Agenda item

Ian Pearson introduced the report (Agenda Item 8), which set out the actual deployment of the Dedicated Schools Grant (DSG) in 2017/18, explained the main variances and proposed the amount to be carried forward to 2018/19.

The report recommended that the Schools’ Forum approve the overall carry forward, and the utilisation of the unspent DSG funds being carried forward from 2017/18 to 2018/19 as set out in section eight of the report. The Heads Funding Group (HFG) had considered the report at its meeting on the 6 June 2018 but had not reached a proposal on how the money should be used and therefore would reconsider the item at its meeting in July 2018. Therefore the item was only for discussion and would be brought back to the Forum in July with proposals, seeking agreement.

Ian Pearson explained that the report set out spend against the various blocks and identified any underspends. A breakdown of how DSG funding had been used could be seen under Appendix A to the report on pages 57 and 58. The situation had improved from what had been forecast and although there were still pressures to be faced going forward, there was an improved position.

Wendy Howells reported that Table 1 on page 50 of the agenda summarised the overall year end position for each DSG block, also compared to the Month Ten forecast, which was used when setting the budget for 2018/19. The final position was an overspend of £13,549. The final budget for 2017/18 was set at an overspend of £844k, so the final outturn was £787k better than the planned overspend and £689k better than the forecast overspend of £702k at Month 10.

The Schools Block had seen a larger underspend than usual and this was set out in Table 2 on page 51.  During 2017/18, five schools had received funding from the maintained schools’ Primary Schools in Financial Difficulty de-delegated fund, leaving an unspent budget of £259,099.

The Early Years Block was in a better than expected position. This was partially due to take up of the additional 15 hours (particularly in the autumn term and to a lesser extent the spring term) being lower than expected and what was budgeted for. This was the main reason why total payments to providers in 2017/18 were £481k below budget. Also the final level of funding for early years in 2017/18 was based on the January 2018 census. As the take up of the additional hours was higher in the spring term than in the autumn term, the estimated final level of funding for the Early Years Block was only £364k below the budgeted level, giving an estimated deficit for the Block at the end of 2017/18 of £118k.

The High Needs Block had anticipated an overspend of £490k and achieved a £309k overspend at year-end, an £181k improvement with the top up funding for Further Education being the largest contributor to the improved position. This was largely because of an overestimation of Newbury College costs in 2017/18. The main overspend in the High Needs Block was the PRU top ups and it was noted the PRU ended the year with a significant balance.

Wendy Howells referred back to page 51, which set out options for how unspent funds could be utilised. The unspent primary schools in financial difficulty funding (£259,099) could be added to the funding available in 2018/19 to help meet restructuring costs for schools in deficit, which would provide a total budget of £379,120. Alternatively for this and other de-delegated services un-utilised funding could be carried forward to the following funding period as with any other centrally retained budget. There was an option to use the underspend specifically (as one off expenditure) in the current years’ budget for each specific service area, or be used to reduce the cost of the de-delegated service to schools in the following year. Wendy Howells stated that this part was still undecided and would need to go back to the HFG so that recommendations could be formed.

A decision would also be required regarding school improvement funding. School improvement was funded via a new school improvement grant and therefore the under spend of £73,410 relating to school improvement could be used to either fund additional school improvement services or increase the budget of any other de-delegated services. Alternatively it could be carried forward to the next funding period to reduce the cost of de-delegations in 2019/20.

Wendy Howells highlighted that the table on page 57 gave the 2017/18 budget monitoring year end position.

Reverend Mark Bennett noted that the Schools in Financial Difficulty Fund seemed to be accumulating year on year. Wendy Howells confirmed that there had already been three to four bid applications received from schools for the fund since the beginning of the financial year and some of these were for substantial sums of money. Bids to the fund would go the HFG and Schools’ Forum for consideration in July 2018.

Ian Pearson stated that there were some schools with a deficit balance and some with a surplus. Part of the deficit recovery work would involve looking at the cause of these differences. The Schools in Financial Difficulty Fund had an agreed expanded use and could be used for deficit recovery work and helping to meet redundancy costs. Reverend Mark Bennett noted that although it was uncertain how many schools would apply for funding, it seemed to be growing year on year. He asked how the money could be used strategically. Ian Pearson stated that in due course the Schools’ Forum might wish to cap the budget. A decision on this would be required.

Councillor Lynne Doherty noted that Table 1 under paragraph 4.1 set out the year end position for each DSG Block and felt that it would be useful to have trend data so that comparisons could be made to the previous year. There were often variances between month 10 and year-end and Councillor Doherty felt it would useful to know if this was occurring annually. Wendy Howells felt that for the Schools’ Block, the underspend in de-delegated services could possibly have been foreseen. The Early Years Block on the other hand was more difficult to predict.

Councillor Doherty commented that the information would hopefully show where focus was required on modelling work going forward. Wendy Howells acknowledged the point however, did not feel that all the issues could be attributed to modelling.

Ian Pearson highlighted that part of the report considered how unspent funding could be allocated going forward. He stated that the Forum had often discussed how there was not enough funding available to meet the needs of pupils falling within the High Needs Block. A change in the funding formula was unlikely and therefore an ‘invest to save’ approach could be considered.

As the 2018/19 High Needs Block had been set with a £565k overspend, but the actual position was £256k, it was proposed that £156k be used to reduce the deficit in 2018/19 and to utilise £100k in invest to save proposals, to lower the cost of the High Needs Block and in line with the SEND Strategy. It was highlighted that the money would be a one off sum.

Ian Pearson added that he needed to flag an issue regarding costs associated with resource units. Some schools provided an area wide resource, however the funding allocated to the resource units through the formula did not cover all the costs incurred by these services The system did not seem to be working as planned as schools hosting a resource unit should be able to do so without incurring any net costs.

Keith Watts asked how long the issue with the resource centres had been occurring. Ian Pearson stated that members of the Forum might recall that the funding formula for resources had been reworked recently however, it did not seem to have worked and would need re-visiting.

Patrick Mitchell agreed that the situation with the resource centres seemed unfair however, there was a similar situation when a school accepted a child with an EHC Plan. The school was often not the catchment school but could offer better support for the needs of the child. Ian Pearson reported that they were talking about strategically formed  resource units. If a child with significant needs required an EHC plan, then funding would be attached to this.

Jonathon Chishick asked what level of shortfall schools with resource centres were facing. Ian Pearson stated that he only had anecdotal information on this however, Trinity had stated that it was having to subsidise funding provided by West Berkshire Council by circa £20k. 

Jonathan Chishick referred to the £100k for spend to save projects and asked if this was a finalised figure and what the process would be for agreeing projects. Ian Pearson stated that officers would be expected to provide a business case for each proposal. All proposals could for example accumulate to £200k however, the Schools’ Forum would then need to agree which projects should be adopted.

RESOLVED that in due course a decision needs to be taken on how to effectively manage the Schools in Financial Difficulty Fund.