The Kensington and Chelsea Schools Forum is set to introduce a balance control mechanism (BCM) for schools, effective from the 2026/27 financial year, based on school balances at the end of March 2026. The forum will implement the BCM based on balances at the end of the 2025/26 financial year, according to the Public Reports Pack.
The decision was made during the Schools' Forum meeting on Monday, 17 November 2025, where members discussed forecast school balances as part of a broader discussion on financial planning for the borough's schools.
According to the Public Reports Pack, school's forecast reports estimate that the total of reserves held by schools at 31st March 2026 would be £3.656m, a reduction of £1.204m, from £4.860m at 31st March 2025. The main factor for this change is related to the academisation of St Thomas More school.
The agreed threshold for balances considered excessive was 20% for Nursery, Primary and Special Schools and 12.5% for Secondary Schools. Forum also agreed a £15,000 minimum threshold and 100% recovery and redistribution of excessive balances above the threshold. Following agreements around the threshold balance control mechanism, officers had also reviewed how potential clawbacks could be redistributed. The Schools' Forum agreed to the methodology for the redistribution of any funds clawed back from schools with excessive balances at the end of 2025/26.
Separate to the BCM it was also agreed that from 2023/24 year-end, each year every school with balances over 5% for secondary schools and 8% for primary and special should complete a school balances form. The form will need to set out plans for the use of the balance and will form part of the budget setting process and will be taken account of in the calculation of any clawbacks. Therefore, potential consequences for schools that fail to complete the school balances form or do not adequately justify their balances include the funds being taken into account in the calculation of any clawbacks.