The DfE launched a Financial Transparency Consultation in July last year to seek the views of various stakeholders on possible changes to bring reporting requirements for LA maintained schools and academy trusts more into line. Both LA maintained schools and academy trusts are funded from public funds so it would seem reasonable that they offer similar levels of assurance in relation to their financial health.
- In July 2020, the DfE completed the consultation and you can read the full outcome here.
So, what are the expected main changes following the consultation?
Three year forecasts will be required to be submitted to your Local Authority on an annual basis, between 1st May and 30th June each year from the financial year 2021-22. A direct revision to the Scheme for Financing Schools will be made to implement this change.
There will be a further revision to the Schemes for Financing Schools requiring schools to submit a recovery plan to their local authority when their deficit rises above 5%. The trigger for providing a recovery plan will be the financial position as at 31 March 2021.
The Schools Financial Value Standard “SFVS” 2021-22 will include an appendix where schools will need to detail any related party transactions that have taken place during the year. The SFVS 21-22 will be due for submission in March 2022, however you will need to monitor any transactions from 1st April 2021.
Local Authority maintained schools will be required to publish the number of individuals earning over £100k in £10k bandings on their website from 1st January 2021.
Income and Expenditure Reporting
From 1st January 2021, Local Authority maintained schools will be required to provide a link to the DfE Benchmarking website where their Consistent Financial Reporting data is published. This is to increase transparency on the details of schools’ income and expenditure during the year.
The outcomes and changes following the consultation have tried to increase transparency within LA maintained schools whilst keeping regulatory burdens as low as possible. For many of the changes, schools will already complete or provide the information for their governing bodies and it may be just one additional step to publish the data on their website or submit it to the Local Authority. The consultation will also increase standardisation between Local Authorities on how they review and monitor financial health and financial transparency within schools.