Agenda item

(To receive a report from Elizabeth Bowes, Strategic Finance Manager, School Finance Team, which advises the Schools' Forum of the revised Schools Budget for 2018/19 and to seek support for the proposed use of the underspending from 2017/18)

The Forum gave consideration to a report from Elizabeth Bowes, Strategic Finance Manager, Schools Finance Team, which provided the revised Schools Budget for 2018/19 and sought support for the proposed use of the underspending from 2017/18.

The Forum was advised that a revised Schools Budget was necessary each year to reflect the under or overspending arising on the (DSG) in the previous financial year and adjustment to the DSG once the Early Years figures had been confirmed.  The Forum was advised that under (DfE) regulations, the LA had to consult with the Schools Forum over its plans to utilise underspendings, or address overspendings.

The report highlighted that the cumulative underspend carried forward at 31 March 2018 was £12.806m (the underspend reported took into account of the agreed c.£3m one-off delegation to all schools in 2018/19).  Details of the net underspendings of £4.151m on budgets in 2017/18 held centrally within the (DSG) were shown in Appendix A to the report.

Appendix B detailed the commitments that were anticipated which totalled £7.462m.  The report highlighted that there was likely to be other commitments that could arise during the year within the school arena that the LA would be required to respond to.  It was highlighted that the DSG continued to be at the lowest level of underspend for several years. 

It was reported that the DfE were continuing to review the four blocks (Schools, Central School Services, High Needs and Early Years block) that make up the DSG.  The areas of financial risk relating to the centrally managed budgets included:

Schools block – It was highlighted further that there remained uncertainty for 2019/20 and future years to fulfil the current School reorganisation policy based on the new formulaic approach.  It was also noted that the time lag of factors did not take account of current year rises in costs; therefore, such costs would have to be managed within existing funding levels.

Central Schools Services block – It was reported that from 2020/21, the government intended to reduce the historical commitments funding allocations where LAs expenditure had not reduced to support its drive towards the move to a 'hard' national funding formula.  It was noted that funding levels for historic commitments from 2020/21 remained unclear.

Early Years block – The Forum was advised that the DfE had confirmed the intention to continue with the 'supplementary funding' until at least 2019/20.  It was noted that a government report was planned for later in the year, and that future funding levels remained unclear.

High Need block - The Forum was advised that the DfE had confirmed that planned changes for Hospital Education would not result in LAs seeing a reduction in the hospital education factor amounts in 2019/20; and that from 2020/21 the position remained unclear.

It was highlighted further that there continued to be a growing demand for more specialist support for young people, which was having a material financial impact on the High Needs block.  It was highlighted that the SEND strategy had also identified a need to increase special school capacity over the next five years to respond to the increase in demand.

It was highlighted in 2019/20, Lincolnshire would continue to be in receipt of protection funding, the indicative protection was planned to be £41 per pupil (£5.776m) in 2019/20.  It was felt that this area remained a financial risk particularly at a time of increasing demands.

The report highlighted that there was an increasing number of LAs now incurring a deficit on their overall DSG account, largely because of overspends on their High Needs block.

The Forum was advised that the LA proposed that the remaining sum was not committed but  held in reserves due to the much tighter financial environment, and the financial uncertainties created from the DfE funding changes, the LA needed to be in a position to manage and act prudently and avoid overspending of the DSG.

During discussion, the Forum raised the following points:-

·         Whether the £5.3m could be reduced.  Officers advised that this was the lowest level the LA had been at; and any lower would create a financial risk going forward; and

·         One Forum member enquired what the position would be going forward.  Officers advised that at the moment the 2020/21 settlement figure was not known and would form part of the next spending review; and that the LA had various local challenges for example the increase in Higher Needs costs, as the number of children with complex needs was increasing.  It was noted that the LA had been putting in strategies to utilise funding more effectively through adopting early intervention strategies (such as Healthy Minds, Behaviour Outreach Support Service), and the development of the SEND strategy, which in time will reduce the number of out of County placements, and the amount of travelling for young people by having local inclusive schools; and

·         It was also highlighted that lobbying was taking place to ensure Lincolnshire received fairer funding in the next spending review for all areas of Council funding.

RESOLVED

1.    That the Revised Schools Budget for 2018/19 be noted.

2.    That the Local Authority proposals for use of the uncommitted sum, as outlined in section five of the report be supported.