Agenda item

Melanie Ellis introduced the report (Agenda Item 6), which set out the results of the consultation with all schools on the proposed primary and secondary school funding formula for 2024/25 and made a recommendation to the Schools’ Forum. </AI5>

Melanie Ellis went through the consultation responses to each of the questions as set out in section five of the report.

Question 1 – mirroring the National Funding Formula (NFF).

All schools that had responded had supported mirroring the NFF as closely as possible.

Question 2 – Applying the sparsity factor.

Of the schools that had responded to the consultation, 17 had supported applying the minimum sparsity factor and seven had supported the full sparsity factor.

Melanie Ellis reported that the Heads’ Funding Group (HFG) had wished for the area to be fully discussed by the Schools’ Forum because there had only been 24 responses to the consultation from over 70 schools.

Trevor Keable asked for an explanation on the sparsity factor and the consequence of each option for schools. Melanie Ellis reported that the NFF gave a set amount of funding for sparse schools and it related to the distance to the next nearest school. Over the last couple of years, rather than following the NFF, the Schools’ Forum had opted for the minimum sparsity factor to be applied. This meant that a sparse school would receive a lower amount of funding and funding that remained in the pot would be distributed across other non-sparse schools.

Lesley Roberts was of the view that the funding was available to support sparse schools and therefore these schools should receive it. Lesley Roberts reported that she had a conflict of interest as her school was one of the sparse schools and would therefore benefit if the full amount was awarded. It was felt that with funding getting tighter for schools, the schools that the funding was designed for needed the support.

Gemma Piper reported that when the matter of sparsity had been discussed at the HFG, she had asked how many of the schools that had responded were small schools and if this was a true representation of the number of small schools versus the number of large schools, giving a balanced view. Gemma Piper commented that it was known that the funding was critical to small schools and it had been queried previously what the negative impact would be on these schools if the funding was not available. Gemma Piper was mindful that the consultation response showed a clear split in favour of the minimum sparsity factor however, it was queried if the small schools were truly represented in terms of the impact. Gemma Piper acknowledged it was a difficult measure however, commented that she would be in support of full funding for sparsity.

Reverend Mark Bennet stated that as the Diocese representative he represented quite a large number of small schools. If a change was going to be made that would have a negative impact on those schools, he felt further information on the strategic background was required, to set out how the impact would be dealt with.

The Vice Chair asked for clarification regarding the impact on schools. Melanie Ellis reported that if the sparsity factor was applied in full then sparse schools would benefit. Reverend Bennet stated that the issue was that some smaller schools would not qualify as sparse schools. Melanie Ellis clarified that all small schools would qualify however, they would receive a lower amount. The allocation would remain the same however, a lower value would be applied in total to sparsity.

Paul Davey queried what proportion of schools in the West Berkshire area would benefit from the sparsity funding.  Melanie Ellis believed it was about 10 or 12 schools but would double check this point.

(Later in the discussion Melanie Ellis confirmed that 22 schools received some sparsity funding in West Berkshire, of which 10 received more than £8k. Of the 24 schools that had responded to the consultation only 6 were sparse schools.)

Question 3 – any shortfall or surplus in funding was addressed by adjusting the AWPU values.

Melanie Ellis confirmed that schools that had responded to the survey were in support of this.

Question 4 – what percentage of transfer of funding would be supported from the Schools’ Block to the High Needs Block.

Melanie Ellis reported that 22 schools had supported a zero percent transfer and two schools had supported a 0.25% transfer.

Chris Prosser read out the following statement on behalf of Richard Hawthorne, which was linked to the disapplication request and also reflected the views of many other Head Teachers. Chris Prosser stated that he agreed with the issues set out:

“I have two issues with this decision. Firstly, this was not discussed during the recent HFG meeting on 21^st November 2023 and secondly, that the proposal from West Berkshire flies in the face of a very clear outcome from the consultation, which saw the vast majority (22 schools) of respondents recommend that 0% was transferred. Given that the disapplication was made by the DfE deadline of the 17^th November 2023 (before the HFG meeting), I find it incredible that this was not even mentioned by anyone from West Berkshire, let alone opened up for discussion by the floor. Furthermore, it is the only item from the consultation where there seems to be a deviation from the recommendations of the consultation. Surely knowing this would have alerted officers to the potential controversial nature of the disapplication and therefore warranted further discussion at HFG.”

