Agenda item

The Forum considered a report (Agenda Item 7) which set out the changes known so far to the Dedicated Schools Grant (DSG) in 2017/18.

Claire White explained that the proposal for changes to schools funding were now not going ahead in 2017/18, although there would be changes to the funding of the Schools Block. A second stage consultation was expected in the autumn with proposals for 2018/19. A consultation on changes to early years funding from 2017/18 closed on 22 September 2016 and significant changes were proposed. A second stage consultation on high needs funding was still due by the end of the year, however the timetable had been delayed and no changes were expected until 2018/19.

The Department for Education (DfE) carried out an exercise in the spring to re-base the funding blocks. Changes had been made to the base line funding for each block in line with how the 2016/17 DSG allocation was being spent. This had moved funding from the Schools Block to the High Needs Block (HNB) following the Forum’s decision to fund high needs pressures in 2016/17 from the Schools Block.

The Schools Block per pupil rate for 2017/18 had been confirmed as £4,348.43 compared to £4,368.03 in 2016/17. Assuming the same number of pupils in 2017/18, this was a reduction of £434k. The HNB had received an additional £1.021m, so in effect West Berkshire had overall gained funding from this exercise.

Claire White continued that the surprise change was the moving of the Education Services Grant (ESG) into the DSG from 2017/18. Although Claire pointed out that the responses to the relevant questions in the consultation to support this had not yet been published.

The ESG currently received by local authorities was made up of two elements: General Funding Rate and Retained Duties. The General Funding Rate was to cover statutory duties carried out for maintained schools which included school improvement, finance, HR and health and safety. Academies received this funding direct. In 2016/17, the Local Authority (LA) funding rate was £77 for mainstream pupils (£327.25 for special schools, £288.75 for PRUs) and West Berkshire’s grant totalled £1,472,345. Adjustments were made during the year as and when schools converted to Academies. However, from September 2017, the local authority would no longer receive the general funding rate. Academies would have their equivalent grant removed from this date, but would receive protection until 2020.

School funding regulations would be amended to allow LAs to meet the cost of these duties from the Schools Block DSG (although there would be no additional funding for the general funding duties). This would be a top slice from maintained school’s individual school budgets at a single rate per pupil, and would put maintained schools onto an equivalent charging arrangement as academies. The top slice would need to be agreed by the maintained school members of the Forum.

In terms of Retained Duties, from April 2017 this element would be added to the DSG (at £15 per pupil) and the cost of the eligible services would be met from the Schools Block DSG. The impact of this was expected to be minimal.

Reverend Mark Bennett queried whether there would be scope for the Forum to determine how some elements of the DSG could be spent. Claire White confirmed this would be the case for some non-statutory elements.

Graham Spellman was concerned that general funding would no longer be received by local authorities, in particular funding identified for School Improvement work. Budget reductions limited efforts to improve schools. Claire White advised that schools might have the option to buy back this service and a more detailed report would be provided to the Forum in December 2016 when it was hoped that further detail would be provided by Government.

Reverend Mary Harwood commented that these changes would present further difficulties for the viability of small schools. Claire White agreed that while the funding allocation for small schools would not be changed, additional pressures would be unfunded.

Early Years Block - Funding for three and four year olds was currently based on a historical rate per child (counted in the January census) and was different for every LA. The recent consultation proposed a new formula re-calculating the rate for every LA. Claire White pointed out that the revised calculation would leave West Berkshire’s rate below the average when it should be well above when considering that West Berkshire was a high cost region.

West Berkshire Council’s response to the consultation had highlighted this concern and it was hoped that the rate would be increased.

Although the rate of funding for West Berkshire for three and four year olds was proposed to increase to £4.70 from £4.13, this additional funding would only serve to help plug the current funding gap and it might prove necessary to cut funding for providers. This would be covered in further detail as part of the next agenda item.

High Needs Block - Funding arrangements for 2017/18 stated that there would be no reduction to the 2017/18 allocation for the HNB. No decision had been made on how any additional funding would be allocated to local authorities and this allocation (if any) would be notified in December 2016. Savings would be required in this block if no additional funding was allocated.

Appendix A to the report modelled a year on year comparison using the current information about the DSG allocation for 2017/18.

The Schools Block was modelled on October 2015 pupil numbers, and on that basis there would be enough funding to maintain current formula funding rates and the current centrally retained budget. However, this assumed that the additional funding for ESG retained duties would cover the actual cost and that the formula funding for the new primary school proposed to open in September 2017 could be met largely from the balance held in the growth fund.

An overspend was forecast in the early years block but this would need to be met by the grant. The early years block was also overspending in the current financial year.

As mentioned above, it was assumed that the HNB would be unchanged, but an increase was hoped for.

It was also noted that the review of Pupil Referral Units would hopefully achieve savings and these had yet to be factored into these discussions.

Reverend Bennett queried contingency plans if budgets remained inadequate. Claire White advised that a HNB Task Group had been formed and David Ramsden advised that Terms of Reference had been agreed for this work. Paul Dick asked that the minutes of these meetings be shared with the Forum. Bruce Steiner commented that this work was not straight forward when considering current levels of uncertainty.

Brian Jenkins stated his view that the sustainability of early years providers was a matter of considerable concern in light of current funding expectations.

RESOLVED that the report be noted.