Agenda item

Jenny Lawrence presented a paper on the 2018/19 Dedicated Schools Grant Settlement for Leicestershire and the 2018/19 Schools Budget.  The report builds upon a number of reports to the introduction of the National Funding Formula.

 

Jenny explained the background to the funding system in terms of how it is received into the local authority and the role of the Schools’ Forum in setting the 2018/19 Schools budget.

 

Jenny referred to the Dedicated Schools Grant (paragraphs 20-21) section in the paper and highlighted to the Forum members that the high needs grant will not be confirmed until May 2018.  Forum members were also asked to note that the final grant for Early Years is not expected to be confirmed until May 2019. 

 

In terms of ranking for the DSG Schools’ block Leicestershire is the 23^rd lowest funded for the primary pupil rate and third lowest for secondary. 

 

Jenny referred to paragraph 26 which sets out the formula basis for high needs funding.  For Leicestershire this results in a minor increase in funding for 2018/19 but includes c£4M of protection funding which is not guaranteed in the long term.  Jenny asked Forum members to recognise this.

 

The Central Services Block of the DSG is a separate block for the first time in 2018/19.  It funds historic financial commitments related to schools such as pre-retirement costs and ongoing centrally retained functions such as school place planning and other statutory requirements.

 

Paragraphs 37-44 sets out the school funding formula proposals for 2018/19 and 2019/20 which were considered and approved by the County Council’s Cabinet on 9 January 2018.  The budgets were submitted to the ESFA and a query was received in respect of the funding held as growth.  The position of the local authority was provided and this was accepted by the ESFA who have confirmed that the formula appears compliant with the funding regulations.

 

The Key Stage 3 rate per pupil was discussed at a previous Schools’ Forum.  The NFF figures issued by ESFA in July 2017 included schools with only KS3 pupils receiving the higher per pupil minimum funding as for KS4 which was thought to be an error.  As funding guidance sets out a weighted calculation for secondary schools with no KS4 pupils based on weighting the primary and secondary minimum per pupil funding rates, however Leicestershire high schools have no primary year groups.  This position was queried with the ESFA who confirmed that there is ambiguity in the wording of the guidance and stated they would prefer that the KS3 minimum per pupil entitlement be funded and not the higher rate but cannot insist on this.  The 2018/19 Leicestershire Formula applies the KS3 minimum per pupil funding rates for KS3 only schools. The affected school have been advised that this higher rate may only be applicable for 2018/19 and KS3 only schools may fall to the lower rate in 2019/20.

 

Jenny highlighted the rebalancing of the formula on the Age Weighted Pupil Unit (AWPU) and the impact of the floors and ceiling impact.  For 2018/19 there is a positive adjustment which has been reflected in the formula by an increase in the ceiling to 3.2% against 3.0% included within the NFF.

 

The DfE issued a paper in February 2018 on expected inflationary pressure on school budgets over 2018/19 and 2019/20.  Local calculations suggest that the cost of support staff could increase by 4.5% (including pay award, NI and superannuation) but there was no information on the teaching award.

 

Paragraphs 51-57 sets out the schools’ approach to growth, which is the most significant financial risk for the schools block whilst the ESFA have yet to set out their approach to funding this past 2018/19.  Jenny will be attending a workshop to discuss how growth should be funded.

 

Pupil Premium rates are unchanged with the exception of the Pupil Premium Plus for Looked After Children which has increased from £1,900 to £2,300.  There is no change to the Early Years provider budgets.

 

Jenny referred to the Dedicated Schools Grant Reserve table (paragraphs 66 – 69) which refers to the overspend on high needs for this year and 2018/19 and deficits reverting to the local authority from maintained schools entering into sponsored academy arrangements. 

 

Jenny mentioned the SEND Provision Capital Grant which was announced during 2017/18 by the DfE and confirmed at £0.709M for the next three years on the basis that the local authority will make changes to SEND provision.

 

Karen Allen thanked Jenny for her report and invited comments from the Forum members.

 

Callum Orr asked where the amount per pupil for AWPU (£4,385.81) had come from.  Jenny stated that these are the national rates set by the DfE within the ‘Schools Block National Funding Formula: Technical Note’ issued in September 2017, this figures appears to have been rounded by the DfE to £4,386 in high level information issued by them.  One of the things that had not been fully understood in schools is that the minimum amount per pupil and AWPU rate are different.

