High Needs Block Budget Proposals 2019/20 (Jane Seymour)
Jane Seymour introduced the report (Agenda Item 8) which set out the current financial position of the High Needs Block Budget (HNBB) for 2018/19 and the position known so far for 2019/20, including the likely shortfall.
Jane Seymour reported that as set out on page 49 of the report, the HNBB continued to be under great pressure. Savings of £219k were implemented in 2017/18 and a further £306k in 2018/19. However, despite these savings there would still be an overspend of just under £500k in the current year due to increasing needs and pressure upon the HNB.
Jane Seymour reported it was announced in December 2018 by the Education Secretary that additional funding would be available for high needs and West Berkshire would receive an additional sum of £381k in 2019/20. This had improved the situation slightly for 2019/20 however, there was still a forecast shortfall of £1.8m.
There was increasing pressure on Place Funding Budgets. The budget for this area was £5.8m however the estimated spend was over £6m and this was largely due to the fact that the Local Authority now had to cover the cost of planned places at Newbury College. Top Up Funding was another area of pressure that was facing a shortfall of just under £700k.
Jane Seymour drew attention to page 55 of the report, which showed the pressure being faced by the PRU Budget due to increased numbers of children with Education Health and Care Plans (EHCPs). Fewer schools had also been placing students at iCollege due to the charging system that was in place, which had placed further pressure on the budget.
Budgets for other statutory services were detailed under section four of the report and it could be seen from the figures that spend was increasing. The Sensory Impairment budget was under pressure because of an increase in the number of children with severe hearing and visual impairments requiring support.
Jane Seymour drew attention to the non-statutory services on page 59 of the agenda. The latest forecast for the budgets for these services was that most should be balanced apart from the Learning and Literacy (LAL) service. As a result of charging being introduced, referrals to the service had reduced for the first time. Jane Seymour reported that also included within the report was detail on the impact of each of the services.
Jane Seymour reported that a five year Special Educational Needs (SEN) Strategy had been agreed and was being rolled out. The aim of the strategy was to decrease spending and increase capacity in mainstream schools. It was hoped that local provision would be increased by September 2020.
A discussion had taken place at the Heads Funding Group (HFG) regarding a range of savings proposals, which were included within Appendix B to the report. The HFG had recommended that the only savings that should be taken from the HNBB in 2019/20 were those which would not have a negative impact on children with SEND and on schools. This had included:
1) Bringing the Home Tuition Service in house, which would deliver and estimated saving of £23k, and;
2) Reducing the charge for PRU places from 80% of the cost of 50%. This would aim to increase take up of PRU places and achieve a saving by reducing HNB spend on PRU Top Ups.
Ian Pearson added that when the Schools’ Forum had been through the cycle of making savings within the HNB previously, an initial discussion would take place at the HFG. The HFG would recommend areas that savings could be delivered on and then the Schools’ Forum would make a decision on which savings options required further investigation. A more detailed proposal would then be formed by Officers and brought back to the HFG and Schools’ Forum for final decision. However, at the last meeting of the HGF, headteachers had found it particularly difficult to agree on further savings to the HNB that would not be detrimental to meeting the needs of pupils.
Ian Pearson explained that there were two competing pressures. Firstly there was already pressure being faced by schools and secondly, further HNB savings were likely to be counterproductive resulting in additional costs in future years.
Keith Harvey reported that he had carried out his own analysis of the pressure on the HNB over time, which was detailed within Appendix D to the report. Keith Harvey reported that issues within the high needs budget had ranged across a number of years and in light of this he had looked at the budget for 2015/16 in comparison to the current budget. The allocation from the Government in this time had only increased by 2.3% however inflation had risen by almost 9%. In this time the budget for the PRU in West Berkshire has decreased from £3.6m to £1.8m in 2018/19. The biggest apparent pressure was top up funding, which was 40% higher in 2018/19 than in 2015/16.
Keith Harvey explained that he had drawn his own conclusions that had not been universally agreed on by the HFG. In his opinion cutting non statutory provision led to increase spending on Top Up Funding. Further savings to non-statutory services could also lead to increased numbers of children requiring EHCPs. Keith Harvey felt that in his view cuts had been taken far enough. He was aware that other local authorities were facing similar pressures and it was not a local issue.
Ian Pearson suggested that the Schools’ Forum take a view on whether to agree the recommendations from the HFG on page 66 of the report. This would however not solve the problem and in Ian Pearson’s view, there were three options:
1) The Schools’ Forum could take a view that no further savings should be taken in 2019/20 beyond the recommendations of the HFG.
2) The Schools’ Forum could look in more detail at the savings options and request that Officers bring back further detail on selected options to the next meeting in March 2019.
3) The Schools’ Forum could ask Officers to carry out further work on saving options to try and deliver an agreed figure. This would not necessarily mean the savings would be agreed and implemented but would place the Forum in a better position to make a decision on savings at the next meeting in March 2019 if required.
Keith Harvey asked if all the savings options were agreed, if the budget would be brought into balance. Ian Pearson stated that it would not be possible to balance the budget within the required timescales, even if all the saving options were taken. The Department for Education (DfE) were aware of the issue and Officers would be providing them with a report on the Local Authority’s position in summer 2019, which would demonstrate the size of the problem. Identifying savings would show a willingness to tackle the problem. Councillor Lynne Doherty reported that the pressure was growing and a letter was being formed to continue efforts to lobby Members of Parliament. There was soon to be a Spending Review and it was hoped that as part of this it would be recognised that funding assigned to High Needs was insufficient.
Patrick Mitchell stated that there had been a long discussion at the HFG and it was concluded that any further savings would have a detrimental effect on children. A transfer of funding from the main Schools Block to the High Needs Block had been viewed as unpalatable and therefore the decision had been taken not to pursue this option. By continuing to accumulate a deficit it was sending the message that funding for High Needs services was not enough.
Hillary Latimer concurred and stated that to reduce the deficit further would send the message that schools could manage. Children would however, not be receiving the support that they required.
Jonathon Chishick asked what the implications would be of not addressing the shortfall. Ian Pearson confirmed that at this stage any deficit would be carried forward. Patrick Mitchell asked what would happen if the whole DSG pot for West Berkshire went into deficit. Melanie Ellis reported that there was little information on this situation currently. Ian Pearson felt that the DfE would need to review their rules. Local authorities had to submit recovery plans in the summer period of 2019 and a deficit would be shown. It was likely that this would also be the case of other local authorities. The DfE would then need to decide on what action to take, which could potentially include imposing cuts.
Graham Spellman concurred that cutting expenditure further was counterproductive and would not help the overall shortfall. A political push back was required. Ian Pearson added that positively the deficit had reduced from £2.6m to £1.8m.
The Chairman asked the Schools’ Forum to reflect on the recommendations put forward by the HFG. Antony Gallagher proposed that the Schools’ Forum agree the savings set out on page 66 of the agenda and this was seconded by Keith Harvey. At the vote the motion was carried. It was also agreed by the Schools’ Forum that no further work should take place to identify further saving options.
RESOLVED that the Schools’ Forum agreed the HFG recommendation’s as follows and that no further work should be undertaken by Officers to identify further options for savings in the HNB:
1) To bring the Home Tuition Service in house, which would deliver and estimated saving of £23k, and;
2) Reduce the charge for PRU places from 80% of the cost of 50%. This would aim to increase take up of PRU places and achieve a saving by reducing HNB spend on PRU Top Ups.