Chris Prosser added that in conclusion to the comments from Richard Hawthorne, he would have liked there to be a discussion and an explanation of the rationale as to why the disapplication had been submitted at the point it had been.  

In response to this, Melanie Ellis reported that the matter had been discussed at the HFG on 21^st November 2023 under the item on the consultation results. It had also been mentioned at the HFG in October 2023, when it was being considered by the Local Authority (LA). At the November meeting, Melanie Ellis had made the HFG aware that the disapplication had been made by the LA and that it had needed to be made prior to the Schools’ Forum meeting due to the deadline set by the Department for Education (DfE), which was the 17^th November 2023. Melanie Ellis reported that she had advised the HFG that the DfE would require further information before a decision could be made including the minutes of the current meeting. Melanie Ellis had advised the HFG that she would set out the reasons for the disapplication in the report submitted for the Schools’ Forum and this could be found set out at the bottom of page 15 of the agenda pack. Melanie Ellis believed that the Vice Chair had asked a question at the HFG regarding whether the minutes from the Schools’ Forum on 4^th December would be submitted to the DfE. Melanie Ellis confirmed therefore that although a full discussion had not taken place, the matter had been discussed and those in attendance had been given the opportunity to raise any questions.

David Ramsden felt that Chris Prosser had summarised the views of several Headteachers. There was an issue of credibility when it had been indicated through the consultation that a zero percent transfer was supported and subsequently a decision for something different had been made. David Ramsden stated that he would be interested to know the logic for the disapplication. David Ramsden stated that whilst the Delivering Better Value Programme (DBVP) was taking place and they were waiting for the advice from this project on how to reduce the deficit, he did not feel any funding should be transferred.

AnnMarie Dodds reported that there was largely a sequencing issue, in that the DfE’s timescales did not fit with the Schools’ Forum’s timescales. Ideally, detailed conversations would have taken place at the HFG and Schools’ Forum prior to a decision being made about the disapplication request however, due to timescale differences this had not been possible. Ultimately the decision sat with the LA to submit a disapplication request. AnnMarie Dodds stated that this essentially placed a marker in the sand with the DfE and did not pre-empt any decision that would be made by the Schools’ Forum. This marker could not however be placed post the Schools’ Forum due to the DfE’s deadlines. By submitting the disapplication request, the LA was flagging with the DfE that it might want to have a further conversation about a disapplication request. The DfE would take into account all minutes from Schools’ Forum meetings where the matter was discussed. AnnMarie Dodds reassured the Forum that it was not about the LA trying to do something that was not legitimate and that had not been discussed with headteachers.

AnnMarie Dodds referred to David Ramsden’s point about the DBVP. AnnMarie Dodds had met with secondary headteachers the week previously and it was clear that consequences to the LA from the DBVP were significant and had not been as well communicated or understood as they could have been. The DBVP was not a pump priming programme but was a transformation programme. This transformation had to deliver a turnaround in spending on Special Education Needs and Disabilities (SEND) so that the HNB Budget could be balanced. Currently there could be overspend in the Dedicated Schools Grant (DSG) without consequence to the LA. However, come March 2026 any overspend in the DSG would have to be covered by the LA and the corporate reserve would need to be great enough to cover the overspend on the DSG. The overspend in the DSG was greater than the revenue reserve of the LA and therefore without any additional spending over the next two years the LA would be bankrupt. The consequence of bankruptcy to the LA was that commissioners would take over the running of the LA. This would mean that the LA would not have authority in any decision making around how money was spent.

AnnMarie Dodds acknowledged that the position faced in the DSG was being faced by many other LAs. However, to fail to address the current deficit position could result in the LA being bankrupt by 2026. This could result in non-statutory services not being delivered. The DBVP was an opportunity to look at how money was being spent on the DSG. The £1million associated with this was not aimed at plugging the gap but rather at transformation. The LA was currently in the process of forming proposals about services that would be considered at the LAs Budget Board with the aim of balancing the LAs budget. If the overspend in the DSG was applied to the LA currently, it would not be able to set a balanced budget and would not be able to do so in two years’ time if the issue was not addressed.