 

David Thomas asked Jenny if she could quantify the additional funding the KS3 only schools would get as a result of being funded at KS4 minimum per pupil rates.  Jenny agreed to confirm this in the minutes.

The value in the Leicestershire formula for 2018/19 is confirmed as £698,898.

 

Graham Bett referred to paragraph 57 and asked how this decision is made.  Jenny confirmed that retention in unallocated growth funding decision had been a Cabinet decision and a further decision may be necessary if Schools Forum did not agree retention and the local authority were to seek adjudication from the Secretary of State.

 

Jenny referred to Item 2 in paragraph 17.  To create a fund for pupil growth in order to support the local authority’s duty for place planning and agree the criteria for maintained schools and academies to access this fund.  Martin Turnham asked how the budget will be allocated.  Jenny referred to the School Growth policy which was agreed at Schools’ Forum in 2016.  Martin raised an individual issue regarding the value per primary pupil based upon pupil characteristics recorded within the October 2016 census and also asked whether it would be possible to revisit the policy.  Jenny commented that school growth in the Financial Regulations and Operational guidance and the DfE’s view is that general demographic growth is met within school budgets and growth policies applied to the basic need for additional school places.  Jenny added that the DfE’s views are awaited on their approach for 2019/20 and the local authority will be part of that conversation.

 

David Thomas asked if the policy agreed in January 2016 would stand for one year.  Karen Allen commented the national formula would now change this.  Jenny commented that it was part of school growth and the national funding formula overtook it.  . 

 

Callum Orr asked what the £1.3M provides for.  Jenny outlined the two distinct areas of growth i) explicit which was for additional pupils in new and expending schools and ii) implicit such as the variations in pupil numbers reflected age range change protection.  Jenny added that the funding cannot be delegated as a one-off and if it goes into the formula, the budget may not be able to be adjusted for the following year.  Callum commented that this would change when the national funding formula changes.

 

Chris Parkinson commented that funding school growth was temporary followed by decline and queried why the use of this funding has been set aside to support age range changes.  Jenny commented that age range change has been supported by DSG and in the new formula is included in the funding identified as growth within the 2018/19 DSG settlement.  The surplus is as a result of reduced costs of age range changes and rates in 2018/19 and arises as a result of the methodology used by the DfE for ‘baselining’ 2017/18 spend and these factors being funded at historic cost.

 

Graham Bett asked whether part of the growth money was from AWPU.  Jenny confirmed it is within the schools’ block.  Graham stated that the local authority could have given this funding to pupils in the system.  Growth policy – is what being proposed is it the norm across authorities.  Jenny commented that it is. 

 

David Atterbury explained that new growth was not predominantly coming out of Leicestershire schools.  There are other factors such as birth increases, new schools therefore new houses and pupils coming out of areas besides Leicestershire. 

 

9 voted in favour of a budget to retain a budget to fund school growth, 5 voted against and there was 1 abstention.

 

Schools’ Forum approved the establishment of a budget to fund school growth (Paragraph 17, Item 2)

 

In response to a query from Dan Neal Jenny explained that the premature retirement budget met historic costs of teachers’ pensions, some going back many years.   A query was raised regarding the miscellaneous amount of £248,000.  Jenny explained that £150K was for commissioning teaching schools and £100K was for school effectiveness.  A Forum member asked about the assessment impact of this funding.  Jane outlined the work being carried out to look at the commissioning arrangements for maintained schools causing concern.

 

Schools’ Forum approved the retention of budgets to meet the prescribed statutory duties of the local authority and to meet historic costs (Paragraph17, Items 3 and 4)

 

Schools’ Forum approved the centrally retained early years funding (paragraph 17 Item 5)

 

Martin Turnham raised his concerns of the use of the notional SEN budget which may not be sufficient to provide £6K particularly if a school is hard pressed for funding.  Jenny explained that the mechanism adopted allowed additional payments to schools if this was the case.  Karen Allen added that SENA are advising parents that they are entitled to 15 hours.  Jane agreed to discuss this with SENA. 

 

David Thomas commented that the special high needs should be available for local special need – notional SEN budget for low level.  Jane commented that this is looked at through the SEND Strategy Board.

 

Schools’ Forum approved the action to be taken in respect of schools where the Special Educational Needs (SEN) notional budget is insufficient to meet the aggregated value of High Needs Funding Element 2 (Paragraph 59)