All city schools expected to go over budget this year

Nicholas Thomas, local democracy reporter

Nearly all of Newport’s schools are expected to overspend on their budgets this year.

A city council report shows 53 of 56 schools forecast an in-year overspend on their revenue budgets, with one school expecting to be in a deficit position by next spring.

Reserve funds

In “the majority of cases”, schools’ overspends can be cushioned by their individual reserve funds, but the report warns “several” schools’ rainy-day balances are “relatively low”.

Collectively, the city’s schools are expected to overspend on their funding by more than £4.3 million this year, according to the revenue budget monitoring report presented to council cabinet members on Wednesday.

The reasons for the overspend are a combination of both “one-off” and “recurring” expenditure.

“Going forward, there is a risk that this level of recurring expenditure in excess of base budget funding will result in certain individual schools entering a deficit budget position”, warns the report by senior officers.

Monitoring

Schools facing the most serious pressures are being “closely monitored by the finance team, and additional support has been put in place to help the schools with deficit avoidance [and] recovery”.

The city’s secondary schools are expected to collectively overspend by £1.7 million, while primary schools could collectively be nearly £3.8 million in the red by next March.

Overall, the council anticipates balance deficits could be partly offset by grants and other funding, but could still total more than £4.3 million.

Ring-fenced reserves can help balance the books in the short-term, but the council expects schools’ overall reserves to drop from £13.6 million to £9.2 million over the course of the financial year.

“An analysis of the forecast overspend has identified that approximately 58% is to fund recurring expenditure,” the report states. “For some schools, this is an unsustainable position, as surplus balances are limited, and, therefore, there is a risk of entering a deficit position in future years.

“Because of this, robust monitoring will be required for the remainder of the year to ensure that schools plan for this risk and take the necessary steps to avoid this or [minimise] the impact.”