Council completes school funding review

West Berkshire Council has completed a review following a decision by the Schools Forum to return excess funds held by schools to provide support for high needs children.

In July 2024 the Schools Forum voted to return excess money held - which applied only to Government funding and not money raised by or on behalf of schools. The unspent money - which doesn't include funding already allocated - will instead be used to provide additional support for pupils with Special Educational Needs and Disabilities (SEND) or those in Alternative Provision. West Berkshire Council is already overspent by £9m in this area due to high demand and this continues to grow.

The Council, in servicing the High Needs Block £9M deficit, loses an estimated £360K annually that it might receive in interest; money we could use to deliver services.

Over the summer West Berkshire Council has met with those schools thought to have an excessive amount of unspent and unallocated funding and who wanted to meet with councillors, and senior officers from the Education team. The purpose of these meetings was to review their finances, understand their concerns and listen to reasons as to why their schools should retain more funding than originally proposed.

As a result of these reviews, only two schools will be required to return some of their funding, one of which will now benefit from two key projects being covered by the Council's capital funding.

£1.5M will be clawed back from Brookfields School from their £3.8 million reserves, but the Council will now put £600K into an accessibility project, within our Capital programme along with over £800K for new classrooms that can take 20 more children.

There will be a very small amount returned from Curridge school. Discussions are ongoing, but they will still have substantial reserves even after this money is repaid.

Councillor Jeff Brooks, Leader of West Berkshire Council said:

"We visited the five schools most affected in terms of the amounts we proposed to clawback and would like to thank all those schools for receiving us with consideration and courtesy.  The passion they showed for their schools shone through in everything they said - their enthusiasm is immense and their ambition boundless. They are a credit to their children and their communities.

"Good things have come from this review. For example, the fact that we will identify funding for two key projects for Brookfields school in next year's Capital programme - that is what this Council is here to provide. I'm very pleased that the allocation of over £1.5m in our capital programme for this school means that there is no NETT effect on the school's balances as a result of the clawback and we support their ambition to expand.

"These adjusted numbers reflect our thorough review and are adjusted principally where schools have been able to show that uncommitted reserves were committed or there were clear and acceptable reasons why they had been unable to commit them. This process, although difficult has shown without doubt that we are here to support our schools, it is a priority for us and our duty is to ensure that there is enough money to provide every one of West Berkshire's children with the education they deserve."

A further positive outcome of the meetings with schools is the proposal to hold engagement meetings between the executive and maintained schools twice a year to ensure effective communications going forward.

What is the background to this issue?

Each year schools are given a grant from the government to spend on running the school. Funding should be used during the year for the benefit of pupils, but schools will sometimes carry some forward from year to year to allow for unseen contingencies or for development funds to put towards capital projects. 

In some cases, an excessive amount of funding has been built up and is sitting in school accounts. Since 2015, the amount of funding schools has been keeping without any spending plans has more than tripled from £4m to £13.4m.  

Recognising that there are pupils across the district who need additional support now, 68% of schools agreed that the surplus in government funding held by schools should be returned and redistributed so that it could be put to good use to support children with additional needs. The Schools Forum - representing local schools - agreed by six to one to apply this from this year in line with the feedback received by schools through the consultation.  West Berkshire Councillors do not sit on this body and therefore cannot vote on any decision. 

This is a decision which has been taken collectively by schools and not West Berkshire Council. It applies to Government funding provided to the school and not to money raised through fundraising by or on behalf of the school. Only funding more than 10% of the surplus, where it is not already committed, will be returned - allowing the schools to keep more than could be returned and favourable to the 5% for secondary and 8% for primary schools under school's finance guidance.

It is not the intention of West Berkshire Council or the Schools Forum to take income which has been raised by or on behalf of the school and which should be kept in a separate account to the grant funding.

The review recently completed follows a commitment made that schools would have the opportunity to provide financial information to show the source of accrued funds and which will be considered by the Council before any funding is returned for redistribution.