AnnMarie Dodds further explained that part of the question that would be asked by the DfE on the DSG was regarding where block transfers had been carried out and there would be an expectation from the DfE for the LA to articulate conversations on this. The LA could legitimately request a 0.5 percent transfer from the Schools’ Block into the HNB. Given that West Berkshire was part of the DBVP there was an expectation that this measure would be taken. A 0.5 percent transfer would equate to just over £600k and although this was minimal against the deficit in the DSG of around £9 million, it was significant in signalling the intent to take measures to address the overspend position. The DBVP submission was due to be submitted to the DfE by the 14^th December 2023. A multimillion pound deficit needed to be recovered over the next two years against the HNB to bring the DSG into balance. AnnMarie Dodds stressed that the LA was not trying to do something in a covert way but had needed to meet the deadlines of the DfE to enable further conversations and consideration of the matter to take place.

Councillor Iain Cottingham reiterated and endorsed the points raised by AnnMarie Dodds. The LA was facing significant financial deficit over the next two years. At the end of quarter two the LA had a deficit of £3.3 million against general reserves of £7.2 million. Councillor Cottingham stated that £14m needed to be found next year and ideas were being discussed around efficiencies. The main areas of pressure were children’s and adult services. Councillor Cottingham stated that without the half a percent transfer the LA would be facing bankruptcy in 2026 resulting in the loss of control to commissioners.

Gemma Piper stated that she understood the sequencing issue and thanked AnnMarie Dodds for the explanation. A situation was being faced where there was a legacy of information around how money had been spent, including on the invest to save proposals, and a lack of clarity over time on what savings would be made. In the past, this had led to schools and trusts not wishing to see any money transferred. Gemma Piper was frustrated that schools had not been informed about the financial situation sooner. There was a host of levers that might be used, given the deficit faced. Gemma Piper stated that the block transfer was just one of the many levers that could be used, and other levers involved non-statutory services and invest to save packages that she highlighted did not have a direct financial saving allocated. Gemma Piper stressed that it was important to note that the funding transfer was not the only lever and understood why there was a clear mandate from school leaders to request no transfer be carried out. It was problem that would not be solved by this one action alone.

Reverend Bennet understood what had been stated from the LA’s point of view however, it also needed to be considered from schools’ point of view. If it was agreed that block transfer would move one set of money from one provision to another, it should be noted that mainstream schools were facing increasing demands to cater for children with additional needs as set out in the consultation responses. The LA was facing challenges in meeting the social care burden for children and schools were on the front line of this. Reverend Bennet did not feel that a 0.5 percent transfer would make a big enough difference to solve the LA’s solvency issues. Moving money out of the school block would put schools under additional pressure.

Edwin Towill thanked AnnMarie Dodds for her explanation, which he felt was very clear and articulate. He sympathised with the situation faced by the LA but the average uplift for schools the following year was due to be 1.9 percent however, if the transfer went ahead this would be reduced to 1.4 percent. Edwin Towill stated that it would not be possible to run his school on a 1.4 percent uplift. He would have to cut services, and this would in turn increase the SEN need.

Edwin Towill further stated he had viewed the documentation for the meeting carefully and referred to paragraph two on page 16 of the pack. He highlighted that it stated that the disapplication had been made to transfer funding whilst progress was being made on reducing the deficit. Edwin Towill explained that the Draft SEND strategy 2023-28 was then referenced as seeking to reduce the HNB expenditure. Edwin Towill stated that he did not have confidence in the draft strategy in reducing deficit and therefore if a 0.5 percent transfer was used as a stop gap to enable to strategy to work, this made him very nervous. 

David Ramsden commented that in previous iterations the aim of the SEND Strategy had been to increase provision in schools due to the cost of expensive out of county placements. David Ramsden agreed that AnnMarie Dodds’ explanation of the problem had been excellent however, it signified that there had been a communications issue. He apologised that he had not attended the last HFG meeting however, felt that a clear in depth discussion should have taken place at this group. This would have helped Headteachers feel clearer about the situation when it felt slightly underhand. David Ramsden also felt that it was not helpful to imply that if the 0.5 percent transfer did not go ahead this would bankrupt the Council. He did not agree that this was the case.

David Ramsden highlighted the frustration by headteachers due to the communication issues and also because they had been in the situation before. The deficit in the HNB had been discussed for many years and some headteachers had dedicated a great deal of time to looking at cutting services in a careful prioritised way. If this had taken place, then the deficit might not be as large as it currently was. David Ramsden sympathised with the position of the LA and he stated that he did not wish to see control lost in the way described. He however, felt that the communications and legacy of the situation was extremely concerning.

