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Schools in Caerphilly are facing a collective deficit and could be millions of pounds worse off next spring.

A new report shows balances have shrunk, from an overall surplus of £5.3m at end of the last financial year, to an estimated deficit position of £1.59m by April 2025.

While the financial situation “will look different for each” school, around one in four reported a deficit last year, meaning they were unable to balance the books.

The outlook for next year suggests more difficult times are ahead.

Caerphilly County Borough Council estimated in June it would record an overall schools budget deficit of £0.4m for 2024/25, but this shortfall has since grown by more than £1m.

The council said “established processes are in place to support schools at this increasingly challenging time for local government”.

Schools in Caerphilly which report deficits are typically given three years to balance their budgets, with extra support given to them via an approach called “team around the school”.

Jane Southcombe, the council’s finance manager for education, accepted there had been a “big jump” in the projected size of the budget deficit since June.

She told the council’s education committee additional Welsh Government funding would help shore up support for schools’ finances.

The report on education budgets comes ahead of a Caerphilly Council debate on what a teaching union has branded a “deepening school funding crisis in Wales”.

The report, published by the school leaders’ union NAHT (National Association of Head Teachers) in September, described a “harrowing” financial picture, “casting shadows over the quality and accessibility of education”.

NAHT Cymru president Chris Parry, who is also the headteacher at Lewis School Pengam, warned in the report that one in three schools is “currently grappling with budget deficits” and claimed per-pupil spending was down 6%.

“By acting collectively, there is hope to reverse the tide and nurture an educational environment that empowers future generations,” wrote Mr Parry at the time.

Caerphilly Council has noted the union’s calls “for school leaders and local authorities to work together through social partnership to argue the case effectively for proper and full funding of education services, rather than face the bleak prospect of schools having to set deficit budgets, reduce spending on pupils, and lay off teaching and support staff just to try to get the books to balance”.

The council’s joint scrutiny committee is expected to debate the matter at a meeting on Monday December 9.