Agenda item

Jenny Lawrence introduced the report which sets out the 2021/22 Dedicated Schools Grant Settlement for Leicestershire and the 2021/22 Schools Budget.  The report also builds upon several reports presented through the 2021/22 financial year.

 

Jenny stated that the DSG remains more or less the same as 2020/21; the only change is the DfE has nationally changed the data that they use for deprivation particularly the IDACI data and now have the transfer of the pay and pension grants into the schools block which feed through into the schools mainstream budgets from the new financial year.

 

Jenny referred to the table in paragraph 17 of the report which sets out the role of the schools forum in setting the budget and where particular decisions are needed.  Jenny said there are no items for de-delegation (where maintained schools can decide to let the local authority retain funding for particular items); Schools Forum has to agree the retention of the growth fund which sits within the schools block and the allocations would be used for when housing growth means that new schools would need to be delivered and this was expected to peak in approximately 3 years’ time.  Item 3 outlines several items where Schools Forum must agree to let the local authority withhold those budgets which have not significantly grown.  There is also funding for historic costs relating to approaching retirement costs; a miscellaneous element which was a commissioning budget for maintained schools causing concern and lastly Schools Forum has to approve the funding for the central early years fund that effectively funds the service and is limited at 5% nationally.

 

Jenny reported that the local authority was required now to carry forward any DSG deficit changes balances.  At the last Schools Forum meeting discussion took place on what the DfE would be requiring from local authorities who do have this deficit and what information will be required from those local authorities who have this deficit but that is still uncertain and if actions have been taken by the DfE as a result.  Jenny said that where decision making power is vested in the Schools Forum, the local authority may seek Secretary of State approval to make that decision should approval not be granted.  Jenny added that there used to be a whole range of different copyright licences but there is now just one national licence and it is an exception for school delegation and was mandated to be held and funded by local authorities.

 

Graham Bett referred to paragraph 17 regarding de-delegation from mainstream school budgets.  Graham stated that there was discussion taking place around trade union facilities and asked if this were to make progress would that be the mechanism to facilitate this.  Jenny confirmed it would but that any decision would be made for 2022/23 budget.

 

Jenny set out the funding blocks within the DSG.  Jenny stated that the high needs block had increased to £83.1m and the early years funding which was still an estimate would not be confirmed until June 2022.  There was no direct correlation between the number of pupils in receipt of FEEE and the number of pupils being funded and nationally there are some concerns being discussed at the moment of the impact of Covid; it would appear that local authorities are starting to predict deficits on the early years funding and there are still discussions taking place with the DfE about how pupils are counted because of the disruption of Covid.

 

Jenny referred to the Schools Budget being set at the level of DSG, as discussed before, and has not previously contributed to DSG. There is now legislation in place which means that should local authorities wish to contribute to DSG they now must have Secretary of State approval to do so.  Jenny added that as a result of conversations nationally and regionally she did not think there was any local authority that is adding to dedicated schools grant because of that change in legislation.

 

Jenny referred to the schools’ block and reported that 2021/22 is the second year of the three-year funding settlement and the second year of the DfE’s move towards the National Funding Formula.  Jenny reminded the meeting how the NFF was allocated to schools and that it would never result in every school getting the same amount of money for every pupil.

 

Jenny said that since this paper was written a conversation with the DFE in the Regional Finance Officers Group was held and there was likely to be a soft funding formula for the last year of the three-year settlement i.e. 2022/23 but 2023/24 was likely to be a hard funding formula.  A two-part consultation was expected from the DfE in the spring and then in the autumn – Schools Forum members would be updated when further information is available.

 

Jenny reiterated that the NFF allocation and that for school growth are subject to two totally separate allocations. Leicestershire has opened new schools over the last few years and housing developments are expected to deliver new schools every year and peaking in a couple of years hence holding on to that funding until such time that it is needed.

 

Jenny referred to the 2021/22 schools funding formula and explained that the minimum per pupil levels had been increased as additional money and increased for the transfer of pay and pension grants.  For maintained schools the pay and pension grants would be in the formula budget from April 2021 and believed that academies would continue to have the grant paid separately until the new academic year starts in September thus all schools would be on the same basis.  Jenny added that nationally there had been concerns about the impact of an increase of Free School Meals on the funding formula (local authorities are funding on the October 2019 census date and schools the October 2021 and as it happens that has not been an issue in Leicestershire although there are concerns about how they may roll into the Ever 6 FSM school funding).

