Scheme for the financing of schools

The purpose of the scheme is to define the financial relationship between the local education authority and its maintained schools.

As required by Section 48 of the School Standards and Framework Act 1998 and subsequent regulations.

Applies from 1 April 2024

List of Contents

Section 1

Introduction

1.1 Purpose of the Scheme

The purpose of the Scheme is to define the financial relationship between the local authority (LA) and its maintained schools. The Scheme details the financial management arrangements that the LA and its schools are required to adhere to based on the provisions of sections 45 to 53 of the School Standards and Framework Act 1998 (The Act).

1.2 Application of the Scheme to Maintained Schools

The maintained schools in Swansea Council to which this Scheme applies are listed in Annex 1.

The Scheme does not apply to Pupil Referral Units as these units do not have delegated budgets.

1.3 Delegated Powers

Subject to the provisions of the Scheme, governing bodies of schools may spend budget shares for the purposes of their school or for any additional purposes that may be prescribed in regulations made under section 50(3) of the Act.

To be clear, regulations stipulate that the schools' delegated budget should not be spent on anything that does not directly relate to the provision of statutory education of its pupils. This includes subsidising third-party use of the building, hospitality for staff and any other non-educational use.

Individual governing bodies are required to consider and record in their minutes the extent to which their powers are delegated to the headteacher of the school (and any revisions). Such decisions by the governing body are subject to requirements of regulations made under section 38 of and schedule 11 to the Act.

A new school shall have a delegated budget as from the school opening date unless determined otherwise within the provisions of section 49(3) of the Act.

1.4 Suspension of Delegation

If the provisions of the Scheme are substantially or persistently breached, a budget share has not been satisfactorily managed or intervention is exercised in accordance with sections 14 and 17 of the Act, then delegation may be suspended subject to a right of appeal to the Welsh Government except where supervision is exercised under section 17 of the Act.

1.5 The Funding Framework/School Budgets

The funding framework which replaced Local Management of Schools is based on the legislative provisions in sections 45 - 53 of the School Standards and Framework Act.

Under this legislation, local authorities determine for themselves the size of their Schools Budget. The categories of expenditure which fall within the Schools Budget are prescribed under regulations made by the Secretary of State, but included within the Schools Budget is all expenditure, direct and indirect, on an authority's maintained schools. Local authorities may retain funding for purposes defined in regulations made by the Secretary of State under Section 46 of the Act. The amounts to be retained centrally are decided by the authority concerned, subject to any limits or conditions prescribed by the Secretary of State. The balance of the Schools Budget left after deduction of centrally retained funds is termed the Individual Schools Budget (ISB).

Local authorities must distribute amounts from their ISB amongst their maintained schools according to a formula which accords with regulations made by Welsh Ministers, and enables the calculation of a budget share for each maintained school. This budget share is then delegated to the governing body of the school concerned, unless the school is a new school which has not yet received a delegated budget, or the right to a delegated budget has been suspended in accordance with section 51 of the Act. The financial controls within which delegation works are set out in this Scheme made by the LA in accordance with Section 48 of the Act and approved by the Secretary of State. All revisions to the Scheme must be approved by the Swansea Council's School Budget Forum.

1.6 Budget Distribution

The distribution of the ISB amongst maintained schools will be by formula in accordance with regulations made under section 47 of the Act and published annually as described in paragraph 1.7 below. This formula will enable the calculation of a budget share for each maintained school. This budget share is then delegated to the governing body of the school concerned.

1.7 Publication of the Scheme (and other related documents)

Section 52 of the Act requires the publication of a budget statement detailing:-

the budget share for each school
the formula used to calculate schools' budget shares
the detailed calculation of the budget share for each school

In addition an out-turn expenditure statement is required after the financial year detailing:

individual school expenditure
centrally retained expenditure
balances held in respect of each school

Statements will be subject to audit certification and may be collated and published by the Welsh Government.

Publication arrangements are set out in separate regulations which require that every headteacher and governing body of each school receives a copy of this Scheme and any subsequent amendments, as well as budget and out-turn statements in so far as they relate to that school or to centrally retained expenditure.

1.8 Scheme Revisions

Scheme revisions will be subject to approval by Swansea Council's School Budget Forum. The Forum may-

(a) approve any such proposals;

(b) approve any such proposals subject to modifications; or

Where the Forum approve any revisions to the scheme, they may specify the date upon which any revised scheme is to come into force.

