Agenda item

(To receive a report from Tony Warnock, Head of Finance Children's and Specialist Services, which advises the Schools Forum on school funding arrangements for 2014/15 and seeks support for the Local Authority's proposals relating to a number of centrally held budgets)

Consideration was given to a report from the Head of Finance – Children's & Specialist Services, which provided the Schools Forum with school funding arrangements for 2014/15 and sought support for the Local Authority (LA) proposals relating to a number of centrally held budgets.

The report detailed the following Department of Education's (DFE's) changes for 2014/15:-

·         Local Authority's (LA's) were able to introduce a sparsity factor to target funds to avoid small schools becoming unviable;

·         Greater flexibility to target the right level of lump sum to primary and secondary schools;

·         LA's will be required to allocate a minimum of 80% of their delegated Schools block funding on the basis of pupil characteristics and will have to ensure that a minimum amount is funded for each pupil (£2,000 for primary and £3,000 for Key Stage three and four);

·         LA's will provide notional Special Educational Needs (SEN) budgets to their schools on the basis that the schools will meet the first £6,000 of additional support required by a pupil with SEN; and

·         That the prior attainment factor would be amended so that instead of pupils qualifying if they failed to achieve level four or higher in English and maths, funding would be provided if they fail to achieve a level four or higher in English or maths.

Since the last meeting of the School Forum on 9 October 2013, the LA had gone through due process, full details were shown on page 12 of the report presented, and once again there had been significant support for the LA's proposals throughout the process, however a further significant amount of work still needed to be undertaken up to 31 March 2014 before the school budgets could be published.

It was highlighted that DFE guidance had been published on 18 December 2013, which confirmed funding arrangements, details were contained at page 13 of the report presented, the Head of Service made particular reference to:

·         That the Early Years block for 2014/15 would use the January 2013 census, but would be updated in 2014/15 for the January 2014 census (5/12ths) and for the January 2015 census (7/12ths);

·         That the Higher Needs block allocation for 2014/15 was provisional and could be subject to adjustment as a result of submissions made by the LA on 23 December 2013 and a review of those figures by the DFE;

·         A total of £760m additional funding would be provided to enable LA's to secure early learning places for two year olds from lower income households; and

·         LA's would no longer be required to administer the carbon reduction scheme on behalf of schools and so LA's Dedicated Schools Grant (DSG) allocations had been reduced by £50.5m to ensure that there was no loss of revenue to the Exchequer.

It was also highlighted that the DFE had announced that the 2014/15 Education Support Grant (ESG) which covered the additional responsibilities that academies acquired upon conversion would be set for LA's at £113.17 per pupil for mainstream schools and £424.38 and £480.98 per place for Pupil Referral Units (PRU's) and special schools respectively.  It was noted that the LA would continue to receive £15 per pupil for all county pupils, to cover its retained duties.  The minimum per pupil rate for mainstream academies was £140 with the minimum per place rates for PRU's and special academies being £525 and £595 respectively.  There was also provision of an additional amount of £2.34bn funding up to 2017, to address the extra places needed for the growing population.  This was on top of the £800m previously announced for 2014/15.  The government had also confirmed that £150m of capital funding would be provided to improve school kitchen and dining facilities, in order to offer every infant pupil a free nutritious school meal at lunchtime.

A full detail of the 2014/15 pupil premium was detailed on page 14 of the report.  It was highlighted that the government still intended to introduce a national funding formula during the next spending review period, to reduce funding differences between similar schools in different areas.  Officers advised that the planned consultation had been put back to the spring of 2014.

The report detailed the 2014/15 DSG allocations: Table one identified Lincolnshire's 2014/15 DSG block allocation and table two provided the analysis of the Additions.

The Schools Forum was reminded of the changes to the 2014/15 formula (these were highlighted on page 15 of the report).

Table three on page 16 of the report identified the main proposed changes to central DSG budgets.

Table four on page 17 provided the Forum with information relating to the proposed budgets for 2014/15 which required Schools Forum decision, which included:

·         Funding for significant pre-16 growth.  Based on current commitments and expected growth it was estimated that a prudent budget for 2014/15 was £1.500m, the same amount as budgeted for in 2013/14;

·         Places in independent schools for non-SEN pupils.  It was reported that without this budget the LA would be unable to meet its contractual liabilities.  It was the LA responsibility to make provision for these young people.  The proposed budget was £0.930m;

·         Early Years proposed budget was £16.298m;

·         Broadband, the proposed budget was £1.778m;

·         Admissions, It was reported that the proposed budget of £0.449m was the same as that set for 2013/14;

·         Servicing of the Schools Forum, again the proposed figure was the same as that set in 2013/14, a figure of £0.020m;

·         Carbon reduction commitment, It was highlighted that although there was no longer a need to retain a central budget for this purpose, the LA still had a £0.050m commitment in respect of smart metering;

·         Central expenditure from revenue.  Without this budget of £5.126m, the LA would not be able to finance on-going costs of historic contractual commitments, the budget proposed was therefore very similar to that proposed in 2013/14; and

·         Schools centrally funded termination of employment costs. It was reported that the commitment was for a redeployment officer who would continue to help schools avoid redundancy costs by redeploying staff in other schools wherever possible.  The proposed budget was £0.045m;

It was highlighted to the Schools Forum that the budgets proposed were prudent, and that some minor amendments might be necessary, but material changes were not expected.  In accordance with established practise, the LA would report to the Schools Forum in April 2014 the final budgets for 2014/15, as set out in the S.251 budget statement which has to be published by 31 March 2014.

The officer highlighted concerns relating to the DFE's plan to review the Higher Need block funding, and advised that any concerns would be reported to the Schools Forum in April.

Overall, the financial outlook for schools, the LA and Children's Services was that there might be an underspending on the DSG in 2013/14, but this sum was expected to be a modest amount.  It was expected that over the four year period, the pupil premium will have added £2.5bn to school funding nationally by the end of the year.  The impact of a national fair funding formula on Lincolnshire schools was impossible to determine, but it was highlighted that as one of the lowest funded LA's, the county's share of the national budget might increase.  It was highlighted further that indications were that the LA's non-DSG budget could be reduced by over 10% in 2015/16 with further cuts to follow in subsequent years.

The Head of Service advised that the revised proforma for mainstream school budgets was due to be sent to the EFA on 21 January 2014, which would reflect the proposals reported to and subsequently supported by the Schools Forum on 9 October 2013.  Briefing Sessions had already been arranged for maintained schools and academies to attend.  The mainstream schools budgets (excluding sixth form funding would be published by the 28 February 2014; and that the Mouchel Finance Team would continue to run budget settings courses for schools in March 2014.

Appended to the report was a copy of the LA Policy on Growth Fund and 2013/14 Commitments.

The Chairman on behalf of the Schools Forum extended his thanks to the Head of Finance – Children's & Specialist Services and his team for all their hard work.

During discussion, the following issues were raised:-

·         Notional SEN budgets to schools, on the basis that the school will meet the first £6,000 of additional support required by a pupil with SEN.  It was confirmed that this was notionally in the budget and that schools would continue to operate in the same manner;

·         Higher Block funding – Members were advised that this information was not available yet, hopefully more information would be out for the end of March 2014;

·         Carbon reduction – whose responsibility was it.  It was agreed that a report would be received for the April meeting.

·         Service premium – It was reported that the information came from data from the schools themselves;

·         Support was expressed to the LA's stance on its prudent approach to the setting of central budgets and reference was made to tightening of the LA's non-DSG funding for 2015/16;

·         Early Years Provision – Reference was made to the fact that the government extended provision to the 40% most deprived two year olds. Reference was made to transport eligibility and school meals.  It was highlighted that there was some flexibility in the budget for two year olds access.  It was noted also that by September all Infants would have access to free school meals;

·         Admissions – some members felt that £0.449m was quite a large budget.  Members were advised that the LA still had a responsibility for admissions across the county and that that this was a reasonable amount to fund that responsibility;

·         Serving of the Schools Forum – It was noted that this amount had not been increased; the figure was the same as that presented in 2013/14.   The budget figure included the cost of running the Forum, timesheets, members expenses and training etc; and

·         School centrally funded termination of employment costs – It was highlighted that the £0.045m represented good value for money, as the Redeployment Officer had been very effective, and without the post schools would pick-up significantly greater costs from redundancies than would otherwise be the case.

RESOLVED

1.    That the report be noted.

2.    That support be given for the LA's proposals for setting of the central budgets as shown in Table Four of the report presented.