Agenda item

School Funding Arrangements 2019/20

(To receive a report from Elizabeth Bowes, Strategic Finance Manager, School Finance Team, which advises the Schools' Forum of the school funding arrangements for 2019/20)

Minutes:

Consideration was given to a report from Elizabeth Bowes, Strategic Finance Manager, Schools Finance Team, which advised the Forum of the school funding arrangements for 2019/20.

 

Details pertaining to the background behind the implementation of the national funding formula were shown on page 17 of the report.

 

It was highlighted that the schools revenue funding 2019/20 operational guidance published by the DfE on the 21 December 2018 was available on:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachmentdata/file/767607/Operationalguide2019to2020. 

 

Key information contained within the operational guide was detailed on pages 18/19 of the report for the Forum to consider.

 

It was highlighted that the 2019/20 Dedicated School Grant allocations (DSG) remained a ring-fenced grant which could only be used in accordance with the School's and Early Years Finance (England) Regulations.  The Forum was advised that the DSG would continue to be comprised of four blocks: Schools Block; Central School Services Block; Early Years Block; and High Needs Block.  (Full details relating to the four blocks were shown on pages 19 to 22 of the report presented).  Table 1 on page 19 provided details of Lincolnshire's 2019/20 DSG allocations.  It was highlighted that Lincolnshire's schools funding levels were increasing through the national funding formula, which was improving Lincolnshire's position nationally when making comparisons.  It was highlighted further that Lincolnshire's primary schools funding overall was 48th lowest out of 150 Local Authorities (LAs) overall, and that Lincolnshire's secondary schools was 56th lowest out of 150 LAs overall.  It was noted that the overall Schools Block funding was distributed to all schools through the agreed approach of replicating the national funding formula (subject to affordability).

 

The Forum was advised of the new formulaic approach to the LA's growth allocation and that this would cover both explicit and implicit growth.  Detailed at Appendix A to the report was a copy of the primary and secondary schools reorganisation policies which allocate funding to schools for planned reorganisation to support the Local Authority's statutory responsibility to provide sufficient school places.

 

It was reported that within the High Needs block of the DSG, Lincolnshire would be in receipt of £5.776m of protection funding for 2019/20, when comparing the new national funding formula allocation to Lincolnshire's current High Needs block funding level.

 

It was reported further that pupil premium funding for 2019/20 would be protected at the 2018/19 rates; and that pupil premium allocations for the financial year 2019/20 would be published in June 2019, which would be based on pupil number data from the January 2019 census.

 

The Committee was advised that the grant for universal infant free school meals continued at a meal rate of £2.30 for the 2019/20 academic year.

 

The report provided details of the DfE teachers' pay grant to support schools in meeting the cost of the September 2018 pay award.  It was reported that the grant supported the cost of the September 2018 teachers' pay award for 2019/20.  Details of the rates for 2019/20 were shown at the bottom of page 22 of the report.  The Committee was advised that the LA recommended that all schools undertook prudent financial planning by incorporating potential pay cost increases into future financial years.

 

It was noted that work was underway in calculating the budget allocations for individual schools through the LA pro-forma tool.  The report highlighted that the LAs objective was to continue to provide stability in funding for schools whilst maintaining the affordability of the current levels of the DSG.  It was noted that the LA remained committed to replicating the national funding formula in 2019/20 with the protection arrangements in place as detailed below:-

 

·    Adoption of the minimum funding level in 2019/20 of £3,500 for primary schools and £4,800 for secondary schools within the funding formula;

·    Adoption of 0% MFG per pupil in 2019/20;

·    Adoption of the government's funding floor factor for all schools to see a minimum gain of 1.0% per pupil against their 2017/18 baseline; and

·    Adoption of the governments percentage cap in pupil-led funding of the maximum of either 6.09% on their 2017/18 baseline or 36% of their remaining gains in 2019/20.

 

The Committee was advised that as stated in previous years, it was important that the LA took a prudent approach to the setting of central budgets within the DSG.  Reasons why a prudent approach was necessary were shown on pages 23/24 of the report.

 

The Committee was advised further that the LA had conducted its annual review of the DSG central budgets; and that the significant planned changes related to the area of high needs spending.  It was highlighted that due to the demand-led nature of the high needs budgets and the growing trend in the demands for more specialist services it required the LA to set prudent budgets to ensure that it was able to respond to the financial challenges from the changing schools landscape and requirements of pupils.  It was noted that the LA remained confident that the cost pressures could be managed within the existing funding level, however, the sustainability of the budget going forward would be subject to the future funding settlement for high needs funding from central government.

 

The report highlighted that DfE regulations contained a number of provisions in relation to the setting of central budgets within the DSG; and as a result of these regulations, tables 2 to 4 detailed within the report set out the budgets requiring Schools' Forum approval for 2019/20.  These were:-

 

·     Funding for significant pre-16 growth £3.538m;

·     Admissions £0.527m;

·     LA Retained Duties for all schools £1.530m;

·     Servicing of the Schools' Forum £0.020m;

·     Schools Broadband £1.350m; and

·     Private Finance Initiative £1.180m.

 

It was also reported that the former Education Services Grant – General Duties related to the statutory responsibilities LA's hold for maintained schools only, the LA had decided not to retain funding when providing these services, but the LA would continue to review this on an annual basis.

 

In conclusion, the Committee was advised that the Executive were currently consulting on a single year financial plan for the Council's revenue and capital budgets to take the Council to the end of the four year funding deal from the government.  It was highlighted that there was uncertainty around government funding beyond the four year funding deal after 2019/20.  It was noted that the Council's total income was £441.707m in 2019/20 and that there was planned expenditure including cost pressures and savings of £460.064m.  This created a shortfall of £18.357m, which would be met from the use of one-off reserves. 

 

During discussion, the following points were raised:-

 

·    The cost of home tuition.  Officers unfortunately did not have this figure to hand, but agreed to respond to the requestor outside of the meeting;

·    A question was asked regarding the level of reserves.  Officers confirmed that there were General Reserves and Volatility Reserves to support the Council however, they could only be used once and would not bridge the anticipated gap in the Council's budget over the next few years; and

·    Private Finance Initiative (PFI) – The Forum was advised that this supported the funding commitments for seven schools; and that without this budget, the LA would be unable to finance the on-going costs of the historic contractual commitments.  It was highlighted that the PFI arrangements ensured that no school was disadvantaged.

 

The Chairman on behalf of the Committee extended thanks to officers for the report.

 

RESOLVED

 

That the Local Authority's proposals relating to a number of centrally held budgets as detailed on pages 25 to 27 of the report and summarised above be agreed by the Lincolnshire Schools' Forum. 

Supporting documents:

 

 
 
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