A troubled St Helens school’s budget is projected to run a £1m deficit within the next two years - raising fears jobs could be put at risk.
Rainhill High School’s financial position is revealed in its annual report, produced by auditors Mitchell Charlesworth and seen by the St Helens Reporter.
The report makes unhappy reading for senior leaders at the Warrington Road school, which has been mired in controversy over the past 12 months, and suggests “staff area savings” as a way of balancing the books.
The report also warns the school’s current healthy financial position - it is expected to post a surplus of £403,888 at the end of this academic year - should be treated with caution as “the change of financial year (as a consequence of academisation) has skewed the year-end figures making them look artificially healthy”.
Finance chiefs predict the school will post a 347k deficit in the 2018/19 academic year and a £1,027,714 deficit the following academic year.
Privately, many teachers fear the projected losses could result in job losses.
The report states: “(The school) is currently projecting a deficit of £347,913 by August 2019 and a deficit of £1,067,714 by August 2020 and therefore a key part of future plans is to address this position to ensure a balanced budget can be set.
“The director of finance and operations is leading a review of income and expenditure, which will be presented to the senior leadership team.
“This review is expected to highlight potential savings (including back office, curriculum and staff area savings) which can be enacted in order to ensure that a balanced three year budget can be set.”
A spokesman for Rainhill High said the £1m deficit projection was a “worst case scenario” and that the school was in a better financial position than most similar organisations.
He added: “The school employs robust financial management, as a result of which it is forecasting a balanced budget for the next two academic years.
“All schools have to forecast budgets and these can only be finalised when schools have levels of income and expenditure confirmed. As a result, in-year projections are always more precise than subsequent years; this is the case in all schools. Best practice is always to take a worst case scenario and to revise it as confirmed figures are announced by the government; an approach taken by school and endorsed by the school’s auditors.
“Nationally, many school are forecasting in-year budget deficits, this been widely reported in the national press.
“Rainhill High School’s budget is therefore in a stronger position than many schools across the country because of the quality of its financial planning.
“Like all schools we are hoping that the Government will seek to increase the National Funding Formula and fund schools at a higher level than at present.
“The school is subject to rigorous financial checks. The auditors and trustees are completely satisfied with the financial performance of the school, hence it’s designation as a ‘going concern’ in its annual statement and the receipt of ‘clean’ audit report.
“The school also adopts a transparent approach with its finances, clearly communicating to all staff and union representatives when any forecasts are revised and when plans are put in place to reduce expenditure and/or increase income.
“Rainhill High School is a high performing, oversubscribed school and remains wholly committed to providing the possible education to its students and the local community. DFE tables published in January 2018 confirm that it is the highest performing and is the highest performing school based Sixth Form in St Helens.”