Schools cash clawback row deepens in West Berkshire

The Downs School has appealed to the Department for Education to intervene in the cash claw back row with West Berkshire Council.

It says the council’s decision to demand £490k back from the school – much of it generated by fundraising efforts – was and is procedurally unfair.

And it claims the ‘abrupt u-turn’ has required it to turn around information, subject to incredibly short deadlines, on committed balances with no view or consideration to its three-year budget projections or salary commitments.

A lengthy letter has been sent to the Government outlining the school’s grievance with the council, which infuriated schools in the district when they were told to return cash balances to the council in June this year – a year earlier than agreed.

The council is trying to raid school bank accounts for around £2.4m – so it can reduce a £9m debt in its budget for special needs education.

In a highly critical letter the school says throughout the decision-making process, the authority has shown a total disregard for the wellbeing of school staff.

“In a climate where schools are struggling to balance budgets whilst, at the same time, charged with, and seeking to, provide the best possible education for their pupils, it is our position that it has been penalised for working incredibly hard to generate income to independently provide the best possible education for the pupils of the school,” it says.

“It must be emphasised again that the school will go into a deficit position in 2025/26 if the surplus budget is clawed back.”

At the West Berkshire Schools Forum on October 16, 2023, approval was granted for a consultation to take place with local schools on the Scheme for Financing Schools (2023).

Among other issues, one area consulted upon was whether a clawback mechanism should be added to the Scheme for Financing Schools (2023).

This followed a recommendation from the Heads Funding Group that such a mechanism should be introduced for those schools with balances of greater than 10 per cent of their budget share.

At the Schools Forum Meeting on December 19, 2023, it was agreed that a mechanism for clawback for schools with surplus balances exceeding 10 per cent of their budget share should be introduced from March 31, 2025. This was agreed by the potentially affected schools as it provided them with adequate time to prepare.

The Downs School claims that around the same time, its Direct Revenue Finance request for £500,000 was approved by the local authority. This money is intended to contribute to the summer 2025 sixth form expansion.

Around mid-July of this year, the school was informed that it would be subject to a clawback – beginning from March 2024 – of £490,000 because its surplus balance exceeded 10 per cent.

The school further claims it and other affected schools, were prohibited from participating in a vote on the move to pull the clawback forward a year.

“We disagree with the decision of the LA to claw-back £490,000 from the school due to the fact that a large proportion of the school’s surplus is self-generated income,” says the letter to the DfE.

“This surplus does not simply comprise of unspent funding.

“In fact, it contains self-generated income that has been produced by the hard work of staff and the parent body in raising money for essential school projects over a three-year period.

“This money has been raised to allow the school to increase much needed classroom capacity and extend the sixth form to accommodate growing numbers.

“Examples of this self-generated income include the £147,000 generated through the school’s charitable trust, significant managed lettings and a profitable in-house catering function.

“It is our position that it would be fundamentally unfair to strip the school of these self-raised funds as the LA proposes to do.

“Further, it was specifically set out in the consultation of December 2023 that self-generated income would be ringfenced and therefore specifically excluded from any clawback. The LA has therefore breached its own guidance in this regard.”

It says if the school does not have access to this money due to the clawback, these essential projects cannot take place, which will have a direct impact on students and the school’s ability to deliver a first-class curriculum.