YES: Melinda Tilley, cabinet member for children, education and families for Oxfordshire County Council

IT is sensible for any organisation, big or small, public sector or private sector, to hold money in reserve. That is simple common sense.

Had somebody explained this concept to central government back in 2001, when it first began to dramatically overspend every year, the nation might not now be in the deep financial hole in which it finds itself.

Schools in Oxfordshire must manage their finances with the basic and sensible principles of responsible accounting in mind.

They can’t spend every penny they have. Some needs to be kept back to be able to cope with unforeseen circumstances or planned capital/building work. If these contingencies aren’t kept, and an unforeseen situation then arises, such a school would quickly find itself in debt, and that is a slippery slope.

Conversely, schools should not keep reserves that are larger than they need to be, or are growing year-on-year for no logical reason.

Sensible, pragmatic judgements are needed about the amounts that are kept in reserve, so that the children of today get the right amounts of money spent on their education.

Headteachers of good and outstanding schools know very well how much each child needs and are therefore well qualified to look to the future and put money aside for any special projects to improve the outcome for children in the future.

Headteachers are ultimately responsible for taking these judgements. On many occasions they get it right; on some occasions they may not.

Those schools with too much in balances do need to get on and review their situation.

Perhaps the attentions of the council’s scrutiny committee might make them do so.

Most people understand the sound principles of money management that I have outlined – they use them managing their own household budgets, week in and week out. Sadly there are many politicians who do not.

That is why several countries in the Western world are billions of pounds in debt.

Yes, let’s spend the right amounts of money on the education of our children in the here and now – but let’s not do so recklessly and pressure schools into going against every sound principle of budget management.

NO: John Howson, Liberal Democrat spokesperson on education and county councillor for St Margaret’s Division

SHOULD the money allocated to schools each year through their ‘revenue allocation’ be spent that year, or is it appropriate to save some of the cash for spending in future years on capital projects – in reality often on new buildings?

This latter approach reduces the cash available for the day-to-day expenditure on staffing and the other running expenses of the school. That is the question that is at the heart of this debate.

My personal view is that cash allocated as ‘revenue’ is for spending this year. Now some of that spending will be accounted for by putting cash aside as a contribution to a new boiler or a replacement set of interactive whiteboards in a few years’ time.

If they are replaced every five years it is appropriate to put 20 per cent aside each year. That is prudent saving for known expenses related to the operation of the school.

To my mind, the rest of ‘revenue’ cash is for expenditure on teaching and learning for today’s children, not to save to build new facilities for their brothers and sisters who will join the school in a few years’ time.

Headteachers and boards of governors tell me that the arrangements for funding of new capital projects are now so uncertain that they have no alternative but to transfer ‘revenue’ cash into the capital building fund. I do not support that view.

It may well be that governments of all persuasions have handled capital spending on education badly.

The last government concentrated on a ‘building schools for the future’ campaign that largely ignored the shire counties such as Oxfordshire, and the present government has had to focus much of its available capital on creating new primary places to cope with the bulge in the early years of education.

Nevertheless, school reserves nationally in 2011-12 across all local authority-maintained schools were £2.3bn, an increase of £0.4bn (18.8 per cent) over 2010-11.

Releasing some of that money into the local economy might have helped create work for local businesses during the recession, and boosted local employment.

Sadly, the level of schools’ reserves will only grow in size, as academies and free schools increase in number and these schools each save money for possible risks that previously could have been spread across all schools in Oxfordshire, and covered by a single central reserve.

Hoarding cash is no way to create best value for the children of Oxfordshire, and I urge governing bodies to check the position in their school.