School budgets under the spotlight

Telford and Wrekin pays £1.3 million a year to cover costs that central government covers for other councils, and a report says it is “disappointing” planned reforms don’t include correcting this anomaly.

Writing for the borough’s schools forum, Group Accountant Tim Davis says the authority has historically tried to protect school budgets by funding early retirement expenses and borrowing with its general fund.

Other councils used the school budget, and now have these met through a Department for Education “legacy grant” – an arrangement a government consultation document published this summer proposes keeping.

The Telford and Wrekin Schools Forum will discuss Mr Davis’s report – which updates them on school funding for 2022-23 – when it meets on Thursday, September 16.

Mr Davis reminds members that the government promised, in 2019, that the English schools budget would rise from £45.1 billion to £52.2 billion over the following three years.

“The July 2021 funding announcement confirmed that the previously-announced increase is to be implemented in 2022-23,” he said, adding that this will result in key elements of the DfE National Funding Formula increasing by three per cent.

“As Telford and Wrekin moved in 2020-21 to mirror the NFF as far as possible, this means these factors will also increase for Telford and Wrekin schools by around three per cent,” he adds.

Mr Davis also notes that the DfE published a consultation document titled “Fair school funding for all: Completing our reforms to the National Funding Formula” in July.

“Much of the document is at the level of broad principles with solutions to practical issues postponed to future consultations,” he says.

“The main thrust of the proposed changes is to reduce the role of local authorities and school forums in the school system.

“From a Telford and Wrekin perspective, it is very disappointing that one of the proposals is for the DfE to continue to fund ‘unavoidable legacy payments (those for termination of employment costs and prudential borrowing) that some local authorities will still be tied into with a separate legacy grant’.

“As Telford and Wrekin originally used general fund to pay for premature retirement costs, protecting school budgets from these costs, we have been and will continue to be obliged to pay these costs from council funds.

“Other authorities that originally funded them from school budgets will continue to have these costs paid by the DfE.

“The current annual cost to Telford and Wrekin is £1.3 million.”

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