A report will be presented, Document KP, which responds to the request made by Members at the meeting held on 13 March 2019 for a report, which examines the affordability of PFI costs in schools across the medium and longer terms.

Recommended –

The Schools Forum is asked to consider and to note the information provided.

                                                                       (Ian Smart – 01274 431735)

A report was presented, Document KP, which responded to the request made by Members at the meeting held on 13 March 2019 for a report, which examines the affordability of PFI costs in schools across the medium and longer terms.

The report was presented by the Head of Team (Pupil Planning / Trans) and the Business Advisor (Schools). In the discussion that followed Members made the following comments and asked the following questions:

·         The Academies Member, who requested the report, welcomed its clarity. He stated that the 2 bullet points on page 29 are crucial (the impact of annual inflationary RPIX growth on the cost of the school’s unitary charge and the affordability pressure resulting from the reduction in pupil numbers when the unitary charge remains fixed). He explained that these are the circumstances being faced by his MAT now and are also, more widely, interconnected with decisions being taken or considered by schools in respect of their 6^th forms. Unless there a mechanism for dealing with these 2 factors PFI will be unsustainable for individual schools and MATs going forward and the provision for children will continue to be detrimentally affected - the cost of the annual increase through the RPIX mechanism, for example, is the equivalent to the cost of a teacher. Schools and MATs already have to make significant curriculum planning decisions in order to accommodate PFI costs.

·         These comments were supported and reinforced by the Member representing maintained secondary schools and the Member representing maintained special schools, both having declared their interests.

·         Another Academies Member asked a ‘theoretical’ question, in the case of a MAT that might not be able to afford PFI payments, at what point this would be seen as a ‘default’ (where the ESFA would step in to cover PFI costs) rather than just a budget overspending for the MAT to recover.

·         The Chair asked where we go next with this issue. Both the Head of Team and the Business Advisor responded that there is a clear role for the DfE’s National Funding Formula in the resolution especially of the inflationary increase issue. The financial responsibilities for individual schools and MATs however, are contractually agreed and fixed in relation to the total cost of PFI, PFI credits from Government and the calculated affordability gap. So there a clear role for Government in this issue. The Academies Member, who requested the report, agreed that this is not an issue that the Schools Forum itself can resolve, but that the Forum needs to have a voice and, with the Authority, needs to continue to place pressure on the DfE, the ESFA and the RSC to find a resolution. The Forum also needs to be kept informed of discussions and developments on this issue.

Resolved –

(1)       That the Schools Forum, at this stage, notes the issues set out in         the report regarding the affordability of PFI at school level.

(2)       That the Forum continues to receive information on the    development of PFI funding within the National Funding Formula    as this progresses.

Action:          Business Advisor (Schools)