Schools funding row continues

By Elgan Hearn, Local Democracy Reporting Service

Senior councillors clashed over school finances after they were not mentioned in a presentation outlining how Powys County Council intends to respond to a scathing Estyn inspection report.

During an extraordinary meeting of Powys County Council on Thursday, April 10, members of the Liberal Democrat/Labour Cabinet presented how the council plans to address Estyn's four recommendations following the report's publication last month.

Conservative group leader Cllr Aled Davies said: “A massive gap in the presentations this morning is the delegated schools budget.”

This is the sum of money that the council passes on to schools annually - it has increased to £96.389 million from £88.964 million last year.

School finances have been in crisis for years, with some secondary schools holding deficits running into millions of pounds.

Cllr Davies continued: “Nothing has been said on that, there were two years when (financial) pressures were going unfunded and £9 million of reserves have been spent.”

This referred to the decision taken a couple of years ago to expect schools to deal with the cost of living crisis and energy hikes mostly by themselves and use their cash reserves.

Cllr Davies “Can the portfolio holders explain the pressure this puts on school standards.”

Labour’s Cllr David Thomas, portfolio holder for finance, said: “We’re here to discuss the recommendations from the Estyn report; finance wasn’t one of those.

“In actual fact if you read the report in detail, you will find they are quite complimentary.”

He pointed out a section in the Estyn report that said the council knows its schools' financial position well and that “bespoke” help is given to schools to deal with financial issues that could affect their performance.

Cllr Thomas said: “In regard to funding going into schools we passported every penny we had from Welsh Government over to education.”

“I agree it was not enough to meet what was required in the (school’s) funding formula so the only thing we could do was take a strategic decision to look at the level of reserves being held in schools.

“The only other option was to increase Council Tax or take another £6 million out of services.”

He asked Cllr Davies how he would explain raising Council Tax or making further cuts when £8.9 million was sitting in school reserves.

While Estyn have not provided a specific recommendation on finance they do say in the report:  “the local authority has not had enough impact over time in supporting sustainable improvement in school budget positions.

“In addition, the local authority’s ability to support and challenge individual schools to manage their budgets is adversely affected by a range of strategic decisions and financial issues affecting education services overall.”

They add that this year the council has decided to fully fund its funding formula for schools for 2025-26.

Estyn said: “However, in the previous two years the authority as part of its financial strategy, required schools to draw on their reserves.

“This, combined with increasing energy costs and other cost pressures, has led overall school balances to reduce from over £8.9millon at the end of 2021-2022 to £0.9million at the end of 2023-2024, which was the third lowest level across Wales.

“The authority retains a higher proportion of education funding centrally than most other local authorities without fully considering whether this provides value for money."