Agenda item

The Forum considered a report (Agenda Item 9) which invited members to review the schools block DSG budget, agree the centrally retained budget, and to consider the options for the setting of the school formula funding rates for 2016/17.

The schools block DSG allocation for 2016/17 had now been confirmed as shown in Table 1 (shown alongside the 2015/16 allocation as a comparison).

TABLE 1

It was expected that there would be no carry forward from 2015/16.

Although the DSG funding rate for the schools block had not increased, the overall number of pupils has gone up, with a corresponding grant increase of £626k. The increase in pupil numbers was in the primary sector, with numbers in the secondary sector showing a decrease.

Under School Finance Regulations, funding for a few specified purposes can be deducted from the DSG (be centrally retained) before the balance was allocated out to schools via the formula. It was recommended that the Schools’ Forum approve the amounts to be centrally retained as shown in Table 2.

TABLE 2

After deducting £768k from the total grant available of £96,718k, this would leave £95,950k for distribution to schools.

Graham Spellman asked why the carry forward from the Growth Fund budget 2015/16 was not included in table 2. Claire White responded that the Growth Fund budget was ring fenced and it was necessary to build up that budget for new schools, as no additional funding would be received from the government.

At the meeting of the Schools’ Forum on 28th September 2015, it was agreed that funding rates would remain the same for each factor, and should additional funding be available then its distribution be considered at the January meeting.

After uploading the formula with the October 2015 census data, and running the formula using existing rates, the total funding required was £95,344k. This left £606k headroom available for distribution.

The headroom was a result of growth in primary pupil numbers which were funded at a lower rate than the DSG rate, and a reduction in numbers of pupils meeting the prior attainment and deprivation criteria for funding.

Claire White referred to Appendix A and advised that even before allocating the headroom, a number of schools were showing a reduction in their funding allocation. This was mainly due to decreases in pupil numbers in these schools and that this position  would have been known to schools in advance.

As the funding received per block was not ring fenced, the options for the schools block headroom were as follows:

a)    No increase to funding rates – all headroom (£607k) transferred to the high needs block.

b)    Allocate all the headroom through the AWPU. This would increase the per pupil rate by £32.

c)    Allocate all the headroom through the deprivation factor. This would increase the Free School Meal rate by £227 per eligible pupil.

d)    Allocate £200k through the AWPU, and/or £406k through the prior attainment and deprivation factors. This would increase the per pupil rate by £10, primary prior attainment rate by £25, Secondary prior attainment rate by £41 and Free School Meal rate by £100.

e)    Reduce the AWPU rate by £10 and allocate the resultant headroom (£773k) to the high needs block.

f)     Reduce the lump sum by £5,000 and allocate the resultant headroom (£848k) to the high needs block.

Appendix B demonstrated the impact of each option on individual school budgets. There were only minor differences between options (b), (c) and (d) on individual school budgets.

Claire White outlined that if option (f) was chosen, there would be no scope to vary the lump sum by the size of the school as the Local Authority was required to provide the same lump sum to all schools. She added that many of the schools that would be disadvantaged by option (f) were already getting an increased budget due to higher numbers of pupils so they would still be gaining, but to a reduced level. Claire White gave the example of Brimpton Primary School, which would be losing a similar amount of funding, no matter which option was considered.

It was proposed by the Heads Funding Group that the centrally retained school budget as set out in Table 2 of this report be agreed and the school formula funding rates for 2016/17 be agreed as set out in options (a) and (f) in paragraph 6.5 and Appendix C of the report.

Graham Spellman commented that schools had been impacted already by the increase of National Insurance to 3.4%, which they might not have been prepared for. Claire White advised that this figure had been built in to the Council’s budget planner tools in the previous financial year. David Ramsden agreed that schools should not be unaware of that change.

David Ramsden advised that he had not been able to attend the Heads Funding Group meeting at which the proposal was put forward. He asked how long the lump sum reduction would be in place. Claire White advised that no in-year changes could be made but the Schools Forum could decide to restore the lump sum when setting the 2017/18 budget.

David Ramsden further commented that many of the savings options for the High Needs Block budget, discussed in the previous item, had the repercussion of requiring schools to pay, or pay more, for services previously received for free. He asked whether the implication of Academies refusing to buy in to the service would be an increased cost to maintained schools. Ian Pearson advised that in principle, the size of the service offered would have to be proportionate to the amount of buy in by schools. However, Ian Pearson speculated that Academies and maintained schools were likely to make the same choices regarding which services to buy in.

David Ramsden sought clarification on why some savings could not be completely achieved in year. Claire White explained that some of the savings options could not be enacted until September 2016.

David Ramsden further asked whether the cuts could be staggered and if there was any scope to borrow money to support the High Needs Block while gradually making reductions to services. Claire White advised that this had already been done in 2015/16 because the Schools Forum had agreed to set an imbalanced budget, with the hope of making savings in-year. She recommended that the Schools Forum seek to set a balanced budget for 2016/17.

Ian Pearson commented that it would be difficult for the Schools Forum to decide which services to continue funding in order to support mainstream schools to accommodate children with High Needs and therefore avoid placing further pressure on the high Needs budget.

Keith Watts expressed the view that Schools Forum had a difficult task as all options could have negative implications.

Ian Pearson reminded the Forum that the government’s national consultation might lead to the introduction of a national formula.

David Ramsden asked whether it were possible to delay a decision regarding a reduction to the lump sum. Ian Pearson advised that a decision had to be made to set the Schools Budget so if a decision was not taken, the funding to address the High Needs overspend would be required to come from the High Needs and Early Years Blocks only.

Jon Hewitt proposed that the centrally retained school budget and the school formula funding rates for 2016/17 as set out in options (a) and (f) in paragraph 6.5 and Appendix C of this report be agreed as per the recommendation of the Heads Funding Group. The proposal was seconded by Anthony Gallagher.

The Chair invited the School Members to vote on the proposal, which was carried unanimously.

RESOLVED that:

·         The centrally retained school budget be agreed as set out in Table 2 of this report.

·         The school formula funding rates for 2016/17 be agreed as set out in options (a) and (f) in paragraph 6.5 and Appendix C of this report be agreed, as per the recommendation of the Heads Funding Group.