Schools £7.2m surplus comes with ‘significant health warning’

SCHOOLS in Carmarthenshire have posted a remarkable £7.2 million surplus after being £2 million in deficit the previous year.

But the council’s head of education, Aneirin Thomas, warned a committee that this turnaround came with a “significant health warning”.

Mr Thomas and his officer colleague Susannah Nolan explained that an influx of Welsh Government grants, combined with savings made by schools while they were closed during the Covic pandemic, masked underlying and continuing budget pressures.

They said some schools had made genuine financial improvements but that others had used the extra Welsh Government grants to pay for core teaching.

Addressing the council’s governance and audit committee, Mr Thomas said: “There are still significant challenges we face in terms of our delegated (school) budgets.”

There were 52 schools in the red and 58 in the black at the end of 2019-20. This year there were 28 in the red and 82 in the black.

Mr Thomas said the council could consider three options for schools in deficit: allow the deficit to carry on, see what extra funding the council could provide – which would affect other departments – or have a “long-term conversation” about the footprint of schools in Carmarthenshire and the cost of sustaining them.

Chris Moore, the council’s director of corporate services, said simply continuing with deficits was “not acceptable”, although he added that the unusual circumstances of 2020-21 had put schools in a better financial position.

Mr Thomas said he was concerned that the influx of grants had not actually benefited pupils and staff as much as the education department would have liked.

He added that a lot of grant funding had arrived late in the year, with some of it not being allowed to roll over into the next academic year.

Grants had “caused chaos”, he said, and resulted in additional stress on school leaders. Mr Thomas said the money was, however, welcome from a financial perspective.

Committee members were keen to know how many schools were significantly in the red, how the council addressed deficit schools, and what progress had been made.

Mr Thomas said the department was “really concerned” about three schools in particular, and had ordered an independent review of one of them to better understand why historic deficits had accumulated. He said that school had finally posted an in-year surplus.

Mr Thomas said over-staffing and budget management issues were reasons for a school going into deficit, and he listed the various interventions which officers could pursue.

But he warned that dealing with such schools used up a lot of the education department’s resources and time.

A small number of schools with low pupil numbers have closed in recent years in Carmarthenshire. New schools have also been built.

Councils have a legal responsibility to review the number and type of schools they maintain, and whether they are making the best use of the resources and facilities to deliver the right educational opportunities.

A consultation on a proposal to shut Ysgol Gynradd Blaenau, near Llandybie, and Ysgol Gynradd Mynyddygarreg, near Kidwelly, closed on July 16.

If a decision to approve the proposal is made in due course, Blaenau pupils to transfer to a new Ysgol Gynradd Llandybie, and Mynyddygarreg pupils would transfer to a new Ysgol Gymraeg Gwenllian.