School reserve balances are a “key issue” as nearly half of schools in Newport have an in-year overspend, a council report reveals.
Reserves are funds set aside to meet additional or unexpected costs. In the last two years, £2.7 million has been transferred from school reserves to fund overspending.
A Newport City Council report says that “many schools are still projecting an overspend in the current year” and the projected overall reserve balance at the end of the year is £1.7 million so “the ongoing sustainability of schools budgets is a key issue”.
Although the overall forceast for the year shows an underspend among Newport schools, 26 of 56 schools have an in-year overspend and will have “minimal” balances remaining at the end of the financial year – even after lost income from the coronavirus pandemic has been reimbursed.
Ten schools are anticipating an end-of-year overspend: one nursery, two primaries, six secondaries and one special school.
The cumulative deficit for these schools is more than £3.1 million.
Caerleon Comprehensive School is forecasting the biggest deficit of nearly £1 million, however this is an improvement on the year before where the deficit was more than £1 million.
All school sectors, bar primary schools, are forecasting an in-year overspend.
Despite concerns over some school balances, overall, schools are forecasting an underspend of £542,000.
This is an improvement on the position earlier in the year that has come about through reduced costs from school closures, a one-off grant funding of £320,000 for teacher pay from Welsh Government, and funding not needed for supply teacher costs.
The report will be discussed by Newport City Council’s cabinet on Friday (January 8).
