School budgets to be reset, but debt will remain
Schools in Powys that are in the red will have their budgets reset under the new funding formula, but the debt will remain.
The Learning Skills and Economy Scrutiny Committee at Powys County Council have looked again at the funding formula which will see 22 schools lose out, including four that would receive more than £100,000 less.
On the issue Cllr Sandra Davies said: “We don’t know who they are, for all of those schools will this result in them starting in deficit? If that is the case, then this funding formula will have failed before it begins.”
Chairman of the Audit Committee, Cllr John Morris added: “I do need clarification, what is the position for schools with deficit budgets?”
Director of Education, Ian Budd, answered: “There’s no legal provision to write off deficit unless the school closes. Any historic deficit stays with the school unless it closes, that’s the statutory position.
“There will be no excess in the allocation to pay back deficits, so there’s a pressure that school live within their means. Their ability to pay back will realistically be limited.”
Cllr Morris added: “It’s eye watering seeing the figures, we’re talking about millions of pounds.
“Are we just parking those with no expectation of getting it back? Will schools start from a level budget as the new funding formula kicks in?”
Finance portfolio holder, Cllr Aled Davies, answered that the debt would still be sitting with the school.
The formula, along with the scrutiny committee’s advice, will then go to cabinet for a decision on January 15. It is expected to come into force from April.
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