Schools in Halton are sat on more than £6.5m in surplus cash, with a decision set to be made over whether to claw some of it back.

A report due to be presented to Halton's schools forum shows that out of 46 maintained schools in the borough, 40 of them (87 per cent) have a surplus of money, while the remaining six have a deficit.

The overall combined surplus is £6,519,071, with two of the schools alone each having £500,000 in the bank. At the other end of the scale, two schools are running with deficits of more than £40,000 each.

According to the report there are 19 maintained schools which have a surplus above what Ofsted recommends. It recommends that school surplus balances should not exceed 5 per cent of a secondary school's income, or 8 per cent of a primary school, special school, or pupil referral unit's income. A total of 21 schools in Halton have increased their surplus balances since 2022-23.

A maintained school receives its funding from the council, which itself is allocated the money by the government in a dedicated schools grant (DSG), cash which is ring-fenced and can only be used for schools and not diverted to other council services. Academy schools are not included, as they receive their money directly from the government and are independent of the council.

The report will be presented to the schools forum, which consists of council finance and education representatives, alongside nominated school leaders representing the different sectors and age ranges of education providers in Halton.

The forum will be offered a series of options over what to do about the surplus, these include (a) doing nothing, (b) to have a formal ‘clawback’ policy in place where the council targets schools with a 12.5 per cent balance and applies a £100,000 minimum balance threshold. Or (c) the council can request schools justify the excess balances with information on planned use of the money.

If the clawback plan is approved, surplus money would be taken back and placed back into the DSG.  This process would be rolled out for the 25/26 financial year. A clawback rate of 50 per cent would be applied to any balance above the threshold in the first year a school exceeds it, and 100 per cent if the threshold has been breached for two or more consecutive years.

In terms of the current figures, this would result in £1,048,639 being recouped. One Runcorn primary school alone with a surplus of £319,882 could lose £159,941 of it back to the DSG. That money would then be redistributed to other school services in the borough.

The report said: “It is pleasing to note that, despite the many costs pressures being faced by schools, the overall school balances have been sustained at over £6.5m.

"The increased Devolved Formula Capital balance, from the additional funding referred to above, will greatly assist schools in developing and installing energy efficiency measures which should help them sustain longer-term cost efficiencies and financial benefits to their revenue budget positions."

The report and list can be found here.