Where the Forum refuse to approve proposals submitted under paragraph 2A of Schedule 14 to the 1998 Act, or approve any such proposals subject to modifications which are not acceptable to the local authority, the Authority may apply to the Welsh Ministers for approval of such proposals.

The Welsh Ministers may:-

(a) approve any such proposals;

(b) approve any such proposals subject to modifications; or

Where the Welsh Ministers approves any revisions to the scheme, they may specify the date upon which any revised scheme is to come into force.

No revised scheme is to come into force unless approved by the School Budget Forum or the Welsh Ministers.

1.9 The Role of the Local Authority and its Schools

The LA has the responsibility for setting the policy framework for the Education Service and for managing that part of the resources for Education which it will retain centrally in accordance with regulations made under section 46 of the Act.

It will be the responsibility of each school's governing body to manage its budget share for implementation of the School's Development Plan.

The intention of the Scheme is to allow governors and headteachers as much discretion in the management of delegated resources as is consistent with the LA being able to fulfil its statutory responsibilities.

Details of schools' responsibilities for additional learning needs can be found in the ALN Schools Principles paper. The governing body of a school is required to consider the extent of delegation to the headteacher and to record its decision (and any

revisions) in the minutes of the governing body. Any such decision will be subject to any regulations made under section 38 of the Act.

1.10 Maintenance of Schools

The LA is responsible for maintaining the schools covered by the Scheme, and this includes the duty of defraying all the expenses of maintaining them (except in the case of a voluntary aided school where some of the expenses are, by statute, payable by the governing body). Part of the way an Authority maintains schools is through the funding system put in place under sections 45 to 53 of the Act.

Section 2

Financial Controls

2.1.1 Application of Financial Controls to Schools

Schools must comply with the Authority's Financial Procedure Rules (FPR's) and Accounting Instructions (AI's) devised for schools.

2.1.2 Provision of Financial Information and Reports

Schools will be required to provide the LA with details of anticipated and actual expenditure and income as determined by AI.1. Submission of details will not be required more than once every three months except for those connected with tax or banking reconciliation, unless the LA has notified the school in writing that in its view the school's financial position requires more frequent submission or the school is in its first year of operation. The restriction to a minimum three month interval does not apply to schools which are part of an online financial accounting system operated by the LA.

2.1.3 Payment of Salaries; Payment of Bills

Administrative payments procedures will be determined by AI.2 for payment of salaries and AI.5 for payment of bills. There may be different arrangements for the payment of bills for schools maintaining their own bank accounts. Reference should also be made to the Late Payment of Commercial Debt (Interest) Act 1998 and charges to be made upon individual schools where appropriate (see paragraph 6(xiv) below).

2.1.4 Control of Assets

Each school must maintain an inventory of its moveable non-capital assets. Systems, procedures and controls which schools involved in the management and custody of assets are required to follow are included under AI.9. However, schools are free to determine their own arrangements for keeping a register of assets worth less than £1,000 although a register of some form must be kept that must satisfy insurers.

2.1.5 Accounting Policies (Including Year-End Procedures)

Financial Regulations and AI.1 deal with the preparation and management of financial plans. Schools are required to abide by procedures issued by the LA.

2.1.6 Writing Off of Debts

AI.7 deals with the collection of credit income (as opposed to cash income).

2.2 Basis of Accounting

To comply with the Code of Practice on Local Authority Accounting in Great Britain, accruals are applied to all revenue and capital income and expenditure. Details will be incorporated into AI.1.

2.3 Submission of Budget Plans

Each school is required to submit budget plans showing its intentions for expenditure in the current financial year and the assumptions underpinning the budget plan as detailed in FRs 16 - 24 and AI.1. The first formal budget plan of each financial year must be approved by the governing body. Schools should submit their formal budget plan showing intended expenditure in the current financial year by no later than 31 May.

The LA will supply all income and expenditure data held that is necessary for efficient planning by schools and a statement showing when this information will be provided throughout the year.

Schools should take full account of estimated deficits/surpluses at the previous 31 March in their budget plan.

2.4 Best Value

Given the very high proportion of local authority spending which flows through delegated budgets, the Government considers it desirable that schools should demonstrate that they are following best value principles as detailed in Annex 2.

2.5 Virement

Schools can vire between budget heads as detailed in AI.1.

2.6 Audit: General

Internal Audit is covered by Financial Regulations 14 and 15.

