Agenda item
Schools Finance Update - 2012/13
This report provides an overview of the current situation regarding financial management in Brent Schools. It provides an update following a more detailed report that was presented to the Children and Young People Overview and Scrutiny Committee on 19 July 2012.
Minutes:
Mustafa Salih (Assistant Director, Strategic Finance – Children and Families) introduced the report to the committee, noting that it provided an update on the current situation regarding financial management in Brent Schools. This followed a more detailed report which had been presented to the committee on 19 July 2012. The meeting was reminded that the financial management of schools was a function that was delegated to schools’ governing bodies. However, the council’s Section 151 officer retained responsibility for ensuring that sound financial systems and controls were in place. Furthermore, the council held an overall responsibility to ensure that the public funds provided to schools were spent appropriately. The council therefore maintained a strategic and supportive role in relation to the financial management of schools, conducting regular internal audit reviews and providing regular guidance updates, training sessions and seminars for schools.
Mustafa Salih explained that the report focussed on three key issues which had been identified previously as requiring improvement. These were; the outcomes of internal audit reviews, failure to comply with the School Teachers Pay and Conditions Document (STPCD) and, schools having entered into unfavourable leasing arrangements. Action plans had been developed and implemented for the latter two issues and improvements could be evidenced across the board. The fifteen audit reports that had been issued as part of the 2012-13 schools audit plan had demonstrated a much improved position from that achieved in 2010/11 and 2011/12, with the proportion of schools receiving Substantial assurance having increased from 35 to 80 per cent. Turning to the issue of compliance with the STPCD, Mustafa Salih advised the majority of Brent schools were now compliant. A few schools had been asked to provide additional supporting documentation to evidence their decision making around pay levels for senior posts. With regard to schools entering into unfavourable leases, the council had identified this problem in 2010. As the schools in question did not have the legal power to enter into these leasing arrangements, the Council was of the view that they should be treated as void from the outset. In addition to implementing an action plan to more broadly address the issue through the provision of advice and guidance, the council continued to work to extricate the worst affected schools from their costly finance leases. The council was prepared to contest any finance lease in court and at present, one case was due to go to trial before the high court in early 2014; the council was confident of success in this instance. However, the council had also successfully engaged in negotiation with some of the finance companies in question and would continue to do so where appropriate.
In concluding, Mustafa Salih noted that a Schools Finance Conference had been held on 31 January 2013 and almost every school had attended. Workshops had been held around different aspects of schools finance and up to date guidance had been provided. The council would continue with its approach to supporting good financial management in schools and would continue to monitor the situation.
During members’ discussion the committee sought further details regarding the fifteen schools audited as part of the 2012/13 schools audit plan, noting that these were necessary in order to identify whether the sample was representative. It was noted that the committee had previously been assured during its discussion on 19 July 2013 that a heightened level of financial training could be incorporated into the induction training for governors and an update was sought on this matter. It was further commented that a balance should be maintained between expert and lay members of boards of governors and it was therefore important to actively recruit governors with suitable professional skills. The committee suggested that the council’s governor support service could assist in identifying skills and could act as a signposting service. The committee queried how many schools had sought advice direct from the council’s HR Services Manager and queried what efforts had been made to improve the dialogue between the council and Brent’s schools. It was further queried what the cost had been of bad financial practice in Brent’s schools and how much had been saved as a result of the actions taken to address this. Mrs Gouldbourne (committee observer and Chair of the Brent Teacher’s Panel) advised that changes to the STPCD from September 2013 meant that national pay scales would be removed and schools could set their own pay arrangements. The Teachers’ Unions had proposed that a pay policy be developed between the Teachers’ Unions and the council which could then be recommended to schools and it was queried what progress had been made with regard to this.
In response to the queries raised, Mustafa Salih advised that details of the fifteen schools could be provided to the committee. All maintained Secondary schools were audited annually and primary schools were audited on a three year cycle. Sara Williams explained that she was confident that the improved outcomes of the audits for 2012/13 were indicative of a general trend, resulting from actions taken to address some of key issues identified and noted that the results of the audits were good but not outstanding. The council would continue to work to further improve outcomes. Mustafa Salih added that where schools had financially penalised themselves by entering into unfavourable leasing arrangements, subsequent action taken to cancel these had saved Brent’s schools approximately £1million. The overall cost of the unfavourable leasing arrangements to Brent’s schools would be calculated and provided to the members of the committee. With regard to the school governors’ induction programme, this did include a finance element but it was agreed that this would be reviewed in accordance with the committee’s suggestion. It was highlighted that the council had held a very successful Schools Finance Conference in January which had incorporated several different workshops.
Mustafa Salih further advised the committee that the exact number of schools that had approached the HR Services Manager directly was not known. Sara Williams explained that communication with schools took place via a range of media including a fortnightly bulletin which highlighted important developments. The schools’ extranet was used as a repository for important documents. Meetings were also held with head teachers and Chairs’ of governors. With regard to the changes to the STCPD, guidance was currently being developed that would be distributed to schools. The council was also looking at how other London authorities sought to address the issue to identify best practice. Turning to the role of the governors support service in helping to address skills gaps in schools boards of governors, Sara Williams advised that this was something that could be explored further. Councillor Arnold (Lead Member for Children and Families) noted that there was a national service for identifying governors and reiterated the importance of having both governors with professional skills and those who were committed individuals from the local community.
With reference to the query concerning the number of schools that had approached the HR Services Manager, the Chair commented that it would be helpful in future reports for any such statements to be evidenced with the relevant figures.
RESOLVED:
(i) that the report be noted;
(ii) that an update report regarding Schools Finance be brought to the committee on an annual basis.
Supporting documents: