Agenda item

(To receive a report from Tony Warnock, Operations and Financial Advice Manager, which provides the Schools Forum with a brief on school funding arrangements for 2105/16, 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 Operations and Financial Advice Manager, which briefed the Schools Forum on school funding arrangements for 2015/16; and sought support for the Local Authority's (LA) proposals relating to a number of centrally held budgets, which were detailed in Table three of the report presented.

In guiding the Forum through the report, particular reference was made to:

·         The background to the report, the Forum noted that the government was not proposing any major changes to school funding arrangements for 2015/16.  Members were also advised of the actions that had taken place since the last meeting, these were detailed at points one to seven on page 20 of the report;

·         The impact of the Schools funding announcements made on 18 December 2014.  It was noted that the information confirmed that the operation of the Dedicated Schools Grant (DSG) would remain largely unchanged.  It was noted that there had been some changes made by Department for Education which included funding for non-recoupment authorities being transferred in to the LA's DSG in 2015/16; the early years block now included the early years' premium for which provisional allocations were announced in October 2014; that the higher needs block for LAs included any increase in places for 2015/16 academic year that had been approved by the Education Funding Agency (EFA) as a result of their 'exceptions' process, and a share of a £47m top-up fund which had been distributed according to the 2-19 aged population of each authority; and that the DfE had extended the list of licences covered by a single national licence;

·         It was reported that the Education Support Grant (ESG) would be reduced by £200m from the £1.02bn allocated in 2014/15.  It was noted ESG funded the additional responsibilities that academies acquire upon conversion.  As a consequence, the general rate funding would fall from £113 to £87 per pupil in 2015/16.  It was highlighted that the retained duties rate that LAs receive for all pupils would however remain unchanged at £15 per pupil.  The Forum was also advised that in keeping with its stated intention in 2013, the DfE intended to change the protection arrangements for academies, so that their ESG rates converged with those for local authorities.  There would be no top-up for academies in the 2015/16 academic year, but revised protection rates would be introduced, which would operate in tapered bands.  Academies receiving low levels of ESG would not suffer a reduction of more than 1% of their total funding.  However, Academies receiving relatively high ESG could see a fall in their total funding of up to 3%;

·         It was reported that there had been small changes to the pupil premium, this had been reported to the Forum at its October meeting, that the government's intention was to introduce from April 2015 a new Early Years Pupil Premium for three and four year olds, with £300 a year being paid for every eligible child who takes up the full 570 hours of free education entitlement;

·         A full detail of the 2015/16 DSG allocations were shown on page 22 of the report, but is was reported that there were significant differentials between Lincolnshire's DSG per pupil funding rates and the national average.  Lincolnshire's per pupil funding for the schools block had increased by £42.72 from £4,329.10 last year, this was as a result of the government's decision to allocate extra resource in 2015/16 to the 69 least fairly funded LAs.  Both local and national per pupil rates for early years remained unchanged from last year.  Overall, Lincolnshire DSG will increase by 1.6% in 2015/16; and

·         The Forum noted that the LA's main proposal for change to the 2015/16 school funding formula related to Statement of Educational Need (SEN) and Band 6 to 8 statements.  These proposals had been supported by the Forum on 8 October 2014. 

The Schools Forum were advised that the LA took a prudent approach to the setting of central budgets within the DSG, full details of the main changes proposed to DSG central budgets were detailed on pages 23 and 24 of the report, the proposed budgets for 2015/16 were: Broadband for £1.617m; Places in independent schools for non-SEN pupils £0.658m; SEN out of county £7.290m, it was noted that there had been an increase in out of county expenditure, this was as a result of the rise in the number of young people with Autistic Spectrum Disorders,  presently the County's schools were unable to meet this need; and funding for significant pre-16 growth £2.000m.

Table three of the report presented set out the budgets requiring the Schools Forum approval these were as follows:-

·         Funding for significant pre-16 growth -  £2.000m;

·         Places in independent schools for non-SEN pupils (Stamford Endowed Schools) - £0.658m;

·         Broadband - £1.617m;

·         Admissions - £0.449m;

·         Servicing of the Schools Forum £0.020m;

·         Central expenditure from revenue (CERA) - £5.045m; and

·         Schools centrally funded termination of employment costs - £0.045m.

The Operations and Financial Advice Manager outlined the financial outlook for schools, the Council and the Schools Forum.  Full details were shown on page 26 of the report.  Particular reference was made to the fact that there had been a reduction in the Revenue Support Grant (RSG) component in 2015/16 of £33.6m or 26.3% which would leave the Council's 2015/16 RSG at £93.7m, although the Council had identified savings of £30m for 2015/16 it was facing a budget pressure of £29m, most of which related to Adult Care.  The Council therefore proposed to use £32m of one-off reserves in 2015/16 as a temporary measure to balance the budget.  But further significant permanent savings would have to be found for the period beyond 2015/16 and total savings of c. £90m over the next four year may still be required.  The Council's situation had therefore a major bearing on Children's Services; the Directorate had already managed to deliver £30.2m of savings, but it was highlighted that overall the Council faced some very significant challenges beyond 2015/16 which would have a major impact upon Children's Services budgets in future years.

During discussion, the Forum raised the following issues:-

·         The increase in the number of out of County placements.  It was highlighted that some packages cost £300,000 in the independent sector.  It was highlighted further that in the last weekly report there had been 99 pupils receiving out of county care.  The Forum was surprised at the increase in numbers, as three years previous this figure had been reducing.  The Executive Director of Children's Services advised that a report pertaining to how the out of County money was being spent would be presented to the next meeting of the Forum; as the funding contribution from health and social care was complicated to understand.  Some members enquired as to why Lincolnshire's special schools couldn't have the opportunity to expand to meet the rising need.  The Executive Director advised that work was currently ongoing to work jointly in order to invest to save, and so far the special schools that had been approached had not been suitable.  Members of the Schools Forum were invited to come forward with any suggestions;

·         The budget for Capital Expenditure from the Revenue Account (CERA) included a further 20 year commitment relating to a Private Finance Initiative (PFI) contract for the building of seven county schools 12 years ago; and

·         Use of the Redeployment Officer by academies, it was felt that this service could be used to support academies and should therefore be available to them.

RESOLVED

1.    That the report presented be noted.

2.    That support be given to the LA's proposals for the setting of central budgets as shown below in Table 3 of the report presented.