All £6.295 million in the schools reserve budget predicted to be used this year

At a meeting of Powys County Council’s Finance Panel on Monday, November 13 opposition councillors raised concerns about Powys school finances.

Their worries surfaced as they discussed a report on performance of the 2023/2024 budget up to September.

This year the budget for all schools in Powys received £83.827 million from the council’s total budget of £326.620 million.

The report explained that the school’s budget financial position had worsened by £1.438 million over the three month period from June to September.

Originally it had been expected that £5.1 million from the school’s reserve would be used this year to help schools deal with high inflation and the cost of living crisis.

But due to the deteriorating position it is now predicted that the reserve budget will have “likely deficit balance” of £218,000 by the end of March 2024.

At the end of last March – this reserve budget had £6.295 million in it.

Plaid Cymru group leader, Councillor Elwyn Vaughan said: “What’s striking is the budget figure for schools has worsened by £1.4 million.”

Cllr Vaughan is also the chairman of governors at Machynlleth’s Bro Hyddgen all through school.

“Wearing my governors hat, sooner or let someone has to face up to the reality that not enough money is going into the secondary sector as a whole.

Finance Panel chairman and Conservative group leader Councillor Aled Davies observed: “If you break the secondary sector away from the primary sector it has a negative reserve.”

The report shows that the primary school reserve was at £6.654 million at the end of March and is expected to be £2.780 million at the end of March 2024.

Secondary school reserve stood at a deficit of £1.908 million last March and are forecast to slump further to a deficit of £3.660 million by the end of the financial year.

Finance portfolio holder, labour’s Councillor David Thomas said: “The position has deteriorated, but my understanding is that a lot of that in the secondary sector is down to two or three particular schools where there are significant deficits.

“It’s worth bearing in mind when these budgets were set there was an expectation that a lot of the financial pressures would have eased by the late autumn,”

Cllr Thomas pointed out that the UK Government had expected inflation to fall down to two to three per cent by and: “that hasn’t happened.”

Cllr Thomas: “The environment is still very challenging and we’ re not alone in that – if you look at all Welsh authorities, we’re all in a similar position.

“At the end of the day we’ll allocate as much money as we possibly can to schools but there’s no magic money tree.”

He explained that if more money is given to Powys schools – it would need to be taken from other parts of the council.

On Friday, November 17, a meeting of the council’s Learning and Skills scrutiny committee will look in depth at this year’s school budgets.

The report noted that in May, 26 schools of which 15 are primary schools, eight are secondary schools, two all through and one special school had submitted budgets which would see a cumulative deficit of £3.423 million by the end of next March 2024.

They were projecting this to become a £9.298 million deficit by the end of March 2027.

After work with the schools – the report explains that at the end of September for figures for these schools now stands at a £3.566 million deficit by the end of March 2024 and the projection is now a £7.933 deficit by the end of March 2027.