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 2022/23)

Consideration was given to a report from Elizabeth Bowes, Strategic Finance Manager, Schools Finance Team, on the school funding arrangements for 2022/23 and agreement was sought by the Forum to the Local Authority’s (LA) proposals to a number of centrally held budgets.

A supplementary report had been circulated to the members of the Forum prior to the meeting, which provided a mainstream schools update paper on replicating the National Funding Formula for 2022/23 and the measures to address the affordability gap.

The Forum was advised of the background to the national funding formula; the governments funding intentions for 2022/23, announced on 19 July 2021 and then subsequently updated on 16 December 2021.  It was noted that the Department for Education’s (DfE’s) 16 December 2021 update had minimal changes to the version published in July.  It was highlighted however, that as part of the spending review, the government had announced additional funding to the Dedicated Schools Grant (DSG) to support with unforeseen costs, such as the Health and Social Care Levy.  The Forum was advised that the DSG would continue to comprise of four blocks, details of Lincolnshire’s 2022/23 DSG allocations announced by the DfE were shown in table 1 on page 21 of the report pack.  It was highlighted that Lincolnshire’s overall funding levels across the four blocks had increased in 2022/23.

It was reported that the key national funding formula School’s block funding updates included: an increase in pupil-led formula factor values by 3%; and that the High Needs block had seen an increase due to the funding floor being set at 8% per head compared to the previous year’s funding levels.

The Forum noted that following consultation the methodology for paying rates bills would be changing for all schools and academies.  From 2022/23, bills would now be paid by the Education and Skills Funding Agency (ESFA) direct to the billing authorities on behalf of all maintained schools and academies.  It was noted further that guidance was still awaited as to how schools and academies should treat this cost in their financial accounts.

It was highlighted that within the High Needs block, the basic structure of the formula was not changing, and that LAs would be protected under the formula by seeing a minimum increase of 8% per head in 2022/23 compared to the 2021/22 funding baseline level.  Details of the allocation for 2022/23 were shown on page 23 of the report.  Reference was also made to the growing trend nationally of more young people requiring specialist provision, and that Lincolnshire continued to face significant challenges in establishing a sustainable block going forward.  The Forum noted that transformational work was underway, details of which shown on the top of page 24 of the report.

It was reported that within the Early Years block, Lincolnshire continued to be funded on the ‘minimum funding rate’ which had increased in 2022/23 to £4.61 per hour for early years entitlement.

The Pupil Premium was to continue in the 2022/23 financial year and that funding for 2022/23 would increase in-line with the latest inflation forecasts. These were shown on page 25 of the report.

The Forum noted that the Universal Infant Free School Meals rates for 2022/23 academic had not yet been published. 

The Forum was advised that the Autumn spending review had confirmed schools supplementary grant funding for 2022/23.  In addition to the DSG, nationally mainstream schools would be receiving an additional grant in 2022/23 worth £1.2bn.  It was noted that this grant was being provided in respect of the Health and Social Care Levy, however, primary and secondary schools could use the grant towards unforeseen costs and other cost pressures.

It was noted that for the DSG School Budget for 2022/23, the LA was proposing to continue replicating the National Funding Formula (NFF) in 2022/23, subject to Minimum Funding Guarantee (MFG) of +0.5%.  The supporting paper explained the overall affordability of £1.927m to replicate the NFF in full (including a +2.0% MFG) would be addressed through adopting the same principles and approach that had been applied in the 2021/22 decision when addressing affordability issues of the Schools block.  The following steps were applied: to reduce the growth element of Schools block budget by £1.540m; to continue applying a +0.5% MFG (£0.127m), and the remaining £0.260m from available funds within the Central Schools Services block.  The key NFF changes for 2022/23 were shown on page 26 of the report.  Appendix A also provided a funding comparison of the NFF factors for 2021/22 to 2022/23.

It was reported that the LA had conducted its annual review of the DSG central budgets, and areas of refinements were focused on the demand-led budgets within the High Needs block.  It was noted further that the affordability for all the blocks of the DSG would be finalised over the coming weeks.

Table 2: Budgets requiring Schools Forum decisions – Schools Block; Table 3: Budgets requiring Schools Forum decisions – CSSB ongoing commitments; and Table 4: Budgets requiring Schools Forum decisions – CSSB historic commitments were detailed on pages 29 to 32 of the report. The Forum considered the 3 tables presented.

