Agenda item

The report was for noting and required no decision to be made. The report highlighted the financial position of maintain schools across the sector. The balance position was reported to have moved sharply from a small over surplus in 24-25 into a net deficit at the end 25-26.

 

61 out of 65 budgets were submitted on the 2^nd June, with further school budgets having been submitted. Salik wished to thank maintained schools’ colleagues for their efforts. The subsequent outcome of the budget submission was 45/61 maintained schools were projecting a deficit in 2026 – 2027, were aggregate deficit from £9.83 million to £28 million by 2029-30. The forecast from July 2025 noted a £17m deficit, which Salik highlighted was an improvement and as a result of a number of factors, including the LLC intervention programme. He further added that the deficit can be attributed to a number of structural causes, which included falling pupil rolls, fixed leadership and premises costs, pay inflation, and costs related to emerging needs not yet covered by EHCP funding.

 

The report also highlights the formal intervention framework, including the school sustainability work stream, the introduction of the budget policy, the licence deficit panels, financial planning assumptions, training, monitoring and external specialist review and the School Place Planning Strategy 2026 – 2031. The Strategy also notes that due to uneven distribution, the pressure on some schools remains more acute when compared to others.

 

Kate Nicholson questioned how many maintained schools are currently at capacity and how that correlates with those perceived as not being sustainable. Salik replied that understanding the financial position of these schools is in preliminary stages, where capacity against the rolls, currently data is being worked through.

 

 

 

Action: Salik to check with service whether data regarding capacity against the rolls can be shared with Forum members.

 

In response to Peter Leatherland’s question, Salik noted the current balance as of the 31st of March was £9.7m

 

Dominic Lane noted there has been a £17mn saving and also £28m deficits, he questioned how much of the amount encompasses savings to pension and not efficiency. In addition, what corrective plan of action there were in reducing the debt further.

 

Tim wished to highlight that they are not saving and it is cost avoidance. He further explained that work continues to be undertaken, which looks at refining the forecasting arrangements, which differs from school to school. Oversight of this is through Schools Suitability Programme, where the Schools Sustainability Board oversees the work with actions to put in place to address the accumulated deficits, which by in larger are being caused by falling rolls.

 

It was noted that some schools struggle within certain areas of the County due to viability and sustainability. Academies have been reluctant to take on schools with deficits. Financial experts are currently reviewing the budget reports submitted, where feedback shall be expected in due course. The School Organisation Programme shall be prioritised around the growing deficit.

 

Tim outlined possible solutions for schools with persistent deficits, such as combining infant and junior schools, amalgamations, academisation, or, as a last resort, closure. The Board will prioritise actions based on detailed budget reviews and local needs, with regular updates to the Forum.

 

Further to this, Dominic wished to clarify whether there is confidence in the reason for these deficits are due to falling rolls. Tim expressed that there shall be high support and high challenge, where leadership and governance, school structures, school standards expenditure (accumulative and projected debt) shall be reviewed, where corrective action shall be taken should there be any other issues. Tim wished to highlight that Leicestershire is a low funded Local Authority. Though there are falling rolls in rural areas, there is also expansion and development of new schools (around 45 new schools over the next 10 years).

 

Tim highlighted the wellbeing and support offers for headteachers facing challenging financial situations, including contingency planning, training, and responsive support from Lisa Turland's team, with escalation procedures for urgent concerns.

 

Jude wished to add, seemingly there will be a build-up of stock and whether this would be a solution to the challenges that SEND currently face and whether the Local Authority were open to repurposing these provisions. Tim noted that they are exploring all opportunities and are open to repurposing, however mindful that it shall be based on individual circumstances. He further added that consideration shall include looking at existing provision in the area, viability of transport and challenges around building restrictions and ownership as well as building quality. All options will be considered, should a school currently cease to be viable then alternative provisions shall be sought.

 

Alex Clarke wanted to understand how the Housing Strategy would impact and affect school place planning. He also highlighted that the low pupil numbers currently being experienced in primary schools shall, in a few years, become a challenge for secondary schools. Tim acknowledged the point raised and added that the developments shall compensate this, where there is a projected number of secondary schools to be built over the next 10 years. The team shall ensure they are not undermining existing provision and look to expand existing schools (both primary and secondary), which will support in increasing viability and build stock. Any opening of schools shall be done so in a phased way so not to destabilise the system. Currently, the district approves plans, but due to the Local Government Reorganisation (LGR) there are some unknown implications which may arise. Further details on this shall be known in due course. This may affect catchment areas.

 

Pete questioned whether the plan would come to Leicestershire Schools Forum to be reassure that money is being saved and for Forum member’s visibility. Tim shared that Salik continues to work on policy framework. Should a school not be able to set a balanced budget, then the school must apply for a license deficit from the Local Authority. They must also have a debt recovery plan, this will be scrutinised and overseen by the Schools Sustainability Board. Priority actions to return to a balanced budget position will be agreed with each school. A meeting with all maintained primary heads will be scheduled in the autumn term to set out the next steps in supporting a programme of School Sustainability.

 

 

Phil Lewin questioned how much of information in the report has been shared more widely and what mechanisms the Local Authority were using to manage maintained schools and academies. Tim noted that the report is in the public domain and the public are welcome to join the Forum. Tim shared that not all schools wish to become an academy as they wish to retain their autonomy. Some schools may not be able to become an academy or join an academy trust, due to deficits and falling pupil rolls. Open and honest discussion shall be had in conjunctions to work with schools.

 

Jude wished to raise and understand what support there was for headteachers in these challenging circumstances. Tim noted that he is in attendance at Leicestershire school meetings to raise concerns and have discussions. Communications have been published to offer reassurance. Contingency measures such as a budget line of 5% will be discussed. The team have been responsive to the changing patterns of identified needs. It was noted that there are wellbeing offers of support to headteachers. It was shared that The Education Effectiveness Partners work very closely with maintained heads and offer significant support in a timely manner.

 

Dominic sought clarity on the Local Authority planning assumptions and whether this was a first-time model that had been implemented. Salik noted there had been a change in the methodology. He added thorough guidance had been written, which also included narratives and questions. There has been improved governor training, workbooks and model scenarios given to support schools. There has been training and workshop with DfE and guidance package given to schools within the last 6 months. Further training is being provided during the Autumn Term.

 

Salik explained the 2025-2026 budget submission consisted of two submissions, one which was based on financial assumptions, which were consistent and comparative locally. The second budget submission was based on 0% inflationary assumptions. In April, budget guidance and workshops were issued and offered. A new software ‘Accessing Local Authority’ was also used, where training was provided for schools. Salik noted that the £17m encompasses the ICFP and restructures. He also shared there are recovery plans for individual schools, where there has been commissioning of a consultant firm, who are robustly reviewing all school budgets.