Local schools predict more than £8m worth of deficit

Lewis Smith Local Democracy Reporter

Schools across a Welsh county are expecting to have more than £8m worth of deficit at the end of the financial year according to a recent council report.

The figures for Neath Port Talbot were given to members of a performance and resources scrutiny committee in December 2025 as part of their quarterly review on the annual revenue budget.

The report described how the council are currently predicting a closing deficit of £8.7m for school reserves at the end of the 2025-26 financial year.

It said: “The opening balance for school reserves in April 2025 is a £2.6m deficit. Schools have since set their budgets indicating they will require a further £6.1m of reserve funding in FY 2025-26 resulting in a predicted closing deficit reserve balance of £8.7m in March 2026.

“Work is ongoing between the LA and those schools who have submitted deficit budgets to set individual school recovery plans.

“The director of finance will also be requesting quarterly updates to monitor the overall reserve position.”

These figures were discussed ahead of the budget setting process for the 2026-27 financial year as well as planned talks over the authority’s medium term financial strategy.

The strategy which was approved to run until the 2028-29 financial year described how there was a “considerable variation” in financial performance across schools in Neath Port Talbot.

It said at the beginning of this financial year there were 33 local schools with deficits totalling £7.5m, and 33 schools with surpluses totalling £4.9m.

It also noted that under the circumstances the level of future investment in education would be a “critical consideration” for the upcoming budget.

The report said: “The council has acknowledged that a particular issue exists in relation to the funding of teaching assistants for children with a recognised additional learning need.

“It is proposed that this is addressed as part of the 2026-27 budget setting process in conjunction with a review of the actual schools funding formula.

“In light of the current funding context and the structural deficits within some schools, the level of future investment in education will be a critical consideration in the upcoming budget process.”

The delegated school budget for Neath Port Talbot Council in 2025-26 is worth a total of £121 million, a figure which was raised from £106 million in 2024-25.