Schools ForumSchool Funding

and Finance

December 2014

Contents• Financial Context

– Corporate– Children’s Services

• Children’s Services– Statutory Responsibilities– Funding sources and regulations

• School Funding Formula• Schools Forum responsibilities• Schools delegated responsibilities• Financial challenges

2014/15 Gross Expenditure - £1.9bn

2014/15 Funding Sources – including schools

2014/15 Funding Sources – excluding schools

County Councils' Formula Grant Per HeadUpper Tier Funding Per Head 2014/15

£0

£50

£100

£150

£200

£250

£300S

urr

ey

£94

Bu

ckin

gh

amsh

ire

£10

8

HA

MP

SH

IRE

£1

16

Wes

t S

uss

ex

£123

Her

tfo

rdsh

ire

£13

5

Ox

ford

shir

e £

137

Le

ices

ters

hir

e £

138

Do

rse

t £1

53

Cam

bri

dg

esh

ire

£15

6

War

wic

ksh

ire

£15

9

Wo

rce

ster

sh

ire

£169

No

rth

Yo

rksh

ire

£17

3

Sta

ffo

rds

hir

e £1

78

Ess

ex £

181

Glo

uc

este

rsh

ire

£18

2

No

rth

amp

ton

shir

e £

189

Ken

t £

191

Su

ffo

lk £

208

Eas

t S

uss

ex £

210

So

mer

set

£21

5

No

ttin

gh

amsh

ire

£22

1

Dev

on

£22

1

Der

by

shir

e £

234

Lin

coln

sh

ire

£242

La

nca

shir

e £

252

No

rfo

lk £

254

Cu

mb

ria

£260

Fire tier funding has been excluded, so county councils responsible for providing fire services are comparable with those not responsible for them

Transforming the Council - Savings

Children’s Services – Savings (Non-schools)

• 2010/11 - £4.8m in-year• 2011/12 - £18.8m (incl £3.5m pressures) (8%

plus passported grant reductions)• 2012/13 - £10.4m (8% balance)• 2013/14 - £2.3m (2%)• 2014/15 - £6.3m (EIG reduction)• 2015/16 - £19.3m (12%)• By 2017 - £20.5m (14.5%)

10

2009/10

2010/11¹

2011/12²

2012/13³

2013/14³

2014/15³

Schools£796.8m

£805.2m

£812.6m

£821.1m

£851.8m

£882.9m

Non- Schools

£164.5m

£169.5m

£172.9m

£166.6m

£160.9m

£162.4m

¹ 2010/11 – Extended schools re-classified from schools to non schools £3.5m. NB In-year ABG reduction of £4.9m (non schools)

² 2011/12 – Net Adjustment of grants reclassification - £19.9m from schools to non-schools . £15.3m pressure non-schools. Schools ‘headroom’ £7.9m

³ Schools figures for 2012/13, 2013/14, 2014/15 include academy recoupment - £107.6m, £145.5m, £157.3m respectively

Schools and Non Schools Budgets 2009/10 – 2014/15

11

Schools 2014/15 Original Budget

£000

Dedicated Schools Grant (DSG) Early Years Block High Needs block Schools block

60,65988,985

700,233848,88

8

Less funding for Academies (157,276)

Sub-total 691,612

Less items managed by Policy and Resources

(6,684)

Pupil Premium Grant 39,406

Music Grant 1,283

Total schools budget managed by Children’s Services

725,817

12

Children’s Services Budget 2014/15

Cash Limit £000

ForecastOutturn Period 7£000

Variance£000/ %

Schools 735,878 732,791 (3,087) 0.4%

Non-schools 166,399 172,346 5,947 (3.6%)

Total 902,277 905,137 2,860 0.3%

13

Children’s Services CapitalCapital programme •Role of the local authority to strategically plan capital investment •3 year programme (2014/15 to 2016/17) £238m (over 40 projects)

– 8,000 new primary school places across Hampshire– New designed schools – 2 storeys, reduced floor area, constructing in

batches

•Priority areas : – maintenance of existing buildings– Education centres– Special Education Needs– Children’s Homes– Infant Free School Meals

14

Children’s Services CapitalDevolved formula capital (DFC)•DfE grant – calculation set nationally•DFC is calculated for all maintained mainstream nursery, primary and secondary schools, special schools, pupil referral units (PRUs), academies, sixth form colleges and non-maintained special schools •Paid to schools for local capital projects•£3.4m in 2014/15

Children’s Services – Statutory responsibilities

• Director of Children’s Services

– Children Act 2004

– performance of local authority functions relating to the education and social care of children and young people.

– ensuring that effective systems are in place for discharging these functions, including where a local authority has commissioned any services from another provider rather than delivering them itself.

– leadership, strategy and effectiveness of local authority children’s services.

– securing the provision of services which address the needs of all children and young people, including the most disadvantaged and vulnerable, and their families and carers.

