What does "school in deficit" really mean in real term?

[Rekka]

I was just disheartened finding out our beloved primary school is in huge deficit. It probably has been for years, but this is the first time I looked up online for information.

The school is LEA led school and the headteacher and her staff have worked so hard so tirelessly year in year out. They genuinely care about our children and they have been making endless efforts to listen to parents and improve the wellbeing and development of the children under their care.

I feel really really sorry for the current situation with school funding. I intend to set up a monthly donation to the school bank account. But I'm also curious to know what the financial deficiency really means in real term. I know they need to balance the account by making more difficult decisions. But what if they can't balance the account even with their best efforts? What happens to the deficiency generated in previous years? Did the LEA fill the bills as a plan to the school?

I can't forgive the government for carrying on with what the Tories had done bringing down the education to its knee and the entire generation of children to take the consequences. They don't care, do they?

@Rekka - yes they do not care and they prioritise NHS over Education, every time. Because children do not get a vote. This is why parent activism is on the rise and parents all over need to demand better for their children.

They may be in yearly deficit but have carry forward which is (for now) bankrolling them. They cannot set a deficit budget they cannot fund - the LA will step in at that point to manage their budget and you are right, decisions to cut costs will be made. Given the huge proportion of spending that is staff costs, that's where the axe goes. Fewer TAs, having a headteacher of your own if its possible to share an executive headteacher with another school...

How big is the school and is it full? Pupils = cash so small classes are a problem, they might balance the books by reducing PAN if they have too many spaces for example.

How do you know this? Maintained schools don't publish financials?.

The problem most LAs have is that overall, schools are carrying huge historic surpluses. There are some schools that don't, some carrying genuine deficits (and being supported by LA) and very many who have what they refer to as in year deficits.

This means that they need to use reserves to balance this year's budget, I.e. they are spending more money than they have coming in this year,meaning they have to spend reserves built up in previous years, a bit like you using savings because COL increases mean your income is less than your outgoings this month.

The issue for the LAs is that this money was given to schools to be spent on children, not "saved". It runs to millions in our LA, while schools still claim poverty because they can't balance this year's budget.

The reality is redundancies - both teaching and support staff. I could be wrong or it could be down to location but I question whether there is a teaching recruitment crisis. Many redundancies are happening right now and there are 5 or 6 candidates shortlisted per post.

Sad times.

It is available on financial-benchmarking-and-insights-tool.education.gov.uk (before that was a tab on Compare School Performance).

OK, so I've just looked at the last school I worked at, and they have a deficit of £62k, but revenue reserves of £1.1m...It's right that money is spent before more is provided by the taxpayer.

You will also be able to find out information in the Governors minutes as budgets have to be discussed and approved at governing body meetings. If they're not on the school website, they can be requested as they're public documents once signed off.

Our school has an in-year deficit of £72k and a reserve of an exact same amount. Does it mean it's been filled by the LEA?

I see what you mean. But it's incredibly irresponsible and very shortsighted in 15-20 years time.

It means the SBM has worked their arse off to create a balanced budget.

What does it mean?

What is a SBM?

drawing down on reserves isn’t creating a balanced budget

It means that this year they don't have to make anyone redundant but next year they will have to reduce costs by £72k unless their income increases.

£72k is roughly the cost of a class teacher. So, one less teacher or 2 fewer TAs.

It also means the school has no wriggle room at all for unexpected repairs/bills etc

It means at the end of the year, the reserves will be zero. It also means that ahead of next year they will need to find savings of at least 72k (probably more due to salary increases etc). I would expect to see two TA's and one lunch time supervisor disappear this year.

Schools are supposed to have 5% of thier budget or about 1 months salary in reserves as a rule of thumb.
bigger reserves could be built up if they know a big project is needed, but money is generally supposed to be spent on the cohort it was received for.

If they have 72 in year deficit and 72 carry forward, the issue is years 2 and 3 of the budget. What savings are they making to balance the books in those years.

There really is a teacher recruitment crisis, although older, expensive teachers are often managed out to be replaced by cheaper newly qualified teachers, many of whom leave the profession or move abroad to teach.

@amigafan2003 @SanCelestino , there were already a couple of TAs left this year without being replaced. Another learning mentor who's been in the school for over 30 years.

Do labour MPs send their children to private schools so they can keep their eyes shut and heart locked away?

Our PTA has been bringing more funds in the past few years, but this will never match the scale of funding cut and inflation.

I've set monthly donation to school's account. Not a large number, but to make up those PTA events I've not participated (can only juggle that much with a FT job).

Our secondary schools are full to bursting, but falling birth rates mean that the primaries in the authority I work in are shedding staff due to falling numbers. Losing 60 kids a year at y6, and gaining 30ish in nursery year on year means restructuring ahead. Mixed age classes again for the first time in 20 years. And staff redundancies. We're losing 2 teachers and 2 TAs.

No, LA’s don't have any money either, some in deficit, massive adult social care and SEND overspends. Thank Conservative government for your cuts.

Some LA’s have been issued with a section 114 due to finances.

For individual LA maintained schools, it is illegal for governors to set a deficit budget.
In my LA, first step is governors have to write and submit a three year recovery plan to the LA School’s Finance Team. If this is approved, the LA will licence the deficit ( let them run a deficit knowing that over three years the situation is improved).
The recovery plan can include anything to save money and is based on income from projected pupil numbers. Savings maybe redundancies, shared headshots, change of contracts for services, reductions to cleaning hours etc.
In my LA we have a number of school closures, a combination of low pupil numbers and no chance of projected numbers increasing the roll.

A note too that there is a huge discrepancy in government funding to LA’s, including the per pupil payment. My LA is at the bottom end of what is paid per pupil.

What is this country turning into????😭

They’ve been in power for 8 months. These cuts are not new.

Without putting equivalent amount of funding in, in the midst of inflation and the NI increase, it's a passive form of funding cut? While, at least I thought Labour would care more about our children than the Tories...

Not turning…turned. These issues were happening long before Labour were elected. My LA closed 18 schools between 2016 and 2023.

And of course, those who moan about higher taxes or losing their winter allowance, this will continue to happen.

SBM - school business manager