School budget crisis looms

School budgets are projected to fall off the cliff edge, with Newtown High School predicted to have a budget gap of over £2 million by the end of March 2027.

With the figures showing a total budget gap of nearly £15.8 million in deficit by the end of March 2027, and nearly all secondary and all ages schools facing financial crisis with one school forecasting a deficit of nearly £3 million by March 2027 - there is a crisis facing schools in Powys.

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At a meeting of Powys County Council’s Learning and Skills scrutiny committee on Monday, July 15 councillors and lay independent members looked at schools financial performance for 2023/2024 and looked ahead to the budget plans for this financial year which also included the projections up to March 2027.

School governing bodies had been given a May 1 deadline to submit their budgets to the council.

School finance officer Nancy Owen explained that this year schools will receive 4.2 per cent more funding this year than last year.

This takes the total delegated schools budget up to £87.4 million- out of a total council budget of £340.7 million for this year.

But she stressed to the committee that future school budgets had to assume a “cash flat position” with no increase expected in the school’s delegated budget for several years.

This is due to the gloomy predictions that the Welsh Government will not increase funding to local authorities in the near future.

Ms Owen explained that for the 2024/2025 financial year schools have planned to spend £3.3 million more than the council has budgeted for them.

Considering movements from reserve accounts Ms Owen said: this would leave an estimate £2.4 million deficit at the end of the March 2025.

Liberal Democrat, Cllr Angela Davies was attending her first meeting of the Learning and Skills committee in just over two years, she had previously been a lay member before being elected to the council in May 2022.

Cllr Davies said: “Are we at the point where there is simply not enough money and no matter how much hand holding and officer support, schools will never be able to balance their budgets.

“It just feels like deja-vu – this support work has been done for years and here we are still with charts that have an awful lot of red.”

Ms Owen said that the council is “trying significantly” to suggest ways for schools to “mitigate” any problems that occur before getting into dire financial straits.

Ms Owen: “Ultimately it’s the governing bodies decision what budget it puts forward and once we have those, we work with them.”

Committee chairman, Conservative Cllr Gwynfor Thomas said: “We don’t underestimate the work that is going on, but we have some massive deficits and schools aren’t coping.

“School are saying to there’s no more low hanging fruit left, there’s nowhere to go and it’s either curriculum or teachers that are going by the wayside.”

He believed that “no matter” how much work was being on school budgets some just “can’t” get them to balance.

Conservative group leader Cllr Aled Davies stressed that the concerns should not just be financial but how this “impacts on pupils and the education they receive.”

He wanted to see how class sizes, teacher and support staff numbers had changed in recent years.

The report including comments from the scrutiny committee will be discussed by the Cabinet in a meeting at the end of the month.

The committee decided to enter confidential session to discuss individual school budget problems.

Predicted financial position of secondary schools in Powys:

All school totals for all primary, secondary, all through and special schools is March 2024 -£891,622 surplus – March 2025 – £2,362,579 deficit – March 2026 – £7,587,737 deficit – March 2027 – £15,784,014 deficit.