparison of the year end balances by sector are as follows:
Sector 2006-07 (£) 2007-08 (£) 2008-09 (£)
Nursery 2,235,570 2,085,130 2,491,780
Primary 20,772,443 25,944,750 26,041,910
Secondary (including Middle
schools) 10,716,350 13,609,860 13,942,990
Special 2,200,490 2,612,750 2,895,920
Total 35,924,853 44,252,490 45,372,600
Note: the 2008/09 figures above are after a year end accrual of £4.4 million.
3.6 School balances are in part designed to provide for future increases in capital and
revenue spending. Schools have, where they are able, put additional monies aside in
relation to the three year budget cycle to which they now plan.
3.7 All schools were required to submit by 18 May 2009 an analysis (SB1 form) of their
plans regarding the utilisation of their carry forward balances.
3.8 A summary of the schools’ returns compared to previous years is shown below. The
figures distinguish between capital balances, committed and uncommitted revenue
balances and balances held for extended schools (mainly Children’s Centres). A
comparison with the previous financial years is also included.
Committed Uncommitted Extended Total
revenue Revenue Schools 2008-09
£000 £000 £000 £000 £000
Nursery 267 259 150 1,827 2,503
Primary 6,623 12,233 3,755 3,941 26,552
Secondary 2,869 9,512 977 718 14,076
Special 852 1,051 338 0 2,241
Total 2008-09 10,611 23,055 5,220 6,486 45,372
Total 2007-08 8,961 24,475 5,374 5,442 44,252
Total 2006-07 7,255 19,737 5,202 3,731 35,925
2008-09% 23.4% 50.8% 11.5% 14.3% 100.0%
2007-08 % 20.2% 55.3% 12.1% 12.3% 100.0%
2006-07% 20.2% 54.9% 14.5% 10.4% 100.0%
Appendix B shows the analysis of these amounts set aside over the individual lines
on the SB1 form. Further analysis and checks to the data will be made by the
Schools Finance team and subsequent to this schools will be contacted to provide
further information on significant unallocated balances.
The table below shows the balances across school type compared to their final
2008-09 2007-08 2006-07
Balance Balance Balance
Final Final Final
Total as a % Total as a % Total as a %
Budget Budget Budget
Balance of Balance of Balance of
Share Share Share
budget budget budget
£000's £000's % £000's £000's % £000's £000's %
Nursery 2,503 7,149 35.0% 2,085 6,007 34.7% 2,236 4,421 50.6%
Primary 26,552 223,320 11.9% 25,945 208,871 12.4% 20,772 195,671 10.6%
Secondary 14,076 221,805 6.5% 13,610 216,807 6.3% 10,716 202,328 5.3%
Special 2,241 22,209 10.1% 2,613 20,537 12.7% 2,200 17,109 12.9%
Total 45,372 474,484 9.6% 44,253 452,221 9.8% 35,925 419,529 8.6%
Note: The Final Budget Share includes the carried forward balance from the previous
The uncommitted revenue as a percentage of the final budget share is:
2008-09 2007-08 2006-07
Overall uncommitted revenue £5,220k £5,374k £5,202k
Final budget share £474,484k £452,221k £419,529k
Uncommitted revenue as % of 1.10% 1.19% 1.24%
final budget share
3.9 The above shows the amounts held for uncommitted revenue are significantly below
the Government threshold of 5%.
4. Dedicated Schools Grant (DSG)
4.1 2008-09 is the third year in which the DSG has operated. This means that specific
areas of expenditure that are school related, based on the NCC Section 52 budget
statement, are funded by specific ring-fenced Government grant rather than general
4.2 The implications of this are that DSG resources can only be utilised on Schools block
areas, unless the Schools Forum gives express approval for a virement, and the
expenditure is in an area allowed (for education purposes) in the Department for
Children Schools and Families guidance and regulations.
4.3 In the DSG regulations there is a requirement that any DSG under/overspend must
be carried forward into the following financial year. In addition, in the NCC statement
of accounts there is a requirement to include a table stating the DSG resources
utilised in the year and the value of the DSG carry forward.
4.4 Attached at Appendix B is the final variation analysis of the DSG under spends to be
carried forward to 2009-10. They relate to the central DSG Budgets rather than the
individual schools budgets.
5. Alternative Options Considered
5.1 Not applicable
6. Financial Implications
6.1 See sections 3 and 4 of the report above.
6.2 As part of the Balance Control Mechanism which is outlined at Appendix A, the
annual balance returns submitted by schools are subject to a comprehensive
checking regime by Schools Finance staff who concentrate on the following areas
and challenge or request further justification as necessary:
Comparison with previous 2 years returns to identify revenue balances carried
forward year on year.
Check all capital balances carried forward against ERP Oracle and action taken
to resolve any discrepancies.
Check that the amount included for Pay & Benefits for 2008-09 matches the
most up to date estimate issued to schools.
Check that the SB1 form lines for changes in pupil numbers reflect the schools
Challenge any other Committed Revenue Balance items which are considered
to be excessive.
Clear plans to control or spend the committed balances are required to be provided
by schools within a reasonable time frame. This is to ensure that monies committed
by schools are spent on children and used to help deliver the Council’s major
projects of Raising Pupil attainment and School Performance and Children and
Young People’s Plan. Once these checks are completed a final report on will be
made to Schools Forum.
6.3 The Authority is currently obtaining information from other authorities on their level of
balances and policies. This information will be presented to Schools Forum to review
the scheme and to agree what changes are required for 2009-10.
7. Risk and Business Continuity Management
7.1 The school balances scheme exists as a means of encouraging schools to utilise
7.2 The monitoring undertaken by schools and Governors should ensure that funding is
spent on the effective education of pupils, linked to their Improvement Plan.
7.3 The benefits to be achieved by schools increasing their expenditure and investment
in the pupils currently in the school system, so increasing personal development and
results, far outweigh any currently identified risks.
8. List of Appendices
Appendix A: School Balances Control Mechanism and Strategy
Appendix B: Summary SB1 (School Balances return completed by schools)
Appendix C: DSG Underspend 2008-09
Author: Name: Bob Seaman
Team: CYP Finance
Contact details: Tel: 01604 237571
Fax: 01604 237771
Background Papers: None
Does the report propose a key decision is NO
If yes, is the decision in the Forward n/a
Will further decisions be required? If so, no
please outline the timetable here
Is this report proposing an amendment to NO
the budget and/or policy framework?
Have the financial implications been YES/
cleared by the Strategic Finance Manager Name of SFM: Karen Plant
Have any capital spend implications been n/a
cleared by the Capital Asset Investment
Has the report been cleared by the YES/NO
relevant Corporate Director or ACE? Name of Director: Damon Lawrenson & Paul
Has the relevant Cabinet Member been YES/NO
consulted? Cabinet Member: Joan Kirkbride
Has the relevant scrutiny committee been NO
consulted? Schools Forum has been consulted.
Has the report been cleared by Legal NA
Services? Name of solicitor:
Have any communications issues been YES/NO/NA
cleared by Communications and Name of officer: Click to begin typing
Has an Equalities Impact Assessment NO
been carried out in relation to this report?
Are there any community safety NO
Are there any environmental implications: NO
Are there any Health & Safety NO
Are there any human rights implications: NO
Constituency Interest: All