Question for Highland Council on school closure finances

We published recently on the judgment of Solomon the administration of Highland Council was planning in an attempt to offer defiance to the Scottish Government’s intention to strengthen the presumption against closure of rural schools in the Schools Act 2010. Its intention was:

• to adopt the Education Secretary’s requested one year moratorium on school closures
• in contradiction, to do this while going ahead with consultations in the pipeline but giving a guarantee that whatever the outcome of these closure consultation, they would not act on them.

Now that was a clear policy. And that was a responsible use of public money.

However, when it came to the full council meeting which had to approve these conflicted recommendations, did someone manage to get a smidgeon of common sense into the recipe? A less than lucid  report in The Scotsman (23 June 2011) suggests that Highland may have backed off this madness – or not.

The four schools affected by what may still be a mess of a decision – as we noted, are:

• Canisbay (43 pupils – off the A836 on the north coast, west of John o’ Groats and south of the Isle of Stroma in the Pentland Firth, with Canisbay Primary School, a Youth Hostel, Village Hall, Medical Practice,  two Churches and the Canisbay Juniors, a renowned youth football team)
• Crossroads (35 pupils – in Thurso on the north east coast, the town that became the support base for Doonreay Nuclear power station, now the support for the international interest in its pioneering decommissioning – and a renowned surfing challenge)
• Keiss (41 pupils – a fishing village off the A99 north of Wick,  on the shore of Sinclair Bay, south of Brough Head, whose Castles on cliffs – pictured above – on the edge of the village are an enduring tourist attraction)
• Thrumster (37 pupils – in a crofting township off the A99, south of Wick on the matchless north east coast of Caithness, with a faintly preserved railway station – pictured below – from its past on the Lybster-Wick line, closed in 1944)

All four threatened schools can be seen to have healthy rolls. All have committed communities. All have decent school buildings. There is no case to close any of them under the Schools Act 2010.

Highland Council’s press officer, Gordon Fyfe, left a comment on our story correcting the geographical assignment of the four schools (whose identity we did not then know) to Sutherland rather than to Caithness.

Now that we know that he, like so many all over Scotland, reads For Argyll,  we have a conundrum that defies reason in Highland Council’s public statements on their school closure programme.

We and our audience would be grateful for clarification of his Director of Education’s written statements to the parents of one of these threatened schools.

Our interest in this matter is particularly keen since those statements make it clear that Highland Council hoped to benefit financially from GAE losses Argyll and Bute council would incur in its own flawed school closure proposals. All the Scottish local authority predators aim to take lumps out of the joke Argyll and Bute.

Mr Fraser, in a letter dated 30 May 2011, responded to a letter emailed to him no less than one month earlier, on 31st March, by a parent campaigner for Thrumster School, whose former railway station is pictured above.

In that letter, Mr Fraser said:

‘I note your comments in relation to Grant Aided Expenditure (GAE) and would urge caution in assuming that any potential closure of a school with 70 or fewer pupils automatically results in a (sic) off income to the Highland Council.

‘Within the GAE calculation there is a fixed sum of money nationally which is allocated to those local authorities with Primary Schools with 70 or fewer pupils.

‘The critical issue is that this sum is fixed and cannot be varied.’

This statement is flatly wrong on two key counts.

GAE on rural schools is not a fixed pot

Local authorities working in the guise of Education Authorities receive funding from the Scottish Government of the day in two ways:

• for each pupil in every school – of around £2,300 – and allocated by the application of ‘the primary indicator’
• additional funding for each pupil educated in a rural school of ‘less than 70′ pupils. This is ‘the secondary indicator’, the additionality for rural schools. For Highland Council this is £2,662 per pupil.

The basic per capita funding for every pupil in education in a local authority area comes from a fixed and shared national ‘pot’, so the amount varies to a degree.

The overall sum available to support each pupil in a rural schools with rolls of 69 and under is not fixed, not a shared pot. It depends upon the rolls of the rural schools of relevant local authorities.

If this additional funding did come from a fixed national pot shared between relevant local authorities, it would mean that if there were only one rural school left in operation in Scotland, it would scoop the pool.

But in his letter of 30th May 2011 to Thrumster, Mr Fraser actually makes it clear that Highland, in their incorrect belief that the GAE line on rural schools is indeed funded from a fixed pot, were actually hoping to benefit from the GAE losses in Argyll and Bute’s flawed closure proposals.

Highland’s scheme to benefit from Argyll and Bute GAE losses

In his letter of 30th May 2011 quoted above, Mr Fraser also says to the Thrumster parent concerned:

‘Hypothetically, if the Highland Council reduces the number of Primary Schools with a roll of 70 or less pupils by 2 as a result of a school amalgamation programme and Argyll and Bute Council reduces similar size schools by 5 schools as a result of a school  amalgamation then (assuming that all other changes across Scotland have a neutral impact) Highland Council could receive a larger share of GAE. This is on the assumption that the merged schools created by Argyll and Bute have a school roll of 70 pupils and
above.’

As we understand it, however, this statement testifies to Mr Fraser’s continuing misunderstanding of the GAE line for rural school pupils.

