Q3. School’s Forum agreed to provide £10m of the existing School Balance’s
(following a request from SCC) to help deal with the forecast overspend (£24m) after
the last Cabinet meeting.
a) Is this money only available for Education and School’s related expenditure? What
else can this money be used for?
b) Is there a Business Case, Recovery Plan, Impact Assessment and Risk
assessment to reassure the affected schools?
c)What are the consequences for schools if the Chief Finance Officer produces a
s114 notice during the period that the £10m is being utilised?
d) What governance is in place to keep the schools’ forum informed about SCC
applications for expenditure and draw down from the £10m borrowing facility?
e) Will the schools’ forum be able to veto an application for expenditure that they do
not wish to support or feel is out of scope?
f) Given that there is a very narrow range of schools-related services that this £10m
borrowing facility can now cover, then for s114 purposes where unallocated reserves
have to be available for the full range of Council services, then does that mean that
the Council cannot count the £10m as part of overall unallocated reserves for s114
g) What interest will be payable on any sums borrowed from schools reserves?
h) If SCC served a s114 notice, would the sums borrowed from schools reserves be
recognised as preferred creditors? If not, what creditor group would they fall into?
A3. Thanks to Mr Behan for the question but I need to point out firstly that the
premise of the question is wrong as this is not what Schools Forum agreed. In the
question Nigel says Schools Forum agreed to provide £10m of schools’ balances to
help SCC deal with the £24m overspend. This is not the case. The report presented
by the section 151 officer asked if in principle Schools Forum would enable access to
schools balances of up to £10m to be used to support invest to save and
transformational spend. This funding would not be used to offset in-year overspends
but the request was designed to give SCC maximum flexibility to support service
transformation across a wide range of Children’s services, but only those funded
currently by DSG.
There is no business case or recovery plan because this was only a request to
access funds in principle. If a specific need is identified, the s151 officer will go back
to Schools Forum with a report seeking confirmation that the Forum approves the
specific use and repayment profile. The use of school’s balances, if accessed at
some later date, has no effect whatsoever on in-year budget management and has
no bearing on the potential for a s114 report. I emphasise again – there is no risk to
any individual school’s balance.
Nigel Behan, Unite Branch Secretary said “The request from SCC to the School’s Forum (attached) contained little information on the proposed availability of how the £10 million could be used. Therefore we asked for an explanation. At least we have now been provided with some clarity on the purpose of SCC being able to access £10 million of Schools’ money.”