Agenda item

(To receive a report from Elizabeth Bowes, Strategic Finance Manager, Schools Finance Team, which provides the Schools' Forum with an update on the school funding arrangements for 2020/21 and seeks approval for the Local Authority's proposals relating to a number of centrally held budgets)

Consideration was given to a report from Elizabeth Bowes, Strategic Finance Manager, Schools Finance Team, which provided the Schools' Forum with an update on the school funding arrangements for 2020/21 and sought approval for the Local Authority's proposals relating to a number of centrally held budgets.

Page 1 of the report provided some background information relating to school funding announcements.

The Forum was advised that the Dedicated Schools Grant (DSG) remained a ring-fenced grant which could only be used in accordance with the School's and Early Years Finance (England) Regulations.  It was noted that the DSG continued to comprise of four blocks – Schools block, Central School block (CSSB), High Needs block and Early Years block and that each of the blocks continued to be determined by a separate national funding formula.  Further information relating to the aforementioned four blocks was contained on pages 3 to 5 of the report.

Table 1 on page 2 of the report provided details of Lincolnshire's 2020/21 DSG allocations.  It was noted that Lincolnshire's overall funding levels across the four blocks had increased in 2020/21, particularly in the Schools block due to the government removing the gains ceiling cap; the increase in pupil-led formula factor values by 4% and the implementation of the minimum per pupil formula factor.  The High Needs block had also seen an increase, due to the funding floor being set at +8.0% compared to a Local Authorities existing baseline funding.

Page 5 and 6 of the report referenced Pupil Premium, Universal Infant Free School Meals, Teachers Pay Grant and Teachers Pension Grant.  The Forum was advised that the funding rates for 2020/21 had not yet been confirmed.  The report confirmed that the Teachers' Pension Grant and the Teachers Pay Grant would continue to be funded through a separate grant to the national funding formula over the next three years.

Reference was also made to the DSG School budgets for 2020/21 (details of which were shown on pages 6 and 7 of the report presented); the DSG Central Budgets 2020/21; and the impact upon Local Authorities entering into a DSG deficit.  It was highlighted that although Lincolnshire was not in a financial deficit position, costs were continuing to rise in the area of high needs at a significant rate, as a result of the growth and complexity of pupils requiring additional support.  It was highlighted further the Local Authority had conducted its annual review of the DSG central budgets; and details of the significant planned changes were shown on page 8 of the report.

Page 8 of the report also provided information relating to the Department for Education regulations relating to the setting of central budgets within the DSG.  In accordance with the regulations, members of the Forum were asked to consider Tables 2 to 4 of the report which set out budgets requiring Schools' Forum approval (pages 9 to 11 of the report).

During consideration of the aforementioned tables, officers highlighted the following:

·         Table 2 – Schools Block Funding for significant pre-16 growth (school reorganisations).  That the £3.227m budget allocated through the DfEs formulaic Schools Growth was essential for the Local Authority to fulfil its strategic and statutory responsibilities to provide sufficient school places in Lincolnshire;

·         Table 3 – Central School Services Block on-going commitments – The Forum noted that the Local Authority had a statutory duty to operate the admissions arrangements in county schools (the proposed budget for 2020/21 was £0.545m). The Forum noted further that the Local Authority had statutory responsibilities for all schools and details of those responsibilities were shown in table two on page 10 of the report (the proposed budget was £1.530m, which was the level of funding the DfE added to Lincolnshire's DSG when the decision was made by the department to move funding into the Central School Services block); and reference was also made to the servicing of the Schools Forum (the proposed budget for 2020/21 was £0.020m); and

·         Table 4 – Central School Services Block historic commitments – Reference was made to the Schools Broadband service, which the budget continued to fund an aggregated broadband provision to all schools and that all schools would continue to receive the consolidated core schools broadband contract to 31 October 2022 (Including academies), (the proposed budget for 2020/21 was £1.199m). The Forum noted that the Private Finance Initiative (PFI) related to contractual commitments for seven schools that had been entered in to in early 2000.  In response to the government's significant funding reductions (of 20% or £0.556m) to historic commitment funding levels, the Local Authority would be creating a PFI formula factor in 2020/21 to manage the financial risk of future reductions, which would require a budget transfer of £0.535m from the Central School Services block to the Schools block.  The budget of £0.573m would be required to meet the affordability gap and unavoidable costs for the four PFI special schools.  It was noted that there was a funding gap on historic commitment due to lateness and scale of the funding reductions, which had been flagged to the Education Skills Funding Agency (ESFA) for consideration; and

·         It was highlighted that in accordance with established practices, the Local Authority would be reporting to Schools' Forum in June 2020 the final budget for 2020/21, as set out in the Section 251 budget statement, which had to be published by 30 April 2020.

The Forum noted that the Local Authority continued to make the decision not to retain funding in the Schools block for statutory duties relating to maintained schools only, and that this would be reviewed on an annual basis.

It was reported that the Executive were currently consulting on a single year Council financial plan for revenue and capital budgets for 2020/21 following the government delaying the full spending review until 2020.  It was highlighted that the Council's medium term financial position was a £6.3m deficit by 2022/23; and the financial years 2020/21 and 2021/22 were £0.6m surplus and £12.9m deficit respectively.  The Forum noted that a number of assumptions underpinned this budget and it was expected that these would be refined upon central government releasing detailed 2020/21 funding information.  It was highlighted that the situation for the Council continued to have significant bearing on Children's Services budget of £115.056m; as the challenge of contributing towards the Council's savings target was more difficult for Children's Services due to the volatile and demand-led budget of home to school/college transport budget and increased demands on social care services.

During discussion, the Forum raised the following points:-   

·      Members asked for a split of the £1.530 LA retained duties for all schools between the various statutory responsibilities.  Officers agreed to bring back further information relating to the cost of the statutory responsibilities for supporting all schools;

·       EMPSN model and the buying power for schools.  Clarification was given that the issue of Broadband was being raised at head teacher briefings.  It was highlighted that the existing contract ran until October 2022, thereafter the Local Authority would be unable to retain a budget centrally.  The Forum noted that the Local Authority would be working with all schools to transition onto a new model of direct billing using a sustainable and reliable platform for procuring school broadband services and maintaining the collective buying power of Lincolnshire schools; and

·         Confirmation was given that nursery school supplementary funding had been extended to March 2021; and that the matter was still being discussed by the DfE.

RESOLVED

That the Lincolnshire Schools' Forum agreed to the Local Authority's proposals to a number of centrally held budgets as detailed in Tables 2 to 4 in the report presented.