School funding 2022-23 - Update for heads and governors
17 May 2022
Scheme for financing schools and balance control mechanism
The 2022-23 Scheme for Financing Schools was approved by Schools Forum in April. The scheme, which is substantially the same as the 2021-22 version, sets out the financial and accounting framework for maintained schools in Ealing.
The updated scheme for financing schools maintains the balance control mechanism (BCM) for excess surplus balances. At year end, maintained schools with balances over 5% for secondary schools and 8% for primary, nursery and special schools (as a proportion of their school budget share) will need to complete and submit a School Balances Form.
Following the confirmation of maintained school balances, the local authority will revert to the Forum in June to make a decision about whether to implement the mechanism this year. Should Schools Forum agree to implement the BCM, schools with an increasing excessive surplus for 2 consecutive years will be considered for clawback at the incremental levels set out in section 6.2 of the scheme.
Budget setting 2022-23
Here are the final budget allocations for mainstream primary and secondary schools and LA services which were agreed at the January Schools Forum.
The total allocation to Ealing schools increased by over £7 million between 2021-22 and 2022-23. In addition, mainstream schools will receive a school supplementary grant allocation in 2022-23 to support with the Health and Social Care Levy and wider cost pressures. The indicative value of this across all Ealing schools is £7.89m. School level allocations will be published by the end of May. However, the local authority recognises that the fall in demand for primary school places in the borough and wider cost pressures may be impacting on the financial sustainability of some schools in the borough and that schools will be working with their governing body to manage this.
Schools are required to submit their 2022-23 budget to the LA by Friday 27 May.
Budgets must be ratified by the governing body before submission. A deficit budget cannot be planned for by a maintained school without the formal approval of the Local Authority. All requests for licensed deficits must be made in writing to the LA, with a detailed Deficit Recovery Plan setting out how the school budget will be balanced over a 3-year period.
Here are the deficit recovery plan and letter templates
Completed documents should be emailed to Stephen Bell firstname.lastname@example.org and Kim Price email@example.com in the first instance for checking, before being submitted to the chief finance officer and director for children and adults services for approval.
Schools are also required to submit their three year budget forecast by the same 27 May deadline. This is now a statutory requirement.
Schools with concerns about being able to set a balanced budget for 2022-23, after the use of any balances, or with concerns about their financial sustainability and / or the impact of falling pupil numbers should in the first instance contact Kim Price firstname.lastname@example.org.
2022-23 monitoring of outturn
Schools are asked to have an outturn forecast from the second half of the summer term which is updated at least half termly to governors. As funding becomes tighter, regular monitoring and reporting on spending against your agreed budget is particularly important. Cumulative spend analysis is a part of this process, however this should be combined with forecasts and assumptions for both income and expenditure which are reviewed on a regular basis. Schools that have either licenced deficits or loans; or who are forecasting a deficit at 31 March 2023 should submit monthly outturn forecasts to Schools Accountancy Services SchoolsAccountancyServices@ealing.gov.uk and Kim Price, email@example.com.
As school funding becomes tighter, strategic budget planning and resource management in schools is more important than ever. We have recently updated our financial sustainability page on the EGfL to include links to the DfE’s school resource management resources, training and other documents and templates that can support schools in managing their resources.