Tuesday, 7 March 2017

Forest Hill School in deficit - how do we protect education for its students?

A community standing up for its school

Last week's packed public meeting to discuss the deficit crisis facing Forest Hill School (FHS) in Lewisham showed the determination of the local community to defend their school. 

The fact that over 120 people attended at short notice was a credit to both FHS staff, who had worked so hard to publicise the meeting, and to the parents and students who attended in such large numbers to stand up for education at their school.

At the end of the meeting, a group of parents formed the Forest Hill Action Group to organise a campaign. As an immediate step, they have been writing to the school asking for parents to be properly consulted over the cuts proposals.

NUT members, who had already won a legal ballot for industrial action, then met this week to confirm their request for the Union to issue notice for three days of strike action before the end of term, action to be taken if ongoing negotiations fail to produce an acceptable solution.

One of the parents present at the meeting, Phil Beadle, immediately wrote a post on his blog listing the threats facing Forest Hill boys as a result of the proposed cuts, ending with this rallying cry: "I call on parents in Lewisham and wider to do the same as the parents of boys at Forest Hill School are doing: to applaud their children’s teachers’ strike action and to stand alongside them on the picket".

The determination to defend education at FHS is clear - but what's the nature of the crisis - and how can it be solved?

Plans to cut £1.3M in staffing costs will seriously damage education at Forest Hill School

Why is a well-loved school without a falling roll facing a budgetary crisis? It's quite right that parents are asking for answers. Trade unions are entitled to budgetary information as part of legal consultation over redundancies - but some of that information is given to us confidentially. That's why the figures I am using in this blog are from public sources - with links to documents that you can read for yourselves. 

Luckily, some of the key information is in a document presented to Lewisham's Mayor and Cabinet last November
This explains that:
  • The school overspent its budget at the end of 2015/16 financial year by £129k.
  • During the 2015/16 financial year the school operated an in-year deficit of £463k and avoided a larger year end deficit by spending its reserves.
  • The budget recovery plan shows the school in deficit at the end of 2016/17 financial year by £879k.
Although the document does explain that "following national changes, the school has had to face a reduction in the Post 16 funding of £150k", it does not explain further as to why the school has been consistently spending more than its income. The blunt facts are that any reserves have now been spent and FHS is now facing a huge deficit.

It's worth noting that this is not the first time that Forest Hill has had these kind of difficulties. A similar report for a December 2010 Mayor and Cabinet meeting stated that "During the 2009/10 financial year it became apparent that the school budget would significantly overspend. The school had overestimated the income they were likely to receive". So why wasn't the Local Authority paying more attention to FHS finances? After all, the November report states that "The school was audited in February 2016 and had a satisfactory assurance" !

The plans to address this deficit are devastating - even if only hinted at in the November 2016 Report:
  • The recovery plan is built around reducing the teaching complement by reviewing the delivery of curriculum, considering contact time, reviewing management structures.
  • In total the staffing costs within the school will reduce by £1.3m
£1.3M equates, with on-costs, to around 15 teaching posts plus a number of support staff who have already lost their jobs. As the report itself says, "Forest Hill School is not affected by roll numbers since it is virtually full in all year groups". Fewer staff for the same amount of pupils can only mean one thing - worse education. The 'review' of the curriculum and management structures will surely mean cuts to subjects and expecting teachers to carry out extra work previously allocated to now redundant colleagues. 

"Considering contact time" will mean cutting the numbers of non-contact periods that teachers use to mark, plan and prepare lessons to an absolute minimum. Given that teacher workload is recognised as being the main driver of teacher resignations and recruitment problems, this step alone seriously threatens staff morale and stability at Forest Hill School.

The document claims that the "benchmarking data indicates that the teaching costs at Forest Hill are £125 per pupil above the average for similar size schools within Lewisham ... so the reductions in staffing being undertaken are reasonable". However, is national benchmarking (also referred to in the report) a fair comparison given that Inner London salaries are higher than the national average? Even the Lewisham comparisons don't appear to add up since multiplying £125 by the number of pupils at FHS comes to nearer £1.3K than £1.3M!

Who is responsible? 

Parents understandably want to know why the school is in this financial mess. A maintained school is a community asset, not a secret commercial venture, and so small wonder calls from the floor of the public meeting for the school to 'open the books' were applauded. 

At a Sydenham Labour Party public meeting a few weeks before, Councillor Paul Maslin had bluntly made clear that, in his view, school governors and management were to blame. Whether connected or not, there have certainly been recent governance and leadership changes and the new Headteacher, Mike Sullivan, has been left with the unenviable task of dealing with the deficit. 

However, Lewisham Local Authority have a clear responsibility for financial oversight of maintained schools as well as, for example, being responsible for the original negotiations of Forest Hill's expensive PFI contract. They must also shoulder some of the blame and must certainly now take responsibility for finding an educationally acceptable way forward.

Of course, that apparent lack of proper auditing is fundamentally another consequence of government cuts to Local Authorities. As the National Audit Office pointed out back in 2011, "some local authorities are reducing their capacity to monitor and support schools’ financial management, at a time when some schools may need it most". Things will have only got worse since then.

My own view is that putting too much effort into apportioning blame for the causes of the crisis could be wasting energies best used on finding a way out of the mess - and a way out that doesn't make the FHS boys, who definitely weren't to blame, pay the educational price for others' errors. However, answers to the 'why' might certainly help with the 'how'. 

