Finance - Outcome of the review of the Balance Control Mechanism

The Schools’ Funding Forum reviewed the Balance Control Mechanism (BCM) with the view of allowing greater flexibility for maintained schools to roll forward unspent balances from one year to the next.

They are still keen for schools to use their current funding on current pupils and would prefer schools not to save school funds over a number of years for capital projects. Their preference is for schools to use the low interest rate loan facility provided by Kent County Council.

The loan scheme enables schools to purchase their asset much earlier than through savings therefore benefiting pupils sooner. The interest rate remains excellent at 1% above the Bank of England bank rate and the cost of the loan repayments is funded from future funding. Details of the loan scheme and a quotation tool to determine the repayment amounts is available on the Financial Control page.

The good news from the review is there is an increase in the percentage allowed to be retained for uncommitted purposes by 50%. This means Primary schools and Pupil Referral Units will increase from 8% to 12%, and Secondary schools will increase from 5% to 7.5%. It has been decided that Special Schools will now be included in the BCM at the 12% limit.

The new percentages will be applied to a school’s total income as at 31 March each year beginning from March 2019. The BCM Calculator on Kelsi has been updated with the new percentages.

The permitted exceptions remain unchanged. These are:

• Capital projects
• Late allocations
• Funding held on behalf of other schools
• Other grant income and funding sources

Contact Details

Schools Financial Services
Telephone: 03000 41 54 15
Email: schoolsfinancialservices@theeducationpeople.org