There is no fixed pot to be shared. What is allocated to each local authority in respect of additional support for pupils in rural schools with rolls of under 70 (69 and under) depends solely on the numbers of their primary pupils educated in schools within this size limit.

So, judging from Mr Fraser’s own scenario, if Highland were the jackals gathered on the perimeter of the Argyll battlefield and hoping to benefit from the pockets of the corpses of closed schools, they were self-deluded.

Highland – nor any other local authority, cannot benefit from GAE losses on rural schools additionality incurred by councils like Argyll and Bute, equally ignorant of the operation of the GAE mechanism.

Rural schools of ’70 or fewer’ do not benefit from additional GAE

Mr Fraser’s Thrumster letter also shows a ‘misunderstanding’ of the threshold that qualifies or disqualifies a rural school from attracting additional per capita GAE funding.  What he asserts in the letter – several times, is astonishingly adrift of the reality of the regulation.

We have rendered it correctly above, in that the GAE per capita funding for rural schools applies to those with a roll of 69 and under – the formula, according to the Green Book, being ‘less than 70′.

In his letter to Thrumster, however, Mr Fraser quotes it as applying to primary schools ‘with 70 or fewer’ pupils – and repeats this expression twice in three following paragraphs.  This is  expensively incorrect.

If a school with 69 pupils (‘less than 70′) develops a roll of 70, the GAE per capita allowance for rural schools for every one of the pupils then in that school is lost, not just the 70th pupil’s allowance. With the additional GAE per capita allowance for such schools in Highland Council standing at £2,662 per pupil, this is a serious error.

In the Fraser understanding, a rural school with 70 pupils would attract additional funding to its local authority of 70 x £2,662 + £ 186,340 pa. In fact, it would attract no additional funding whatsoever. Had its roll remained at 69, it would have brought in 69 x £2,662 = £ 183,678.

This is no small error of understanding, as is his puzzling restatement of his earlier misunderstanding of GAE as exposed by SRSN in the Roy Bridge case – that the national sum for the funding of pupils in appropriate rural schools is fixed, where it is not.

This recurring ‘misunderstanding’ is exactly the same misunderstanding of the Grant Aided Expenditure (GAE) funding mechanism made by Argyll and Bute’s Strategic Finance Director, Bruce West, in the first failed set of school closure proposals emanating from this troubled administration.

It is, however, a much worse mistake. West only made it once and learned from the analysis of the expert Scottish Rural Schools Network (SRSN) that exposed his error.

Fraser, his Roy Bridge disaster and Audit Scotland’s intervention

Highland’s Education Director, Hugh Fraser, has been around this track before, as we have published, in the failed attempt to close Roy Bridge school: The Roy Bridge West Highland Line for hope against Argyll’s shambolic school closure proposals.

A review of evidence in 2008, forced by school campaigners in this case, found that the council’s case for closure was based on seriously flawed financial projections. These were a series of ‘errors’ producing a breathcatching level of financial misrepresentation of the true cost of closure of Roy Bridge school.

There followed an Audit Scotland report on Highland council’s performance which, in the section on Governance, classed the evidence of management in this matter as a ‘Key Risk area’ – not a judgment a responsible council wants to see in a national audit report.

A ‘key risk’ is where Audit Scotland identify a problem likely to impinge on efficient financial practice within a council. If they identify such a risk they expect reports to be prepared as to how the failure is to be corrected.

In this case the Director of Education, Hugh Fraser,  had to prepare a report, showing he had learned lessons from the matter and demonstrating how he would ensure that anything like it would not happen again.

This was an obligatory and very public ritual penance imposed by the national audit body. It followed a welter of information received by the campaigners and SRSN under freedom of Information legislation, showing an astonishing picture of subterfuge and untruths used to cloud the reality of Highland’s unsound case against Roy Bridge.

And when Audit Scotland investigated the council’s documentary files, a spectrum of information was found to be false.

Fraser had a rough time internally with lost credibility but doggedly managed to hang on to his job, pulling the salary but no longer carrying unquestioned professional authority.

Now here is is – at it again. However he managed, while in the stocks, to assure Audit Scotland that he had learned his lesson, he is today doing exactly what he promised he would not repeat.

We are at a loss to understand how a Director of Education could make the same mistake twice, particularly following the painful loss of credibility he suffered in the Roy Bridge case.

We are confident that there must be good reason for Mr Fraser’s apparently incorrect statement to the Thrumster parent.

We would therefore be very glad to hear from Gordon Fyfe on exactly what changes to the GAE mechanism his Education Director, Mr Fraser, has now presumably detected – that validate his latest statement to parents in Caithness. We have emailed this question to him and await his reply with interest.

We recommend our article on exactly what went on at Roy Bridge to those who may ask if Mr Fraser should now retain his job after his return to practices he had sworn to leave behind him. And the article includes the story of what the Inverness Courier at the time joyfully described as ‘the consultant paid to review her own work’.

The details of the photograohs above are as follows:

• Keiss castles, top, is by copyright holder, Fergus Mather and is reproduced here under the Creative Commons licence
• The former railway station at Thrumster , above, is by copyright holder, Flaxton and is reproduced here under the Creative Commons licence