The responsibilities of external auditors are derived from statute; principally the Public Audit (Wales) Act 2004 and the Accounts and Audit Regulations.

Schools are required to provide access to their records for both internal and external auditors.

2.7 Separate External Audits

A governing body may, if it so wishes, obtain from delegated resources external audit certification of its accounts over and above the provisions in paragraph 2.6. An external audit commissioned by the school would have to take into account the status of the school as a spender of LA funds.

2.8 Audit of Unofficial Funds

Schools should provide the Authority with annual audit certificates in respect of Unofficial Funds held by them and of the accounts of any trading organisations controlled by the school. This is covered by AI.11 which outlines the systems, procedures and controls which schools involved in the administration of unofficial funds are required to follow. It is subject to the requirements of Schools Financial Regulation 13.

Although the funds are not provided by the council, it has a responsibility to safeguard them. The Head of Finance Services and Service Centre may ask to examine the accounts of any funds privately collected and spent by employees.

2.9 Register of Business Interests

Governing bodies are required to maintain a register of business interests which lists for each member of the governing body and the headteacher any business interests they or any member of their immediate family have.

The register must be kept up-to-date by notification of changes from governors and the headteacher, through an annual review process and formally recorded within the minutes of the governing body meeting.

The register must also be available for inspection by governors, staff, parents and the appropriate officers of the Authority.

2.10 Purchasing, Tendering and Contracting Requirements

The Council's Contract Procedure Rules (CPRs) outline the rules and regulations that schools must follow when procuring goods and/or services. A link to the CPRs and a copy of the Schools Procurement Advice Note can be found at Procurement rules and regulations (internal use only).

Contract Procedure Rules apply to schools except where the regulations and standing orders require a school to do anything incompatible with any of the provisions of the scheme or any statutory provision such as any UK public contract regulations which always take precedence over the Council's own Contract Procedure Rules.

2.11 Application of Contracts to Schools

In April 1999, there were various contracts in existence for schools, including those internal 'contracts' with the Direct Labour Organisations (DLOs) or Direct Service Organisations (DSOs), together with those arranged by the Council's Procurement Service for local and Welsh Purchasing Consortium sources of supply. Schools are not able to opt-out of these contracts until the termination dates. Thereafter, individual schools will be asked if they wish to be included in centrally let contracts. Schools are only bound into LA arranged contracts through Scheme provisions.

Although governing bodies are empowered under paragraph 3 of Schedule 10 to the School Standards and Framework Act 1998 to enter into contracts, in most cases they do so on behalf of the LA as maintainer of the school and owner of the funds in the budget share.

(This is the main reason for allowing LAs to require counter-signature of contracts exceeding a certain value). However, other contracts may be made solely on behalf of the governing body where the governing body has clear statutory obligations - for example, contracts made by aided or foundation schools for the employment of staff.

2.12 Central Funds and Earmarking

The LA will be able to make sums available in addition to and separate from schools' budget shares subject to conditions of use (e.g. RCSIG, specific grants from the Welsh Government).

The LA may require earmarked funds to be returned to the LA if not spent in the year.

The LA will not make any deduction in respect of interest costs to the LA from payments to schools of devolved specific or special grant.

2.13 Capital Spending from Budget Shares

Governing bodies are allowed to use their budget shares to meet the cost of capital expenditure (e.g. expenditure on buildings, equipment, vehicles etc.). If the expected capital expenditure on any of the following items will be in excess of £20,000 the governing body must notify the Capital Section (Finance):

Land and Buildings
Infrastructure (e.g. external walls, fencing)
Vehicles
Plant
Furniture
Equipment
Intangible asset (e.g. computer software)
Heritage asset (e.g. items with historical, artistic, scientific, technological, geophysical or environmental qualities that is held and maintained principally for its contribution to knowledge and culture).

Any proposed works to LA owned assets must receive prior approval of the LA via the Building/Facility Consent Form which can be found at School landlord building/facilities consent

Section 3

Instalments of Budget Share; Banking Arrangements

3.1 Code of Practice for Treasury Management

The Authority has adopted the CIPFA Code of Practice for Treasury Management which deals with the management of local authorities' cash flows, its borrowings and its investments, the management of associated risks, and the pursuit of the optimum performance or return consistent with those risks.

3.2 Frequency of Payment

Where schools maintain bank accounts into which their budget share (excluding employee costs, although the inclusion of employee costs may be considered at a later stage, in consultation with schools) is credited, transfers will be made in two instalments (although this may be reviewed if and when employee costs are delegated).

