Newport schools facing ‘unsustainable’ budget pressures

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Schools in Newport are currently expected to go over budget by £4.5 million this year, according to a forecast by Newport City Council.

It is one of several spending areas facing overspends this financial year.

But a senior councillor said she was “confident” the city’s schools would end the year in a healthier financial position.

The latest revenue budget monitoring report for 2025/26 notes schools will be expected to plug their overspends using reserves, and blamed the projected figures on “both one-off [and] an element of recurring expenditure”.

The report, by the council’s head of finance, warns there is a “risk” of that recurring element leading to some schools “entering a deficit position”.

Currently, 53 of Newport’s 56 schools are forecasting an overspend, with three going in the red.

At a cabinet meeting on Wednesday November 12, the council leader, Cllr Dimitri Batrouni, said shrinking budgets were “unsustainable” for some schools and “robust monitoring will be required” to avoid deficits or minimise their impact.

Cllr Deb Davies, the cabinet member for education, said the “vast majority” of the city’s schools had signed up for additional support and “understand” their financial position.

She said the end-of-year budget positions tended to be improvements on their mid-year forecasts, owing in part to “grants that come in during the school year”, and added she was “confident” schools would finish the year in a more stable financial position.

Other council services, outside of education, are also expected to overspend by £5.1m this year.

This includes a £4.4m overspend on children’s residential care, fuelled by “increased demand for out-of-area placements”, explained Cllr Batrouni.

Newport City Council is currently trying to reduce its reliance on such placements, which can be significantly more expensive.

While the council’s own provision currently has  a “low occupancy rate”, there are 22 children in out-of-area placements compared to the 14 assumed in this year’s budget.

Average costs of an out-of-area placement currently stand at £7,800 per week, according to the report.

Factors affecting demand can include the “complexity” of each child’s needs, as well as the need to house each child in “appropriate surroundings”, the report explains.