Reference was made to the School Improvement Monitoring and Brokering Grant and the LAs concern for the rationale for the DfE proposal to remove the funding to LAs for the School Improvement Monitoring and Brokering Grant for school improvement activities supporting maintained schools.  The report highlighted that the DfE had confirmed on 11 January 2022, that following consultation, it intended to press ahead with the reforms.

The Forum was advised that the Council was currently consulting on the budget.  Page 33 of the report advised that for 2022/23 the budget was balanced, however, in the following three financial years there would be a financial shortfall.  It was highlighted that there were two cost pressures relating to Children’s Services, these were Children in Care and Home to Schools Transport.  The Forum was advised that transformational activity was taking place on both of these work streams.

The Forum were asked to consider and comment on the main report and supporting report relating to the NFF, and to support the approaches to addressing the affordability to replicate the NFF factors and monetary values for 2022/23 and by applying the +0.5% MFG per pupil, and to support the Central Schools Services block transfer of £0.260m to the Schools block.  The Forum was also asked to approve the budgets as detailed in Tables 2 to 4 of the report, accordance with DfE regulations.

The following comments were raised:

·       When engagement with special schools and alternative provision would be taking place, so that these sectors could start to plan.  The Forum noted that as there were a number of uncertainties at the moment, the LA would be looking to undertake a survey with the specialist sector to identify anticipated needs and areas of concerns for the sectors.  Then, once financial modelling work was completed, a decision would be taken as to the timing of when the money would be released.  It was noted that the LA would try to build the money into a formula to ensure sustainability over the medium term;

·       Clarification was sought with regard page 24, second paragraph, which advised that special schools funding was currently being reviewed and refined and then further down the page reference to the fact that the principles and formula factors would be remaining the same for 2022/23.  The Forum noted that the actual funding formula was underpinned by detail, and that these fundamentals were still remaining in place, however the formula factors monetary values were being considered by recognising the inflationary challenges schools were facing and incorporating them in the same way as the mainstream funding formula;

·       Some concern was expressed to time lag from when the budget information was released on 28 February 2022, and the impact on schools funding relating to the mainstream 2022/23 NFF being reported on at the April meeting.  The Forum was advised that the information was to be reported in April, as this was the next scheduled meeting of the Forum.  Officers advised that the information could be shared with the Forum earlier, once the LA had received final approval from the DfE.  It was however highlighted that the positive impact of the NFF was that all schools would be receiving an increase in per pupil funding.  Officers confirmed that they were happy to share the information with the Forum and recognised the impact for schools and reiterated that part of the process was to seek support from the Forum for the solutions to address the funding gap;

·       There was welcome for the reviewing of SEND costs to schools, some concern was however raised regarding hidden costs and the impact that had on schools.  An example given was what schools received for an education, health and care plan and what the actual costs were across the county.  Also, the amounts schools were actually taking from their main schools budgets to subsidise the provision for children with additional needs.  One representative advised that £70,000 of her budget was taken up to pay for the education, health and care plans, in addition to the money received from the LA, and that this had a major impact on her school;

·       Clarification was sought regarding the reduction in the schools growth funding budget.  The Forum was advised that the schools growth fund was within the Schools block and was funded by a central formula, which looked at previous census returns at an individual school level and where pupil numbers increased it used a multiplier to determine the amount.  It was noted that the growth funding and the agreed policies were used to support the LAs school place sufficiency statutory duty, when the LA had asked a school to expand; and

·       That it would be useful going forward for tables 2 to 4 to show the historic costs, so that the Forum had an indication of what the budget had been for previous years, so that the Forum could understand the rationale for any increases.  Officers advised the Forum of the 2021/22 budget figures for the central budget activities shown in tables 2 to 4.

The Chairman on behalf of the Forum extended his thanks to Elizabeth Bowes for the presentation.

RESOLVED

1.      That the report be noted.

2.      That the Local Authority’s proposals relating to a number of centrally held budgets be agreed.

3.      That support be given to the approaches to addressing affordability to replicate the National Funding Formula (NFF) factors and monetary values for 2022/23 and by applying a +0.5% Minimum Funding Guarantee (MFG) per pupil.

4.      That support be given to the Central Schools Services block transfer of £0.260m to the Schools block.