3.3 Proportion of Budget Share Payable at Each Instalment

With regard to paragraph 3.1. instalments will be made as follows:

60% of appropriate balance on the first banking day in April
40% of appropriate balance on the first banking day in September

Instalments will be allowed on a gross (for example. including pay costs, if and when applicable) and net basis.

The LA is required to add interest to late payments of budget share instalments where such late payment is the result of LA error.

3.4 Interest Clawback

For primary schools without bank accounts, the LA currently makes payments on behalf of schools. For primary schools with bank accounts, two instalments are made as in 3.3 above. As a consequence, the Authority suffers a loss of interest on such advances.

Therefore, a one-off adjustment is made to the individual school's budget for those participating primary schools based upon the difference between the cash flow profile indicated in 3.3 above and the actual cash flow profile in the year prior to participating.

3.5 Budget Shares for Closing Schools

The LA may make different arrangements regarding budget share instalments where a school closure has been approved.

3.6 Bank and Building Society Accounts

All secondary schools will continue to have their own bank accounts.

All primary schools have also requested bank accounts and their accounting arrangements, especially for VAT, the payment of creditors, the recording of bank transactions and division of duties within schools, are subject to Accounting Instructions.

Where schools have external bank accounts they are allowed to retain all interest payable on the account.

Any new bank accounts may only be made with effect from the beginning of a financial year with at least four months notice to and with the prior approval of the Head of Financial Services and Service Centre. When a school opens an external bank account the LA will transfer to the account an amount agreed by both school and LA as the estimated cash balance held by the LA in respect of the school's budget share.

3.6.1 Restrictions on Accounts

The LA remains the owner of the funds in a school bank account.

Schools will only be able to choose a bank approved by the Council. The accounts will be in the name of the Authority but 'personalised' with the name of the school; however, schools may be able to have accounts for budget share purposes in the name of the school rather than the LA.

LA employees and school employees can be signatories for bank accounts.

Use of a purchase card or debit card linked to the School bank account will be permitted on the grounds that this is considered a standard method of business payment without extended credit. As such it is akin to extended trade credit for items purchased and invoiced for settlement in due course rather than a form of borrowing.

3.7 Borrowing By Schools

Schools will not be able to make arrangements for overdrafts, loans or any other form of credit without the prior approval of the Head of Financial Services and subsequently Welsh Ministers.

Loans should not be secured against assets which are deemed to be essential to the continuance of the school (core assets) in essence:

land needed to meet the requirements of the Education (school Premises) Regulation 1999;
buildings or other assets essential to the functioning of a school and the requirements of health and safety and other relevant legislation.

Section 4

The Treatment of Surpluses and Deficit Balances Arising in Relation to Budget Shares

4.1 Planning

It shall be the duty of schools to manage within their approved budget and not plan for a deficit within any financial year (also see FR.21).

However, in the following exceptional circumstances a school may be permitted to plan a deficit:

If a reduction in pupil roll is of a temporary nature then to set a deficit budget would enable schools to maintain the staffing levels thus avoiding the distress and expense of redundancies.
Schools would have scope to plan over 2 or 3 years where there is a planned reduction in pupil numbers leading to a stable position.
Revenue projects identified and costed by schools in their School Development Plans could be implemented at an earlier date than previously planned.

Agreement to a deficit will be subject to the following conditions:

a) The Director of Education and Head of Financial Services must sanction the deficit prior to the school setting the budget.

b) A plan must be submitted to the Director of Education identifying how the deficit will be paid back.

c) The maximum planned deficit is 5% of the school's budget share. There is no minimum as any deficit will need to be agreed with the Authority. The maximum proportion of the collective school balances held by the LA which will be used to back the arrangements is 25%.

d) A deficit balance cannot be carried for more than 5 years and the report to Council indicates a preference for planning over no more than 2 or 3 years.

e) Deficit balances may not be written off.

4.2 Carry Forward Balances (Including Grant Maintained Schools)

Any surplus or deficit balance for any financial year shall be carried forward to the following year (also see FR.21).

4.3 Reporting on the Intended Use of Surplus Balances

Any school with a surplus balance in excess of 5% of its budget share and at least £10,000 will require the governing body to report to the LA Michelle.thomas@swansea.gov.uk each year on its intended use of the excess.

