Agenda item

(To receive a report from Elizabeth Bowes, Strategic Finance Manager, Schools Finance Team, which provides the Schools' Forum with a summary of the updates from the Department for Education relating to the national funding formula for schools, central school services, high needs and early years for 2020/21)

The Forum gave consideration to a report from Elizabeth Bowes, Strategic Finance Manager, Schools Finance Team, which provided a summary of the updates from the Department for Education (DfE) relating to the national funding formula for schools, central school services, high needs and early years for 2020/21.

The Forum noted that this was the second year of the implementation of the government's National Funding Formula (2019/20).  The Forum noted further that Lincolnshire had replicated the National Funding Formula along with the government's agreed funding floors and ceilings approach to enable incremental steps for schools to move towards the hard formula.

It was highlighted that the Operational Guidance published by the (DfE) on 21 December 2018, had confirmed the 'soft' approach that was due to finish at the end of 2019/20 was to be extended into 2020/21, whereby Local Authorities (LAs) would be continuing to determine local formulas for 2020/21.

It was highlighted that on 30 August 2019, the Prime Minister had announced an investment of over £14bn in primary and secondary education between 2020/21 and 2022/23.  Details of the funding package for schools were briefly explained on page 16 of the report, and a link to the Schools Revenue Funding 2020/21 Operational Guide published on 13 September 2019 was provided for the members of the Forum to access.

Bullet points on pages 16 to 18 of the report confirmed published information within the Schools block; High Needs block; Central School Services; Early Years block; Teachers' Pay Grant; and Teachers' Pension Grant.

The Forum was advised of the following information relating to the published information with the Schools block:

·         That the DfE were proposing to make the minimum per pupil funding levels a mandatory factor in LAs local formula; and that a consultation had been launched concerning this proposal;

·         The minimum per pupil funding level were set at £3,750 for primary schools (currently £3,500) and £5,000 for secondary schools (currently £4,800).  It was noted that the primary level was planned to rise to £4,000 in 2021/22;

·         All pupil-led factors would increase by 4%; and that the exceptions to this included the free school meals factors, which would increase by the rate of inflation; and premises funding, which would continue to be allocated to LAs on the basis of actual spend in 2019/20;

·         That there would be no gains ceiling cap in 2020/21; and that all schools would attract at least their full allocations under the formula.  It was noted that a LA would still be able to use a cap in their local formula;

·         That the LA had the flexibility to set the Minimum Funding Guarantee between +0.5% and 1.84%;

·         That the funding floor to protect per pupil funding in real terms would be at 1.84%;

·         The new formulaic approach would be applied to the mobility factor from 2020/21; and that schools would only trigger funding if the proportion of mobile children exceeded 6% of the schools' pupil numbers;

·         Through the LA local formula, it had been agreed that the LA would undertake a rates funding adjustment to ensure that schools were funded the actual rates cost they incur.  It was agreed that the LA would fund this from the Dedicated Schools Grant (DSG) reserves for 2018/19 and 2019/20; and

·         That LAs would continue to have the ability to transfer up to 0.5% of their Schools block to other blocks of the DSG subject to Schools Forum approval.

It was noted that within the published information outlined, the High Needs block funding floor would be set at 8% to enable each LA to plan for an increase of at least that percentage.  It was highlighted that officers were seeking further clarification concerning the impact for Lincolnshire, and were waiting for confirmation of funding allocations.

It was noted further that the published information outlined within the Central School Services block, for 2020/21 was yet to be confirmed.  It was also highlighted that the historic commitments category of funding would start to reduce from 2020/21; and therefore without confirmation of funding allocations, it was unclear of what impact this would have on Lincolnshire's historic commitments for schools.

It was reported that the Chancellor had announced on 4 September 2019, that early years funding would be increased by £66 million to increase the hourly rate paid to childcare providers through the government's early year's entitlement.

The Forum was advised that the Teachers' Pay Grant would continue to be paid separately from the National Funding Formula in 2020/21; and that rates per pupil were yet to be confirmed for 2020/21. The Forum was advised further that the teachers' pension employer contributions grant would continue to be funded through a separate grant over the next three years.

The Forum noted that the Education & Skills Funding Agency (ESFA) had launched a consultation on 10 September 2019, seeking views on how LAs should implement the National Funding Formula mandatory minimum per pupil funding levels in local funding formulas.  The Forum was assured that the LA would be providing a comprehensive response to the consultation.

It was highlighted that an increasing number of LAs were incurring a deficit on their overall (DSG), largely due to overspends on their Higher Needs block.  The Forum noted that from 2019/20 the ESFA had tightened up the rules under which LAs had to explain their plans for bringing the DSG back into balance.  The Forum noted further that where a LAs cumulative DSG deficit was more than 1% of its overall DSG at the end of the financial year, the LA would be required to produce a report signed by the Chief Finance Officer detailing the recovery plan.

In conclusion, the Forum was advised that the funding announcements for Lincolnshire were positive.  It was however noted that there was still great uncertainty at national level, but it was hoped that greater clarity would be provided in the coming months.

The Forum was reminded that at the meeting on 11 December 2017, the Forum had approved that subject to affordability, the LA would replicate the NFF for Lincolnshire schools.

Details of the next steps required were shown on page 19 of the report.

During discussion, the Forum raised the following points:-

·         Ceiling Cap – It was highlighted that there would be no gains ceiling cap in 2020/21 and that this was a positive outcome for gaining LAs like Lincolnshire.  It was highlighted that the LA must ensure affordability of the Schools block when replicating the National Funding Formula.  The main reason that could cause affordability issues was the use of lagged data when funding the Schools block compared to the National Funding Formula, which used the latest October census information.  Reassurance was given that LA officers would explore all opportunities if affordability became an issue to minimise the impact amongst schools;

·         The nursery school representative expressed concern that their hourly rate would not increase due to the supplementary funding nursery schools received.  The Forum was advised that officers were continuing to seek clarification from the ESFA regarding the 'supplementary funding' for nursery schools post September 2020; and

·         Some concern was expressed regarding the national uncertainty.  The Forum was advised that at the moment the proposals were intentions; and that if implemented would be good news for Lincolnshire; however, there was a note of caution that things could be subject to change and that schools should be following the guidance circulated by the DfE (via School News) concerning Brexit.  Schools were also encouraged to sign up for Brexit News, and to undertake scenario plans for each potential outcome.

RESOLVED

That the National Funding Formula for Schools – Update 2020/21 presented be noted.