SCHOOLS in Powys that are in the red, will have their budgets reset under the new funding formula, but the debt will remain.

On Friday January 4, The Learning Skills and Economy Scrutiny Committee looked again at the funding formula.

Under the new formula 22 schools would lose out, including four that would receive more than £100,000 less.

On the issue Cllr Sandra Davies  (Labour Cwm-Twrch) said: "We don't know who they are, for all of those schools will this result in them starting in deficit.

"If that is the case, then this funding formula will have failed before it begins."

Chairman of the Audit Committee, Cllr John Morris (Liberal Democrat, Crickhowell), added: "I do need clarification, what is the position for schools with deficit budgets?"

Director of Education, Ian Budd, answered: "There's no legal provision to write off deficit unless the school closes.

"Any historic deficit stays with the school unless it closes, that's the statutory position.

"The will be no excess in the allocation to pay back deficits, so there's a pressure that school live within their means.

"Their ability to pay back will realistically be limited."

John Morris added: "It's eye watering seeing the figures, we're talking about millions of pounds.

"Are we just parking those  with no expectation of getting it back?

"Will schools will start from a level budget as the new funding formula kicks in?"

Finance portfolio holder, Councillor Aled Davies, answered that the debt would still be sitting with the school.

The formula, along with the scrutiny committee's advice, will now go to cabinet for a decision on Tuesday, January 15.

It is expected to come into force from April (2019).

Financial predictions for the next three years, show that all secondary schools and many primary schools would go into the red.

Figures predict that schools could be £6.5 million in the red by 2021.

In June, the Cabinet was forced to agree deficit budgets for schools in the red.