It's also in the school's own interests to be open and transparent. Otherwise, in the absence of a proper explanation, some parents will inevitably suspect that something more untoward has gone on - even though I was at pains at the public meeting to explain that there was no evidence that I was aware of that  anything fraudulent had occurred.

Regrettably, rather than being open, the school has instead been sending out letters that try to deny a crisis even exists! Trying to pretend that 'less is more' will satisfy nobody. Describing the loss of perhaps fifteen teaching posts and a demoralising restructuring of responsibility payments as a way to achieve a 'reconfigured curriculum' and a 'refreshed leadership structure' will only add to staff anger. 'Maintaining the quality of our offer with a declining budget' is something which just cannot be done.

Cuts to a school like Forest Hill will also inevitably have an impact on Equalities. Lewisham's own report from last November points out that schools like Forest Hill "like most in Lewisham, have high proportions of BME pupils and have promoting equality and social mobility as part of their mission to improve children’s lives". The report confirms that the Local Authority has a Public Sector Equality Duty - but what will the Authority be doing to carry out those responsibilities in this case? Where is the Equality Impact Assessment?

Is this about Fair Funding and Government Cuts?

The situation at Forest Hill has arisen before the emerging national crisis over school cuts and the additional new threat that the proposed National Funding Formula could make things particularly difficult for London schools. This hasn't caused the problems at FHS - although it would, of course, make things even worse if major cuts are inflicted on a school that's already in serious financial difficulties.

However, many schools, including FHS, have already been suffering from a declining income in real-terms as budgets have tightened. The National Audit Office have recently pointed out that 60% of secondary schools nationally were already spending more than their income in 2014-15, 15% of them being already in actual deficit. So Forest Hill is far from alone in facing a crisis. 

The link between the Forest Hill campaign and the wider 'Fair Funding for All' campaign is that FHS illustrates all too starkly the threat facing nearly every school if the Government is able to get away with its wider school budget cuts. A successful campaign at Forest Hill can also embolden others to stand firm on the cuts that may face them too.

What about the PFI?

When the school ran up a deficit in 2010, some of the blame was certainly attributed to the high costs of the repayments for the rebuilding of the school under the Private Finance Initiative. While the contractual detail remains unclear, publicly available documents show that the Grouped Schools PFI project that the Forest Hill rebuild belonged to had a capital value of £54M. However, the total costs of the unitary payments over 30 years adds up to over £200M! 

A recent Lewisham Schools Forum paper confirms that Forest Hill School is spending over 10% of its Individual Schools’ Budget on PFI payments. Whether or not this is a primary cause of the budgetary crisis, it surely offers at least a partial solution? Rather than demand that FHS cuts its staff and pupils' education, shouldn't Lewisham Council be demanding that the profiteering PFI firms take a cut in their payments instead? 

So what is the way out of this mess? 

Whatever the cause of this crisis, the real issue is how to solve it. NUT members are clear that cutting staff, increasing workload and worsening the curriculum offer no real solution. Instead, those threats risk destabilising the school, driving away staff and parents alike, and making a bad situation even worse.

The NUT will be demanding that education is protected by maintaining non-contact time to allow staff to properly plan and prepare lessons; that there should be no compulsory redundancies; that any changes to posts and management structures must allow a full curriculum for students and manageable responsibilities for staff in charge of those curriculum areas.

While the NUT hopes that a negotiation at school level can help address some of these issues, a resolution may well also require finding the additional funding needed to protect staff numbers. Here's how that could be done:

a) Extending the licensed deficit
Section 48 of the Schools Standards and Framework Act 1998 specifically allows for Local Authorities to make provision for schools to set a deficit budget. There is nothing 'illegal' about such an arrangement. Lewisham Council have already agreed a deficit budget for Forest Hill School, providing a loan of £879k to cover the school’s budget shortfall in the first year of the recovery plan. The loan is to be paid back over a five year period. This loan could be increased to help reduce the impact of the cuts proposals.

b) Writing off some of the debt

The problem for FHS is that, before such a loan is approved, the Local Authority demands that the school agrees a recovery plan showing how it will be able to pay back the loan over the agreed timescale.

But this puts FHS in an impossible position. The Governing Body faces the same kind of dilemma as the Government of Greece! Not only do they have to reduce costs but they've also got to find additional savings so they can pay back the loan as well. As the school already has almost full pupil rolls, they can't recruit more pupils to boost income. The loan may help temporarily but its terms are still a recipe for severe cuts for years to come. The answer has to be to write off some of the debt.

The provisions for doing this already exist within legislation and Lewisham's own Scheme of Delegation (the same scheme that makes clear the auditing powers that perhaps the Authority should have been operating more stringently).

c) Cutting other costs

The NUT will be asking for full budgetary details to see whether there are other ways to reduce costs that don't damage education in the ways that the school is proposing at present. With PFI payments making up over 10% of the school budget, then that has to be one cost that needs to be looked at. Perhaps the Council or the contractors will have to meet the shortfall instead.

Staff and students shouldn't be paying the price for financial cuts and mismanagement at Forest Hill School. The NUT hopes that, alongside parents, we can build a big enough campaign to make sure that doesn't happen. We hope FHS Governors will put their responsibility for Forest Hill boys and the local community first and join us in opposing these cuts.

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