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Friday, December 1, 2023

Deficit of Bradford secondary school hits £6.3m as ‘costly contract’ ends

The deficit of one of the District’s biggest schools has now reached an eye watering £6.3 million.
But Bradford Council says the days of spiralling deficits at Hanson School could soon be coming to an end after a “costly contract” the school had been involved in for a decade has finally come to an end.
A Council finance officer described the move as a “positive step” in finally bringing the school’s finances under control.
In the financial year that ended earlier this month, the deficit of the Swain House school, which has over 1,600 pupils. rose from £4.8m to £6.3m.
For years Hanson’s rising deficit has proved to be a major problem for Bradford’s education services, and last year it was said the deficit would take “a long time” to recover.
The combined deficit of all of Bradford’s schools is currently £6.5m – Hanson makes up the vast majority of this sum.
One of the reasons for school’s the large deficit given when the issue has been discussed at Council meetings is a contract with a third party the school has been tied to.
However, few details of this contract have even been discussed in public meetings due to confidentiality reasons.
Now Bradford Council has revealed that this contract issue has been “resolved” and that this year’s deficit is so high in part due to a “settlement payment” needed to get out of this contract.
The Department for Education made an order to convert Hanson into an academy in 2011 after a critical Ofsted report.
But since then numerous attempts to find an academy chain to take on the school have failed.
Performance at Hanson has improved, but the deficit remains an issue.
If the school did become an academy, academisation rules would mean this deficit would be left with Bradford Council.
The latest financial situation was highlighted in a Quarter 4 financial report which went to the Council’s Executive earlier this month.
The Local Democracy Reporting Service asked Bradford Council for an update on what was being done to bring down the deficit.
A statement from the Council released this week said: “Hanson School has moved a step forward to an improved financial outlook with the strong support of Bradford Council, by resolving a costly contract that has been significantly impacting the school’s balance sheet each year.
“For a number of years the school had faced an ongoing annual cost of regular payments under the terms of a contract that was signed more than 10 years ago with a third party.
“The school has now concluded its relationship with the third party and the issue has been resolved.
“Hanson School has reported the position to the Council and this was in turn reported in the Quarter 4 finance report to the Council’s Executive.
“The report shows that Hanson’s deficit is forecast to increase to £6.3m at the end of 2021-22, up from £4.8m in the previous financial year.
“A settlement payment in relation to the termination of the contract is in a large part the reason for the increase in the deficit and will put the school on a more sustainable financial footing for the future.”
Chris Chapman, Director of Finance at Bradford Council, said: “The school has made a positive step in resolving this contractual issue as part of its strategy to bring its deficit down and reshape a sustainable budget for the future.
“The council will continue to work closely with Hanson with more plans in place to build on this progress.”

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