Dozens of staff to go as schools cut jobs to balance budgets

Anthony Lewis, Local Democracy Reporter

Schools in a Welsh county have planned to cut more than 50 teaching and learning support assistant posts this financial year in a bid to balance their budgets.

In a report to the council’s Aspirational Merthyr Tydfil scrutiny committee on Monday, June 30, it says that during the budget-setting processes for the current financial year schools have so far planned to reduce a total of 55 posts (11 teaching roles and 44 learning support assistants) to support the balancing of their budgets and medium-term financial plans. The majority of these staff will be released from September 2025.

Most of these posts are fixed-term contracts with less than two years’ service but six of the posts have resulted in redundancy payments due to length
of service.

Redundancies

No compulsory redundancies have been carried out to date although one school has indicated this may be necessary following the completion of voluntary redundancy processes, the report says.

Merthyr Tydfil schools’ balances held in reserves on March 31, 2025, were £861,000 in surplus which is a better position than when school budgets were set in May 2024 but still represents a 58% reduction in balances year-on-year and a reduction to around 1.4% of delegated budgets held in reserve.

Of the six schools setting a deficit budget in 2024-25 two schools recovered their deficit budget and two are updating their planned licensed deficits to reflect additional savings required to balance their budgets over the medium-term.

The other two schools are currently unable to balance their budget over the medium-term and talks are ongoing to identify the savings needed to recover the deficit.

Both schools ended the financial year with smaller deficits than initially set but the report says further work is needed to stabilise budgets during 2025-26 and agree a plan to recover the deficit position.

Indicative information 

Based on indicative information shared by all councils across Wales in February schools’ balances on March 31, 2025, are expected to fall significantly across Wales year-on-year and 32% of all schools are expected to
be in deficit compared to 21% in Merthyr Tydfil and 21% across Wales the previous year.

Across Wales 15 local authorities are predicting to have at least 20% of their schools in deficit, 10 to have at least 30% in deficit, and five to have more than 50% of their schools in deficit with 12 local authorities expecting to have an overall negative balance position across their schools’ budgets compared with two the previous years.

The report says: “Based on the information shared it seems that school balances across Wales are currently in a more challenging position than they were immediately prior to the pandemic in March 2020 when at that time 23% of schools across Wales were in deficit and five local authorities had their overall school balances in a deficit position.”

But it says that this is based on indicative information only which is currently being updated following the closure of accounts process in each authority before the formal publication of school balances data by Welsh Government in October 2025.

The report adds: “This challenging picture of significantly falling balances across schools in Wales and an increasing number of schools in a deficit budget has occurred within the context of two years of significant budget reductions (2023-24 and 2024-25) affecting schools across Wales.

“Also schools are no longer receiving significant in-year grants from Welsh Government with only small amounts being received at the end of the last two financial years (March ’25 and March ’24) and nothing the year previous (March ’23).”

Budget-setting process

The report says that as part of Merthyr Tydfil Council’s budget-setting process for 2025-26 the schools’ formula funding, which was grown in line with usual practice to include pay awards, other inflation increases, and pupil number changes, had no further cuts applied for 2025-26.

This was following a better-than-expected local government settlement but the cuts from 2023-24 and 2024-25 were still applied to each school’s funding for 2025-26 resulting in a cut of 6.33% to each school.

Other ways in which schools have chosen to manage their budgets include
reductions in capitation spend, IT, agency cover, and reducing building
maintenance costs.

A number of schools have stopped the music service level agreement which has led to redundancies from this service and reduced hours for staff.

Following this continued budget reduction in 2025-26 there are six schools setting a deficit budget in 2025-26 and requiring a planned licensed deficit (PLD), four of these continuing from 2024-25 with two being new.

Financial plan

Schools are currently working on plans to recover the deficit over the period of the medium-term financial plan as part of their PLD application.

Given the position of falling balances across schools and an increasing number of deficit budgets, the aggregate schools balance at March 31, 2026, based on budgets set by schools is projected to be -£1.55m.

Over the period of the council’s medium-term financial plan an additional 13 schools are projecting a deficit budget position in years two (six schools) and three (seven schools) and further work will be carried with these schools during the autumn term to update their medium term plans and consider plans to address these deficits before April 2026.

In total 19 of 24 schools (79%) are currently projecting a deficit budget at some point between 2025 and 2028.

Although not all the 13 additional schools will require a deficit budget during the medium-term financial plan this highlights those schools that need to reduce expenditure and usually to reduce staffing to set a balanced budget, the report says.

The report adds: “This helps to give context to the scale of the challenge currently facing schools to set balanced budgets within the funding levels provided in the 2025-26 budget.”