 

A concern was raised through LEEP about the impact of financial planning where schools planned for reception year intakes that may have been deferred.  Clarification was sought from the DfE whether the local authority was able to change pupil numbers if it were an issue but from data supplied to the local authority two schools were affected and as such there would be no pupil changes to be made.  Pupil number adjustments do remain in place for schools undertaking or affected by age range changes.  Jenny reported that the formula had been submitted to the DfE for validation and the local authority was still waiting to hear.

 

Jenny said that high needs continued to be a significant issue to the local authority.  Discussions have been taking place with special schools about how best this could feed through into their funding formula because there was no obvious way currently of feeding that through the formula so those discussions with special schools will start shortly.  Jenny talked about the high needs development plan which was further on the agenda.  Paragraph 39 sets out the position that was still one of deficit and expected deficit 3 of the 4 years the plan is covering.  Jenny stated the position improved in 2022/23 and then starts to worsen moving forward as demand is continuing to increase but no identified savings have addressed that.  The position was slightly better than expected in 2020/21 which has improved but there was an expected deficit of around £29m in 4 years’ time.  Jenny outlined the national research that sets out the problems with the SEND system that are responsible for the high needs deficits and research shows most authorities are also in a deficit position.  Jenny said that there were some real concerns about the structure of the SEND system.  The outcome of the DfE’s review of the SEND system was still awaited.  As mentioned before Jenny said that local authorities are now required to carry forward DSG deficits to the following year’s grant but as a local authority that must be offset through the County Council balance sheet.  Jenny stated that as previously discussed there was good work going on in Leicestershire to help reduce the SEND deficit but there was not an overall solution now. 

 

Jenny highlighted the proposed transfer between the schools’ block and high needs block and schools block 2022/23 transfer.

 

David Thomas referred to paragraph 43 and asked if Schools Forum had accepted a decision in principle that money would be transferred as the working group had been set up with the purpose of considering how best the transfer can be achieved and not considering whether the transfer should be made; David did not recall any discussions about getting to the point of agreement.  David also asked if there was a transfer that goes through how that stands when the movement to a hard formula is made.

 

Jenny stated that approval for a schools’ block transfer is only ever for one year and secondly the impact of a hard formula is not known.  The process set out is based on the assumption on the guidance remaining the same, but this would not be known until July.

 

Jane Moore referred to David Thomas’ first comment about the proposal and said that the local authority would be bringing to Schools Forum a proposal to seek agreement to a transfer and at that point Schools Forum can agree or not agree.  The proposal is that the working group was set up to look to support at what the options are and to give time to work through these.  The working group’s recommendations would then be presented to Schools Forum who would then approve or not.

 

Jane Dawda asked about the sparsity funding and if the DfE are reviewing it or is it only for existing schools that receive sparsity funding. Jenny said that from conversations the DfE suggested a widening of the criteria, but this was uncertain until the consultation of the next movement to hard funding formula.

 

Martin Towers commented if the deficit was going to be up to £29m how does taking £2m really help for one year.

 

Schools Forum approved the retention of the budget to fund future school growth (paragraph 17, item 2) – 13 agreed, 2 abstentions.

 

Schools Forum approved the retention of budgets to meet the prescribed statutory duties of the local authority and to meet historic costs (Paragraph 17, item 3) – 13 agreed, 1 disagreed, 1 abstention.

 

Schools Forum approved the centrally retained early years funding (Paragraph 17, item 3) – 14 agreed.

 

Schools Forum noted the number and average cost of commissioned places for children and young people with High Needs (Paragraph 35).

 

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 60) – 14 agreed.

 

Schools Forum noted the average per pupil funding to be taken into account for recoupment for excluded pupils and other purposes (Paragraph 62).

 

Schools Forum noted the payment rates for the Early Years Funding formula (Paragraph 66).

 

Schools Forum noted the formation of a Working Group to identify options for a Schools Block Transfer for 2022/23 and nominates a Member to be part of the Working Group (Paragraph 43).

 

It was agreed to let Karen Allen know if a Member wished to be part of the Working Group.

 

Schools Form requested Leicestershire Primary Heads (LPH), Leicestershire Secondary Heads (LSH) and Leicestershire Special School Heads (LSSH) each nominate a Headteacher and a Business Manager to be part of the Working Group on options for a 2022/23 Schools Block Transfer (Paragraph 43).