Twm Owen, Local Democracy Reporter
A unit for children unable to attend mainstream education accounts for almost half of a council’s predicted £9.3 million schools’ deficit.
Schools in Monmouthshire are on course to finish the 2026/27 financial year £9.3m in the red with the cumulative deficit for all 34 schools and the pupil referral unit (PRU) amounting to more than the funding allocated to them. The PRU is expected to finish the financial year with a £4.3m deficit.
Across the county 18 schools, including the PRU, have budgets which rely on drawing from the collective reserve fund held by all schools, which Monmouthshire County Council is ultimately responsible for.
A review of how the 18 schools are addressing their spending has been ordered by the council cabinet which was updated on its finances for the first quarter of the financial year at its October meeting.
Councillor Ben Callard the Labour cabinet member for finance said figures from April to June show the authority on course for an overspend, against its agreed £253m budget, by £464,000 which it believes it can control.
But he cautioned: “The report paints a positive picture excluding the schools’ deficit position which remains a concern.”
Conservative opposition leader, Cllr Richard John, said the schools’ deficit had grown by £2.5m in a year and asked what action was being taken to address the “incredibly worrying” figures he described as “completely out of control”.
Cllr Callard said he “fully agreed about the seriousness” of the predicted £9.3m deficit but denied there had been a “loss of control” and gave the example of the PRU which is set to account for £4.3m of the figure.
The cabinet member said: “Of that £9m £4.3m of it is regarding the pupil referral unit. This isn’t a school that has lost control of its budget it reflects how a different type of educational provision and demand has grown significantly since the pandemic.”
He said it was recognised a different funding model is required for the service as a recovery plan, demanded of all schools in deficit, “wouldn’t solve” the issue for the service.
“We will need to take a view on a sustainable funding model for the future and we’re expecting this to be brought forward ahead of the 2027/28 budget being considered by council in March,” said Cllr Callard.
Among the mainstream schools nine have agreed recovery plans in place while the council’s actions are focused on the eight who together are £600,000 short of where their recover plans say they should be.
The council has put enhanced monitoring in place, recovery plans have to include an educational impact assessment while schools in “higher risk” categories will require prior approval for new or replacement posts and controls on discretionary spending. The council could also use its powers to step in if actions aren’t agreed.
Heads and governors of any school seeking a “licensed” deficit, which is an agreement to spend beyond their budget, will also have to complete finance training.
Report
In September the full council ordered the cabinet to produce a report on tackling deficits without impacting on staffing and Cllr Callard said: “Recovery that is too fast or poorly designed can have a negative impact on school standards, inclusion and safeguarding so we need to make sure we are there in a supportive role and challenging where necessary to bring balances back into line.”
Cllr Callard said the council had also put more money towards schools since April 2023 including £2m “to stop deficits increasing” and an extra £1.6m for additional learning needs.
He said the Welsh Government’s announcement this week of £56m of extra funding this year to Welsh councils for additional learning needs, with the expectation 80 per cent is passed on to schools, would also assist them.
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