The LA may also direct the governing body as to how to spend a surplus in the school balance for a funding period, if the balance is in excess of 5% of its budget share and :-

(i) In the case of a primary school the surplus is £50,000 or more

(ii) In the case of a secondary school or a special school the surplus is £100,000 or more

The authority may, if the governing body do not comply with such a direction, require the governing body to pay all or part of that surplus to the authority to be applied as part of their Schools Budget for the funding period in question.

4.4 Deficit Out-turn or Balances

A deficit out-turn or balance cannot be written off by the LA. It must be carried forward as indicated in paragraph 4.2, and deducted from the school's budget share for the succeeding year.

If during the course of the financial year it becomes evident that a deficit may occur, the governors, Director of Education and Head of Financial Services are to be notified with proposals of how to minimise the deficit to be carried forward to the following year.

4.5 Interest on Balances

Surplus school balances held by the Authority will attract interest on a quarterly basis at the local government average 7 day rate.

Details of the conditions attached to invested balances will be held in separate guidance and schools will be informed accordingly.

Where schools fail to manage resources within their budget share then interest may be charged at the local government average 7 day rate on deficit balances.

4.6 Balances of Closing and Replacement Schools

On closure or amalgamation of schools, any surplus or deficit balance reverts to the LA and will not transfer to a successor or any other school.

If there is a deficit balance in the last year of a school's existence, the school should try to bring this back into credit before closure and would need to submit a plan (as in paragraph 4.1).

If 'amalgamating', schools should only spend reserves in their last financial year on agreed items for the new school. Closing schools should not spend their reserves after the closure announcement has been made without the prior agreement of the Head of Financial Services. (Note that protected salaries will only be funded for staff at successive schools if these salaries were in place at least one year prior to amalgamation or prior to the closure announcement, unless there has been prior agreement with the Authority).

Budget share regulations will allow for the allocation of additional funding or the abatement of extra funding to schools as circumstances deem.

As a rule of thumb, the net balance of closing schools will, within reason, be available to the new school on 'amalgamation'. Schools will be required to make a written proposal for these reserves if they wish them to be used for set up costs following the 'amalgamation'. Existing schools will also be required to make written proposals for the balance of a closing school to be used for set up costs at their school if they are receiving the pupils from a closing school.

4.7 Loan Schemes

The Authority may wish to consider, in consultation with schools, the possibility of a loan scheme which may be financed from amalgamated individual schools' resources.

Section 5

Income

5.1 Income from Lettings

Schools shall retain income from lettings except when joint use or Private Finance Initiative (PFI) agreements require otherwise. Income from lettings must not be credited to voluntary or private funds.

The use of school premises in respect of community and voluntary use may be subject to an LA policy statement allowing for lettings at a reduced rate.

Schools can also cross-subsidise lettings for community and voluntary use with income from other lettings, providing that there is no net cost to the budget share.

Where schools are considering entering into an agreement with a third party regarding the use of school premises they should first complete the third party lettings form which can be found at Third party lettings consent (internal use only).

to ensure that the agreement only constitutes a "room hire agreement" and not a tenancy or any form of tenure which affects the Authority's title to the premises or land.

5.2 Income from Fees and Charges

Schools shall retain income from fees and charges where the responsibility for providing the associated service has been delegated.

Schools will be required to have regard to any LA policy statements on fees and charges.

5.3 Income from Fund Raising Activities

This income shall be retained by schools.

5.4 Income from the Sale of Assets

This income shall be retained by schools only where the asset was acquired from delegated funds and is not land or buildings. The treatment of income from the sale of assets acquired from retained funds or the sale of land and buildings, which are owned by the LA, will be subject to an LA policy statement.

Surplus assets purchased from delegated funds should be notified to other schools and thereafter be disposed of by competitive tender, public auction or part-exchange unless the governors decide otherwise in particular circumstances (AI.9 refers).

5.5 Administration Procedures for the Collection of Income

Details of the arrangements for the collection of income are contained in AI.7 (which deals with the collection of credit income) and AI.8 (which deals with the collection and deposit of cash income).