AnnMarie Dodds highlighted that the SEND Strategy was in draft form because it had not been accepted. AnnMarie Dodds agreed that the SEND Strategy was not going to deliver the level of savings required. In terms of a long term financial strategy, it was felt that the DBVP would dictate the areas of business that needed to be looked at in terms of reducing the spend. AnnMarie Dodds accepted the points raised regarding communication issues and appreciated there had been a lack of clarity. AnnMarie Dodds stated that her early learning from her time so far at West Berkshire was to be open, honest and upfront in communicating the nature and scale of the problem. Once proposals resulting from the DBVP had been formed by Officers, it was important that these were shared with Headteachers to give an early indication of what was in the programme. AnnMarie Dodds agreed that the 0.5 percent of funding would not address the issue being faced and was less than 10 percent of the current deficit however, it was a signal of intent to the DfE about doing things differently.

Lesley Roberts stated her understanding when joining the Schools’ Forum that the meeting was a partnership whereas it felt like schools were being ‘done to’, even though many headteachers had shared the difficulties and pressures they were under. It was important to invest in schools in West Berkshire. The amount of money being debated was small in relation to the deficit, however, was phenomenal to schools. Lesley Roberts commented that this could push schools towards academisation and felt that it was important that decisions were taken in partnership and not in a ‘done to’ approach.

Jacquie Davies queried where the matter would fit in with the LA’s capital assets portfolio and if this could be used to help solve the revenue problem. Councillor Cottingham commented that there were only certain things that could be done in terms of selling assets and transferring capital into revenue. Areas had to qualify for the transformation programme, and this was quite narrow in its scope. Any spend had to have a long term benefit for the residents of West Berkshire. Councillor Cottingham further reported that the LA had come under new Administration from May 2023 and the past could not be changed. The same Government had also been in power for the last 13 years and one of the things Councillor Cottingham was hearing on a re-occurring basis was regarding the lack of investment from central government into education and services. Councillor Cottingham stated that he fully understood the push back from schools regarding losing the half a percent. This equated to about £10k per school and likely equivalent to two TA posts, which he understood was significant to budgets. Councillor Cottingham agreed that a transfer would be a statement of intent to the DfE that effort was being made to reduce the deficit of £9m and without this the LA would be bankrupt. A plan of action to reduce the deficit was required.

David Ramsden stated that he had not consulted headteacher colleagues on his following suggestion however, queried if a 0.25 percent transfer would be a more palatable compromise. He understood what had been said about being seen to put money aside and felt it could return the discussion to the partnership approach referred to, which was very important at the Schools’ Forum.

The Vice Chair noted that the view in the consultation regarding the transfer was very clear however, the view from the LA was also very clear.

Gemma Piper asked for clarification from AnnMarie Dodds regarding the disapplication procedure and if what was decided by the Forum would make any difference to this. AnnMarie Dodds stated that the DfE would ultimately make the decision. AnnMarie Dodds felt it was possible that if the Forum were to agree the 0.25 percent, this would signal an intent to work together in the new DBVP challenge. It was clarified that the reason 0.5 percent had been submitted to the DfE was because this was the maximum that could be applied for without needing approval. AnnMarie Dodds felt it was likely that if 0.25 percent was approved by the Forum, then the situation could be concluded. It would signal a different intent rather than one of confrontation, which the LA was keen to avoid given the challenges faced over the next two years. 

Paul Davey echoed comments regarding the helpfulness of the explanation. He queried where the rest of the £9m would come from in the next two years. It did not feel like there was a solution at scale that was going to reach a resolution. Paul Davey referred to the point made by Councillor Cottingham regarding the loss of £10k or two TAs and stated that this would close the school that he was a governor at. He queried how many schools would have to close as a result of the matter being faced, and secondly queried what else would have to be agreed financially. AnnMarie Dodds reported that the DBVP would have multiple lines of approach to the situation. It was not about closing schools as there was a certainty about the number of pupils in West Berkshire that were funded through the DSG. The challenge was about the HNB spend and the need to reduce the spend in this area and reach a balanced position. AnnMarie Dodds commented that it looked unlikely that change in Government would change the situation due to the main approach being one of inclusion. This would place more pressure on keeping children in maintained schools. There was no indication that there was more money coming into the system and it was a challenge being faced nationally. AnnMarie Dodds reiterated that it was not about closing schools but about bringing the HNB into balance.

Councillor Heather Codling noted that there was a will to want to work together. It was felt that such conversations needed to happen more often with further ideas on ways to work together, to help keep children in mainstream schools and within their local community.

