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?

Stripped to the bone...over years. What's next?

I mean, what's next for education and all these kids going through the school system?

This hasn't happened suddenly since September - the previous years under a different government will have led to this point - the money they've had this year is in respect of the 2023 Autumn Census.

No it means they've set a balanced budget, just, by planning to spend all their reserves this year.

Are you ignoring 14 years of Tory underfunding? Labour can't just magically fix that in less than a year although they are on the right track with unwinding things like private school charitable status and academy privileges etc.

It's absolutely miserable to be a governor in a school with a deficit, especially a small rural school. We battled with our LA who was insisting on going to three classes (across all year groups) to save money and managed to keep our PAN where we wanted it, attracting new families and encouraging as many younger siblings to join reception as we possibly could and we are now starting to recover (with four year groups). Going to three year groups to save money would have spiraled into the end of the school.
But all the schools near us are in deficit. Academies are managing slightly better as they share core roles and staff are better supported but I've genuinely come out of governor meetings in the past fearing for our kids.
I would also question the skills of the LA bursar/financial advice we received...

Tbf OP it’s a lovely idea but teachers pensions are so massively expensive that your donations arent going to get close to helping with the cost of keeping the employment of one.

im surprised that SBMs set budgets when I was a school governor the LAs finance department did as a business partnering service. They were very poor accountants, but were at least finance professionals.

that school was carrying a deficit because a previous headteacher had misappropriated funds and the school was paying them back

More children being babysat by cover supervisors, larger class sizes, fewer glue sticks, the few teachers who are left continuing to buy pencils and paper would be my very educated guess.

Let’s remember that teachers pay 10% of their salaries into their pension funds.

That’s neither here nor there. Their employer pays them that plus pays 30% of their salary into TPS as well as employers NI. It’s an extremely expensive pension- one of the most expensive.

Good. I’m looking forward to it after 26 years of hard work.

And who can blame you!

it is one of the reasons schools are so cash strapped though.

My employers all paid 23%. Perhaps moving forward, the TPS can be watered down - I don’t think that will help the recruitment and retention crisis, though.

School applies for a licenced deficit which is an agreement to reduce the deficit.

They may also look at becoming an academy. generating income by increased lettings, and providing training to other schools at cost. Reduce hours to fall below the NI threshold for part-timers. Hope for natural wastage and bring in lower paid staff, reduce TAs, look at shared SLAs and reduce staff support around mental health, OT, etc. Consider reducing to a 4.5 week to reduce cover. Look at anything they subsidise and increase the cost to parents etc.

If classes are not full they are losing income. Return deputy, other SLT back into class to reduce SLT. costs. Review maternity and staff absence insurance.

There is no way to know where they can save money without reviewing the situation and impact of the provision.

It’s increased since, and will continue to. I suspect it’ll just have to be watered down but maybe after similar jobs have been (university lecturers local authority etc) so there isn’t an alternative option anyway

Most school business managers these days are finance professionals. I work in several schools and even my teeny tiny infant school has a qualified accountant as a SBM. They are only employed for 4 hours a week though.

The pension contributions are a massive part of the budget but tps is an unfunded scheme and those contributions just go to the treasury. Who then pay the existing retired teachers pensions. I've no doubt it will one day change, but the existing liabilities will still be paid out.

Just looked up my child's school and it has a deficit of more than £300k! I haven't noticed any particular issues with it.

The pay is also low for the level of education, skills and responsibilities. The good pension is there to make up for the poor pay (workplace pensions are deferred salary).

There is an argument to be had to lower pensions and increasing pay (but the government has poo-poo'd the idea - if they raised pay then they have to pay for it now whereas keeping pensions at the level they are at now minimises the impact now and kicks the can down the road for another government to deal with).

I don’t begrudge teachers their pensions at all, but the reality is it’s a very large cost of employment that they have no flex over. No point dancing around it talking about PTA contributions or buying fewer laptops or not providing tea bags.

The latest NIC increase isn’t being fully funded which is going to impact budgets