Section 6

Charges on School Budget Shares

6.1 The following paragraphs detail the circumstances when the LA may charge a school's budget without the consent of the governing body, subject to appropriate consultation and notification procedures:

(i) Premature retirement costs incurred without the prior written agreement of the LA to bear such costs (the amount chargeable being the excess over any amount agreed by the LA), or where the school has not followed the agreed business case when submitting their application for ER//VR;

(ii) Expenditure incurred to secure resignations where the school has not followed LA advice;

(iii) Awards by courts and industrial tribunals against the LA or out of court settlements, arising from action or inaction by the governing body contrary to LA advice;

(iv) Health and safety work or capital expenditure for which the LA is liable resulting from a failure of the governing body to undertake required work where sufficient annual funds have been delegated for such work;

(v) Making good defects in building work funded by capital spending from budget shares without the knowledge or permission of the Authority where the LA owns the school premises or the school has voluntary controlled status;

(vi) Service charges due where the disputes procedure has determined in favour of the LA. This will include 'internal' invoices which have not been paid within 8 weeks or disputed in writing with the invoice raising department;

(vii) Recovery of penalties imposed by the Board of Inland Revenue, the Contributions Agency, HM Customs and Excise, Teachers' Pensions or regulatory authorities as a result of school negligence;

(viii) The correction of errors in calculating LA charges to school budget shares;

(ix) Additional transport costs arising from decisions by the governing body on the length of the school day and a failure to notify the LA Barrie.gilbert@swansea.gov.uk of non-pupil days;

(x) Legal costs incurred due to the failure of the governing body to accept the advice of the LA;

(xi) The cost of necessary health and safety training for staff employed by the LA where sufficient funding for such training has been delegated but not carried out;

(xiii) Compensation paid to a lender where a school enters into a contract for borrowing beyond its legal powers and the contract is of no effect, or without the prior approval of the Head of Financial Services;

(xiv) Cost of work done in respect of teacher pension remittance and records for schools using non-LA payroll contractors, the charge to be the minimum needed to meet the cost of the Authority's compliance with its statutory obligations;

(xv) Costs incurred by the LA in securing provision specified in a Statement of SEN where the governing body of a school fails to secure such provision despite the delegation of funds in respect of that Statement;

(xvi) Costs incurred by the LA due to the submission by the school of incorrect data;

(xvii) Recovery of amounts spent from specific grants on ineligible purposes;

(xviii) Costs incurred by the LA as a result of the governing body being in breach of the terms of a contract;

(xiv) Interest due on the late payment of creditor invoices where the delay is caused by the school (Late Payment of Commercial Debt (Interest) Act 1998);

(xiiv) Where a school proposes a change to the timing of the school day that incurs additional costs e.g. transport, where the local authority object to this change during consultation.

In the event of a dispute arising from these provisions the matter shall be dealt with by a person appointed by the Chief Executive of Swansea Council.

6.2 The Authority is required to charge salaries of school based staff to school budget shares at actual cost.

Section 7

Taxation

7.1 Value Added Tax

Instructions are included under AI.15 which deals with various VAT issues and will be dependant upon whether or not schools maintain their own bank accounts. Schools maintaining their own bank accounts will be reimbursed for any reclaimed VAT.

7.2 Construction Industry Taxation Scheme

This will be dealt with under AI.5 which deals with the procedures to be followed in making payments to creditors.

Section 8

The Provision of Services and Facilities by the Authority

8.1 Provision of Services from Centrally Retained Budgets

The Authority will determine on what basis services from centrally retained funds will be provided to schools, including premature retirement costs and redundancy payments.

The Authority will not discriminate in its provision of services on the basis of categories of schools except where:

Funding has been delegated to some schools only; or
Such discrimination is justified by differences in statutory duties.

Insurance arrangements may be precluded from any restriction in this section for practical purposes.

8.2 Provision of Services Bought Back from the LA Using Delegated Budgets

The term of any arrangement with a school to buy services or facilities is limited to a maximum of 5 years from the date of the agreement.

Although Welsh Government guidance suggests that in most, if not all, cases, arrangements will last a minimum of 2 years as it is likely to be uneconomic to provide a service for a shorter period of time, due to budget uncertainties it has been agreed to offer SLAs for a minimum of 1 year.

When a service is provided for which expenditure cannot be retained centrally by the LA, it is offered at prices which are intended to generate income which is no less than the cost of providing these services. The total cost of the service must be met by the total income, even if schools are charged differentially.

8.3 Packaging

Where the Authority is providing services on a buy-back basis, for which funding has been delegated, these will be offered in a way which does not unreasonably restrict schools' freedom of choice amongst the services available and, where practicable, this will include provision on a service by service basis as well as in packages of services, following consultation with schools.

The Authority may wish to consider the possibility of offering a wider package of services to schools at a discount (not less than cost) but would also offer the same services on an individual basis if possible or as described in the previous paragraph.