LA statutory services to schools• Defined in regulations, includes:

– School improvement– Access to education e.g. place planning, admissions– home to school transport (including SEN) – education psychology, identification and assessment of

children with high needs– Making and monitoring of statements– commissioning and monitoring of high needs provision– prosecution of parents for non-attendance – education other than at school including virtual school– Strategic management e.g. role of the DCS, budget

preparation, financial assurance, internal audit etc.– Data linkage between LA and schools

Regulations • The School and Early Years Finance (England)

Regulations• Children Act 2004• Assorted Education Acts• School Standards and Framework Act 1998• Education and Inspections Act 2006• Apprenticeships, Skills, Children and Learning Act

2009

How schools are funded• Spend only permitted in line with Schools and

Early Years Finance Regulations• Funded through:

– Dedicated schools grant– Additional funding to schools through the Pupil

Premium and other specific grants

Dedicated Schools Grant• Ring-fenced grant that consists of 3 notional

blocks:– Schools– Early Years– High Needs

• Funding can be:– Delegated (funding directly to schools through the formula)

– De-delegated (funding passed back from schools to be held centrally)

– Centrally held (funding top sliced from DSG before the formula is allocated)

Pupil premium 2015/16

Primary Secondary

Ever 6 FSM £1,320 (+£20 incr from 2014/15)

£935

Service Family (Ever 4)

£300 £300

Looked after children (LAC)

£1,900 £1,900

Post Looked after children (Post LAC)

£1,900 £1,900

• Early Years – 53p per hour , £300 per child (New in April 2015)

• Additional grant passported directly to schools to raise the attainment of disadvantaged pupils and close the gap between them and their peers.

21

Education Services Grant• Un-ringfenced grant paid to local

authorities and academies • Includes school improvement,

therapy/health, statutory and regulatory services, education welfare, asset management etc

• Nationally set rates for schools and academies

• Recognises local authority retained responsibilities for academy pupils (educ welfare, asset mgt, stat/reg duties)

• Protection for academy budgets

22

Education Services Grant• Per pupil allocations for LA and Academies :

– 2014/15 = £113– 2015/16 = £87

• PRUs x 3.75, Special x 4.25

• Academies protection set to reduce over time

• LA retained responsibilities - £15 per pupil

Total funding 2014/15 - £18.6m

Education Services Grant• DfE recognises:

• Significant limitations with data• Different interpretations of Section 251

guidance• Time lag (budget/spend)• No separation of retained duties from spend

on maintained schools• Reporting errors

• Arguably the analysis is a means to an end in justifying a significant grant reduction

23

How the funding flow works

25

School Funding Formula• Fundamental reform implemented April 2013• Pupil driven budgets – DfE aim to maximise delegation to

schools• 80% of funding must be allocated via the pupil-led factors• Sets formula for all schools and academies in LA area• 14 allowable factors in schools block• Principles established and agreed with Schools Forum

– Protection of small schools through lump sum– Minimise turbulence in funding– Cost of protection for changes to individual schools budgets

met through reduction in funding to schools gaining from the changes

– Distribution of overall funds between the primary, secondary and special phases to remain unchanged

– The total amounts allocated overall to each factor remain broadly in line with those in the current formula

• Extensive modelling and consultations with schools

School funding

• Funding is allocated and published to each school by a “budget share”.

• Funding to individual schools is calculated based on allowable factors set by the DfE

• Values and factors used locally determined and agreed with Schools Forum

• The schools budget share allocation is available by 28 February.

• Protection for reductions in pupil level funding through Minimum Funding Guarantee (MFG)

Budget share factorsCompulsory Hampshire IOW1.Age Weighted Pupil Unit 2.Deprivation/IDACI Optional pupil-led factors 3.Prior attainment 4.Looked after children 5.English as an additional language 6.Pupil mobility Optional other•Sparsity •Lump sum •Split site costs. •Rates •Private Finance initiative (PFI) n/a n/a•London fringe n/a n/a•Post 16 •Exceptional premises factor

Budget share allocationsHampshire schools and academies

School Type Number of Schools

(maintained)

Number of schools

(academy)

Number of Pupils (Oct

13)

Total Budget Shares 2014/15

£m

Nursery 3 - 169 £1,643

Primary 415 12 98,943 £377,537

Secondary 40 30 65,296 £311,384

Special 23 3 2,484 (places) £32,201

Education centres 6 1 524 £8,150

Total 487 46 167,416 £730,915

De-delegation options 2014/15Allocated through the formula but de-delegated back for maintained mainstream schools :

Hampshire IOW–Contingencies –behaviour support services –Support to under performing ethnic groups –free school meals eligibility –insurance–museum and library services –licences and subscriptions –staff costs (trade union, public duties).

