Paper 5d

Oxfordshire County Council

Schools Forum – 18 November 2010

Scheme for Financing Schools

1.Item for Decision

2.Purpose of Report

To consider and agree proposed changes to the Scheme for Financing Schools.

3.Recommendations/Actions for the Schools Forum

3.1To approve the attached draft Scheme for consultation with all schools, subject to any amendments arising from discussion of this item and the report on interest arrangements as set out in paragraph 6.

3.2To suggest entries for the Glossary (see paragraph 5.9).

4.Background

4.1The Scheme for Financing Schools is the formal document describing the relationship between the Authority and maintained schools. Whilst it cannot supersede any provisions made by legislation, it expands on the provisions of law and sets out specific local arrangements where it is possible to make local decisions on these matters.

4.2The Secretary of State has given up his previous powers to make changes to the Scheme for Financing Schools. Changes to the Scheme are now made where the Schools Forum formally agrees the proposals of the Authority. The Secretary of State retains a role only if the Authority and Schools Forum are unable to agree on proposed changes.

4.3Over time some provisions of the Scheme have gradually become outdated. The most recent changes were proposed and discussed during 2006 and implemented from April 2007. The Scheme does not reflect a number of name changes, updates to legislation nor the rollout of SAP to all schools. Therefore a comprehensive refresh has been undertaken.

5.Proposed Changes to the Scheme

5.1In order to make changes to any aspect of the Scheme, it is currently a requirement to consult all schools before the Authority and Schools Forum can formally agree the changes. For some changes, this consultation is an unnecessary burden on both schools and the Authority. In particular, this is the case for updating name changes e.g.DCSF to the Department for Education. The key changes proposed in this update will enable the Schools Forum to agree changes to the Scheme without consultation with all schools,where they agree with the Authority that a consultation is not necessary.

5.2A number of proposed amendments are effectively updates in respect of historic changes, for example finally removing any mention of Grant Maintained and County schools, amending DCSF and its forebears to DfE throughout etc.

5.3Changes in legislation have needed to be recognised, for example the Secretary of State no longer has any power to impose changes to the Scheme unless the Authority and Schools Forum have been unable to agree on proposals for change.

5.4A number of opportunities have been taken to simplify maintenance of the Scheme in future. Principally, this is achieved by giving Schools Forum powers to agree some changes,for example to the reporting frequency for financial monitoring reports and the date by which schools must submit their first budget plan of each year. Additionally, the opportunity has been taken to move annexes containing non-contentious information, such as the list of schools, outside the formal constraints of the Scheme. The detailed table of repair and maintenance responsibilities, however, remains within the Scheme and is unchanged at this review.

5.5DraftSchool Finance Regulations are currently out for consultation and will replace the regulations referenced in the existing Scheme. References to the latest legislation will be added into the Scheme, after completion of the consultation process on the Scheme, and after revised Regulations are made by Parliament. If the final regulations are revised from the current draft this may require some changes to provisions of the Scheme.

5.6Schools Forum will recall previous discussion, connected with the SAP rollout, of the threshold set out in the Scheme above which schools must seek counter approval for any contracts or payments. In the existing Scheme this value is set at £60,000, in accordance with the DfE standard Scheme, and which level has been unchanged for a number of years. However, the SAP approval matrix does not have an entry at that level, and accordingly, all school transactions above £50,000 are currently being routed to the Senior Management Accountant (Technical) for approval. Some coding issues had been identified in the early months of the SAP rollout, however, these are no longer significant in volume. The Authority therefore recommends that the threshold for officer approval for Oxfordshire schools should be increased to £100,000. This would be accompanied by introducing a new clause, which could be included in a Notice of Concern, such that a lower approval level could be specified for an individual school causing financial concern.

5.7Section 3 of the Scheme specifies the arrangements for bank accounts, the payment of instalments of budget share, and arrangements for interest on schools balances, whether surplus or deficit. All Oxfordshire schools currently subscribe to the Authority’s banking arrangements, therefore the existing text of this section has ceased to have any practical effect. It is proposed to replace the entire section with an abbreviated set of provisions. The paragraphs relating to interest on either surplus or deficit balances may need amendment after the decisions of Schools Forum at this meeting.

5.8The School Finance Regulations specify a requirement that the Scheme should include a provision describing “Circumstances in which the Local Authority may delegate to the governing body the power to spend part of the Authority’s non-schools education budget or schools budget …”. This does not appear to be fully accomplished by the existing Scheme, therefore a new paragraph 1.8 has been added to Section 1 of the Scheme. This sets out the arrangements which will apply where the Authority proposes to delegate additional responsibilities, and the associated resources, to schools.

5.9It is intended that further entries will be added to the Glossary, in order to assist users in understanding the abbreviations and references. Schools Forum is asked to suggest any entries they would recommend.

5.10It is intended to review sections on income generation in the Financial Manual of Guidance, in order that schools have updated information available should they consider increasing their income generation activity.

5.11Proposed text for the revised Scheme is set out in full in the attached annexe. In view of the significant number of changes proposed it has been set out alongside the existing text for comparison.

6.Recommendation for Forum

It is recommended that Forum approve the draft revisions attached, subject to any changes agreed at the meeting, to go forward for consultation with all maintained schools. It is suggested that the consultation should commence by the beginning of December and close 6 weeks later. Accordingly, the outcomes would be available for decision at the February meeting of Forum.

7.Contact Details of Lead Officer/Author

If you have any queries or comments in advance of the Schools Forum meeting about this report, please contact:
Name: Simon Pickard, CYP&F Finance Business Partner
Telephone Number: 01865 797512
Email Address:

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Version 1: 15 November 2010

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