Lesley Roberts queried if the HNB Budget covered ages 0 – 25 and what proportion was taken from other areas. It was confirmed that the HNB covered ages to 0 – 25. AnnMarie Dodds reported that the funding for Children in Care at university that were known to the LA came from the social care budget and not the HNB Budget. The HNB Budget was money that was spent on SEND from ages zero into further education but not beyond into university.

Gemma Piper commented on the legacy of focusing on the deficit and subsequently not taking the action necessary over the years. Gemma Piper noted the point from Councillor Codling regarding keeping children in the right place and in mainstream schools, however she stressed caution needed to be taken when suggesting children were better off in their local setting than having to travel further to a special setting. The reality was that there were such high needs that the specialist provision that those children required, regardless of where it was, was what they must receive. Gemma Piper stressed that they needed to be really careful about how such provision was provided to ensure it was sustainable both financially and educationally.

The Vice Chair suggested that given the complexity of the discussion it would be advisable to vote on a proposal at the current stage. Having listened to other members of the Forum, it was proposed and seconded that 0.25 percent was transferred from the Schools’ Block to the HNB, whilst noting that this was contrary to the view of the majority of schools that had responded to the consultation. At the vote with all school members the motion was carried.

It was agreed that votes on other recommendations set out in the report would take place at the end of the discussion.

Question 5 – supporting a transfer to support any of the other funding blocks.

Melanie Ellis confirmed that there was no support for anything other than high needs.

Question 6 – should there be a falling rolls fund.

Melanie Ellis confirmed that 12 of the schools that had responded had not supported the fund and seven had supported it. The HFG had recommended this be discussed in full at the Forum.

The Vice Chair noted that there were no comments from members of the Forum and therefore suggested the recommendation on this should reflect the majority of the responses from schools in not supporting the fund.

Question 7 – setting the criteria for other funds outside of the schools formula

Melanie Ellis reported that 100 percent of those schools that had responded had agreed with the criteria set for accessing additional funds.

Question 8 – Delegations

Melanie Ellis reported that this would be discussed as part of item eight later on the agenda.

Question 9 – Scheme for Financing Schools containing a clawback

Melanie Ellis reported that this area had been discussed at the recent HFG however, there had been a desire to better understand the implications. A further meeting of the HFG was due to take place on 5^th December 2023 to discuss the matter and it would be brought back to a special Schools’ Forum meeting later in December.

Question 10 – Other changes to the Scheme for Financing Schools

Melanie Ellis reported that all schools that had responded supported the other changes to the SFS.

Keith Harvey invited the Schools’ Forum to vote on each of the following recommendations set out in the report under section 2.1. It was noted that a vote had already taken place for recommendation 2.1 (d) concerning a transfer of funding. Recommendation 2.1 (g) on the de-delegations would be considered later on the agenda and recommendation 2.1 (h) regarding a claw back would be considered at a later meeting of the Schools’ Forum.

2.1 (a) To mirror the Department for Education’s 2024/25 National Funding Formula (NFF) to calculate the funding allocations. It was proposed and seconded that the recommendation should be approved. At the vote with all school representatives the motion was carried.

2.1 (b) To address any surplus or shortfall in funding by adjusting the AWPU values. It was proposed and seconded that the recommendation should be approved.  At the vote with all school representatives the motion was carried.

2.1 (c) Based on the discussion, it was proposed that the recommendation was to go for the full NFF sparsity factor rather than the minimum. It was proposed and seconded that the recommendation should be approved. At the vote with all school representatives the motion was carried.

2.1 (e) Based on the discussion and consultation results it was proposed to not reinstate the falling rolls fund. It was proposed and seconded that the recommendation should be approved.  At the vote with all school representatives the motion was carried.

2.1 (f) To approve the criteria to be used to allocate additional funds. It was proposed and seconded that the recommendation should be approved. At the vote with all Forum members the motion was carried.

2.1 (i) To approve the other changes to the 2023/24 Scheme for Financing Schools. It was proposed and seconded that the recommendation should be approved.  At the vote with all maintained school representatives the motion was carried.

RESOLVED that:

• In considering recommendation 2.1 (d), it was agreed by the Schools’ Forum that 0.25 percent be transferred from the Schools’ Block to the HNB.
• Recommendations 2.1 (a), (b), (c), (e), (f) and (i) were approved as set out above.