8.4 Service Level Agreements

Where services or facilities are provided under a Service Level Agreement, whether without charge or on a buy-back basis, the terms of any such agreement will be reviewed at least every 3 years if the agreement lasts longer than that period.

Where services are offered by the Authority on a buy-back basis, they will be available on an ad hoc basis, if possible, as well as on the basis of standard Service Level Agreements. Where services are provided on an ad hoc basis, the Authority may charge at a different rate from the same services provided under a standard Service Level Agreement.

Section 9

Private Finance Initiatives (PFI) Public Private Partnerships (PPP)

9.1 PFIs are intended to secure the best possible utilisation of capital resources. The main advantage is that the additional funding which is secured can often enable a project to be undertaken which the Authority itself could not afford at that time. The main disadvantage is that the Authority is required to enter into a long term contractual commitment with the funding providers in connection with the assets and services provided. Careful financial and service evaluation of the proposed project is required.

9.2 Any proposals for Private Finance Initiatives/Public Private Partnerships will need initial consideration by the Head of Financial Services and the approval of the LA (contact Kelly.small@swansea.gov.uk) prior to proceeding.

Section 10

Insurance

Funds for insurance will be LA retained.

Section 11

Miscellaneous

11.1 Liability of Governors

Within the terms of S50(7) of the Act, governors do not incur personal liability in the exercise of their power to spend the school's delegated budget share provided they act in good faith.

11.2 Governors' Expenses

Schedule 11 of the Act determines that only allowances specified in regulations may be paid to governors from a school's budget share and no other allowances should be paid (also see AI.14 which deals with the procedures for paying governors' expenses).

The LA may delegate funding to meet governors' expenses to a school yet to receive a delegated budget.

Duplication of expenses paid by the Secretary of State to additional governors appointed by him/her to schools requiring special measures will not be permitted.

11.3 Responsibility for Legal Costs

See paragraph 6(x). Separate advice will be issued on the procedure schools should follow in obtaining legal advice where there is a conflict between the Authority and the governing body and the school has not bought into the LA's Legal SLA. Governing bodies may be permitted to use their delegated budgets to seek independent legal advice if there is a conflict of interest between the school and the LA.

11.4 Health and Safety

In expending the school's budget share, governing bodies are required to have due regard to duties placed on the LA in relation to health and safety, and the Authority's policy on health and safety matters in the management of the school's budget share.

The Health and Safety Executive is working on detailed guidance for schools. In the meantime, LAs may (under s.30 (3) of the Act) issue directions to the governing body and headteacher of a community, community special or voluntary controlled school on health and safety matters. These directions are enforceable, so far as governing bodies are concerned, under Section 497 of the Education Act 1996 if not complied with.

11.5 Right of Attendance for Head of Financial Services

Governing bodies are required to permit the Head of Financial Services of the Authority or any officer of the Authority nominated by the Head of Financial Services to attend their meetings where items relating to the officer's responsibilities are being discussed. The LA will give prior notice of such attendance unless it is impracticable to do so.

11.6 Delegation to New Schools

The Authority is empowered to delegate selectively and optionally to the governing bodies of schools yet to receive delegated budgets.

11.7 Spending of Budget Share to Secure SEN

Schools are required to use their best endeavours in spending the budget share to secure SEN. This is a statutory requirement and it is possible to suspend delegation where a situation is serious enough to warrant it.

11.8 Whistle-blowing

Complaints from persons working at a school or from school governors regarding financial management or financial propriety at the school should be dealt with through Part 5 (Codes and Protocols) of the Council Constitution.

11.9 Child Protection

There is a need to release staff to attend child protection case conferences.

11.10 School Meals

The Authority has a 'zero debt' policy with regards to school meals.

11.11 Community Facilities

Governing bodies have the power to provide facilities or services whose provision furthers any charitable purpose for the benefit of pupils/families at the school or people who live or work in the locality. The power includes that the governing body can incur expenditure, enter into arrangements/agreements, and provide staff/goods/services/ accommodation to any person. Governing bodies may charge for any services/facilities provided. This is all subject to the school's statutory instruments of government and the school needs to consult the LA (contact Kelly.small@swansea.gov.uk), staff and parents (and pupils if relevant).

11.12 Teachers' Pensions

Governing bodies must provide returns and information for teachers' pension purposes.

