East Riding headteachers struggling to make ends meet in their finances
The Council is facing the highest-ever black hole in its education budget
East Riding headteachers are struggling make ends meet in their schools’ finances as the council faces the highest-ever black hole in its education budget, councillors have heard.
East Riding Council’s Cabinet heard the projected overspend in its budget for schools alone was £7.8m of the £12.6m for education this financial year, bringing the total deficit to £13.2m.
Cllr Victoria Aitken, portfolio holder for education, said the eye-watering gap came as the East Riding remains the fourth-lowest funded authority in England.
Council leader Cllr Jonathan Owen said he had never known as much financial uncertainty in all his time in local government.
It comes as councillors heard there would be a £3.3m gap in the East Riding’s general budget by the end of this financial year, up from the previously projected £2.5m.
The Cabinet approved a further ÂŁ69.7m for capital projects including highways, schools, flood defences and housing as inflation continues to push up their cost.
A report to the Cabinet stated the ÂŁ3.3m gap came in stark contrast to the ÂŁ15m underspend forecast last year.
It also warned the ÂŁ7m in reserves previously used to plug budget gaps was one-off money but those costs would become permanent.
The report stated: “The overspend is projected due to the impact of exceptionally high inflation which has emerged since the council set its 2022-23 budget.
“There is considerable risk associated with projections at this early stage in the year, particularly due to the volatile inflation environment and costs could rise yet further above projections.
“The council has sufficient reserves to manage this risk but an overspend position will likely require a change to spending plans for earmarked reserves.”
Finance lead Julian Neilson told the Cabinet it the ÂŁ3.3m overspend came despite ÂŁ5m in cuts made this financial and ÂŁ7m in reserves used to cover rising costs.
Mr Neilson said rising energy bills, higher than expected public sector pay settlements, mounting costs in health and work to clear social care backlogs had swelled the budget gap.
He added deficits in the education budget were a symptom of the wider national issue of education funding.
The finance officer said: “Inflation is a significant challenge for schools, they really need more funding to deal with these pressures.
“The Department for Education has provided additional funding to cover higher pay offers.
“Our £12.6m overspending the highest ever projected.”
Cllr Aitken said she hoped to arrange a meeting with Prime Minister Rishi Sunak to discuss education funding after previously speaking to him in the summer.
She added she continued to be proactive on the issue through the F40 group of councils representing the county’s lowest-funded authorities for education.
The portfolio holder said: “The £7.8m figure for schools is quite eye-watering.
“I’ve repeatedly had headteachers come to me because they’re struggling to balance their budgets while giving their young people a good service.”
Cllr Owen said the general financial situation was a reflection of difficulties across local governments.
He the coming months were going to bring severe challenges to the East Riding’s and other authorities’ finances.
The leader said: “The situation will be pretty treacherous until we get more clarity from the Government.
“Things will get tougher before they get better.”