Mr Stephen Crowne

Director

Resources Infrastructure & Governance Group

Department for Education & Skills

Sanctuary Buildings

Great Smith Street

London SW1P 3BT

 

David Paterson RP/TW/Nov14jb03

01264 781216

5 December 2003

 

Dear Stephen

 

Targeted Transitional Grant 2004/05

I am writing to you on behalf of Hampshire's Schools Forum. The Forum met on 25 November 2003 and considered the issues involved in the use of the targeted transitional grant in 2004/05.

The Forum welcomed the figure of £6.9 million of grant to support schools maintained by Hampshire County Council. It noted that the sum had been calculated on the basis that funding for schools in Hampshire had grown less than in other parts of the country. Since the grant had arisen from a low level of general increase in funding the Forum expressed its very deep disappointment that the money was not being provided as an allocation that could be distributed to all schools. The financial pressures being felt by schools are shared by all, it is just that different schools manage them differently.

The Forum asked me to stress particularly to you their very deep concern that the approach being adopted in respect of the transitional grant and the emphasis in the guidance on schools in or close to deficit could have very noticeable adverse effects on overall finance management in schools. Some schools in challenging circumstances faced an impossible situation in the short term without incurring deficits. For these and other reasons some schools have set budgets which they knew would lead into deficit and these were supporting levels of expenditure which were unsustainable in the longer term. This may often have been despite advice and support from officers of the County Council. In some cases it is also known that apparently balanced budgets have been notified to the authority but that actual patterns of expenditure and income which the school expected and achieved were different. Other schools with more effective and conscientious management have very carefully found ways of living within their means even though this has resulted in the resources and staffing at the school being less than the governors would have wanted. Representative groups of headteachers who had initially considered the approach being suggested for the use of targeted transitional grant had been extremely angry at the likely effect of being seen to reward poor financial management.

In particular the Forum wished me to emphasise the need for the DfES to support the imposition of effective conditions on schools for the use of grant and the delivery of recovery plans to the timetables agreed. The Forum felt that the department should declare any write off of deficits from the transitional grant to be an unrepeatable one-off exercise. Otherwise, it was the considered view of many Forum members that there would be some school governing bodies and heads who would be tempted to avoid the disciplines of financial management, particularly during a period of falling rolls, in the hope that a few years down the line there would be another write-off of deficits.

The Secretary of State's statement to parliament had indicated that those authorities which had received targeted transitional grant for their schools in 2004/05 would receive such grant in 2005/06. However, the department's more recent guidance indicates that this will not necessarily be the case. In order for the Schools Forum to agree appropriately criteria and to be clear as to the longer-term consequences up to and beyond 2006/07, it believes it would be extremely useful if it was possible to be clearer as to the situation for 2005/06.

The Forum welcomed the support in the guidance for additional financial management training but was concerned that in a number of cases schools with difficulties had failed to take advantage of existing training . They feared some of those in most need of the training would not benefit unless this was a requirement within recovery plans.

Yours sincerely

David Paterson

 

Chairman, Hampshire Schools Forum