Section 12

Responsibility for Repairs and Maintenance

12.1 The Authority will delegate funding for repairs and maintenance to Schools. Schools are responsible for any land under the management of the school within their boundary lines. The definition of capital is that used by the Authority for financial accounting purposes in line with the CIPFA Code of Practice on local authority accounting. In particular, where in line with the Code of Practice, the Authority use de minimis limits for defining what expenditure is treated as capital and what is revenue, the same limits will be used in defining what is delegated.

12.2 The expenditure responsibility split is shown in the LA's handbook 'Revenue Maintenance Division of Responsibilities', and this indicates the categories of work which governing bodies must expect to finance from their budget shares. This handbook includes reference to the responsibility on VA school governors. VA school governors may continue to be eligible for grant from the Welsh Government in respect of their statutory duties for buildings and premises. In addition, they will have responsibility for other repair and maintenance items on the same basis as other categories of schools.

12.3 The Authority may require schools to prepare and submit annual maintenance plans. The Authority has also produced an Education Asset Management Plan.

12.4 The Authority's Standing Orders relating to contracts must be observed, especially relating to the invitation to tender, submission of tenders and awarding of contracts. See paragraph 2.10 for further information.

Annex 1
Schools Maintained by the LA to which the Scheme for the Financing of Schools Applies (as at 1st April 2023)

Primary Schools

Birchgrove
Bishopston
Blaenymaes
Brynhyfryd
Brynmill
Burlais
Cadle
Casllwchwr
Cilâ
Clase
Clwyd
Clydach
Craigfelen
Crwys
Cwmglas
Cwmrhydyceirw
Danygraig
Dunvant
Gendros
Glais
Glyncollen
Gors
Gorseinon
Gowerton
Grange
Gwyrosydd
Hafod
Hendrefoilan
Knelston
Llangyfelach
Llanrhidian
Mayals
Morriston
Newton
Oystermouth
Parkland
Pen y Fro
Penclawdd
Pengelli
Penllergaer
Pennard
Pentrechwyth
Pentre'r Graig
Penyrheol
Plasmarl
Pontarddulais
Pontlliw
Pontybrenin
Portmead
Sea View Sketty
St. Helen's
St. Thomas'
Talycopa
Terrace Road
Townhill
Trallwn
Tre Uchaf
Waun Wen
Waunarlwydd
Whitestone
Ynystawe

Welsh Primary

Y.G.G. Bryniago
Y.G.G. Bryn-y-Môr
Y.G. y Cwm
Y.G.G. Llywnderw
Y.G.G. Gellionnen
Y.G.G. Lôn-las
Y.G.G. Pontybrenin
Y.G.G. Tan-Y-Lan
Y.G.G. Tirdeunaw
Y.G.G. Y Login Fach

VA Primary

Christchurch Ch Wales
St. David's RC
St. Illtyd's RC
St. Joseph's Cathedral
St. Joseph's RC

Comprehensive

Birchgrove
Bishop Gore
Bishopston
Cefn Hengoed
Dylan Thomas
Gowerton
Morriston
Olchfa
Pentrehafod
Penyrheol
Pontarddulais

Welsh Comprehensive

Ysgol Gyfun Gwyr
Ysgol Bryn Tawe

VA Comprehensive

Bishop Vaughan RC

Special Schools

Penybryn (Includes Maytree Autistic Unit)
Ysgol Crug Glas

Annex 2

Principles of Best Value

The principles of best value are ones that local authorities owe to local people, both as taxpayers and the customers of local authority services. Performance plans should support the process of local accountability to the electorate.
Achieving best value is not just about economy and efficiency, but also about effectiveness and the quality of local services - the setting of targets and performance against these should therefore underpin the regime.
The duty should apply to a wider range of services than those previously covered by CCT. Details will be worked out jointly with Departments, Wales Audit Office and the WLGA.
There is no general requirement for councils to put their services out to tender, but there is no reason why services should be delivered directly if other more efficient means are available. What matters is what works.
Competition will continue to be an important management tool, a test of best value and an important feature in performance plans. But it will not be the only management tool and is not in itself enough to demonstrate that best value is being achieved.
Central government will continue to set the basic framework for service provision, which will, in some areas, as now, include national standards.
Detailed local targets should have regard to any national targets, and to performance indicators and targets set by the Audit Commission in order to support comparative competition between authorities and groups of authorities.
Both national and local targets should be built on the performance information that is in any case needed by good managers.

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Last modified on 28 March 2024

Scheme for the financing of schools

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