Schools in financial deficit could be a problem for Powys County Council for years time to come - but the strategy to address the issue is working - according to a finance chief.

At a meeting of the council’s Learning and Skills scrutiny committee on Friday, November 17, councillors looked at the progress being made on school balances in recent months.

Schools submitted their budgets to the education service earlier this year. The report noted that in May, 26 schools in Powys had finanicial problems and had submitted budgets which would see a cumulative deficit of £3.423 million by the end of March 2024.

The council was projecting this to become a £9.298 million deficit by the end of March 2027.

After working with the schools, the report explains that the figure now stands at a £3.566 million deficit by the end of March 2024 and the projection is now a £7.933 million deficit by the end of March 2027.

There are eight secondary schools amongst the 26.

For this group, the position had moved from a cumulative deficit of £3.199 million to £3.643 million.

Conservative group leader Cllr Aled Davies said: “The position of secondary schools after intervention by the finance team has worsened.”

Schools finance manager Nancy Owen explained said that after working with the schools, the budget deficits would drop to an “improved situation” of a £6.530 million deficit by the end of March 2027.

Cllr Davies said: “I know you are working extremely hard to square this almost impossible circle.

“Scrutiny groups warned at the last budget of underfunding schools by £3.3 million.”

He believed that this year’s “underfunding” would need to be addressed in next year’s council budget.

Cabinet member for finance, Labour’s Cllr David Thomas said: “I’d like to address this £3.3 million underfunding that is purported to have happened.

“I made it perfectly clear at the time that all the money we received from the Welsh Government for education was passed over to education.

“If Cllr Aled (Davies) is suggesting that we should have put in an extra £3.3 million – that would need to come from other services or an increase in council tax to match that.

“What he never adds is what services he’d like to see that money coming out of, or how much council tax he’d like to increase by.

“There’s never an alternative put forward.”

The strategy to tackle the deficits is to get schools’ annual budgets in balance first and then start eating into the historic deficits.

Cllr Thomas said: “The strategy is working but it’s going to take time - unfortunately these pressures could be with us for quite some time yet.

“The only way we can get through this very challenging period is by schools working with the officers of the authority.”

Head of education, Georgie Bevan, told the committee that “deep dives” had been done with several schools and “savings” had been found.

She added that further changes to the funding formula for secondary schools were in the pipeline.

These include passing on funding for pupils with Additional Learning Needs (ALN) directly to schools rather than keeping it in a central pot.

Schools with a higher number of pupils from deprived backgrounds could also see increases in funding.

Ms Bevan said: “We are constantly looking at the detail.”

The committee went into confidential session to discuss specific schools with budget problems.