Centrally held 2014/15• Central services (no increase in expenditure from 2013/14)

– Admissions– Servicing of schools forum

• Centrally retained (no increase in expenditure from 2013/14 and no new commitments)– CERA– Combined budgets– Termination of employment costs– Prudential borrowing – SEN transport

• Centrally retained (retained before allocating formula)– Growth fund (Infant Class Size, growing schools, falling rolls)– Fees for independent schools for non-SEN pupils

Current policies• Limited local discretion through agreed policies:• Growth fund

– Growing schools

– Infant class size

– Falling rolls

– Temporary classrooms

• Contingency• 3% Cap on statemented spend• Split site

High Needs top-up funding• Paid to schools and academies by LA • Statement top-up funding in excess of £6,000 (12.7

hour of LSA support)• 3% Cap on statemented spend• Hampshire pupils in Other local authority schools –

paid at OLA rate• OLA pupils in Hampshire schools – school invoice

OLA

Special schools, Resourced provisions, Education centres

• Place plus model introduced April 2013• Agreed Place numbers (APN) at the beginning of the year –

fixed element £10,000 (national rate)• Top-up funding set locally• Top-up funding follows the pupil in real time• Top-up funding based on need and characteristics of the pupil• Allocations made termly• Academies paid monthly for cash flow• OLA top up SLA

SEN funding matrixPre-16 and Alternative Provision Post - 16 SEN and LDD

Mainstream per pupil funding (AWPU)

Base funding of £10,000 for SEN and

£8,000 for AP placements which is roughly equivalent to

the level up to which a mainstream provider

would have contributed to the additional

support provision of a high needs pupil. Base funding is provided on the basis of planned

places

Mainstream per pupil funding (as calculated by the national

16-19 funding system)

Contribution of £6,000 from the notional SEN

budget to fund additional support

required by a pupil with high needs

Contribution of £6,000 from the notional SEN budget to

fund additional support required by a student with

high needs

Element 1:Core Education

Funding

Element 2:Additional Support Funding

Element 3:Top up

Funding

“Top up” funding from the commissioner to meet the needs of each pupil or student placed in the institution

Mainstream Settings Specialist Settings All Settings

Early Years fundingProviders funded via the Early years Single Funding formula (EYSFF)

3 and 4 year olds

Hampshire IOW

•Base rate £3.81 £3.60

•Additional supplements :

– Flexibility – Quality

– Deprivation Additional payments for - LAC

- SEN

2 year olds

– Funding from Department for Education - £5.07 per hour

– No additional supplements – already includes an element of deprivation

– Additional payments for SEN

– Rate paid to provider £5.07 £4.90

Schools Forum responsibilities• Membership

– Representatives from maintained and academy schools together make up at least two thirds of the membership

– School Members will be headteachers (or their representative) and governors – local authority discretion on proportionality (50/50)

– Representatives from early years, 16-19 and the diocese

– Local authority can appoint if no election or tie (schools, academies, 16-19)

Schools Forum responsibilities• Governance

– National guidance requires:• 4 meetings per annum – minimum• Must be public meetings• Speaking rights limited• Quoracy (Two fifths of total membership, allowing for vacancies)

– Local terms of reference provides:• Terms of office• Process for electing chair (cannot be elected member or council

officer)• DfE role

– Approval of MFG exclusions– Adjudication where Schools Forum does not agree LA proposals

Schools Forum responsibilities• Generally a consultative role but some

decision making powers:

Function Role of Forum

Formula change Must be consulted

Contracts Gives a view

High Needs and Early Years financial matters

Gives a view

De-delegation Primary and secondary maintained school members will decide for their phase

Central spend Decides

Changes to the Scheme of Financial Management

Approves

Schools delegated responsibilities• Headteachers and governors have maximum

freedom to determine spending priorities.• Schools are responsible for producing their

own budgets within the total resources available and monitor the income and expenditure against those budgets.

• The budget share should not be seen as dictating the amounts that schools can spend on individual headings except for rates/rents.

Schools financial controls• Controls apply only to maintained schools• Scheme for Financing Schools

– DfE statutory guidance states what the scheme must, should or may include

– financial relationship between the local authority and maintained schools– Agreed at schools forum following consultation with all schools

• Internal audit– Part of Corporate Resources –provide quality internal services to

schools – Most school reviews are risk assessed as low– Mainly focus on thematic or cross-cutting review – outcomes

communicated– Any school assessed other than low risk will have an ad-hoc visit

Schools financial controls (cont)• Schools financial value standard (SFVS)

– Mandatory self evaluation questionnaire driven by DfE

– Governors have formal responsibility for financial mgmt of their school

– 23 annual questions governors must discuss with headteachers and senior staff

– Completed and submitted to the local authority by 31 March each year

School expenditure 2013/14EXPENDITURE £m %

Teaching Staff 343,603 49.4

Non Teaching Staff 172,982 24.9

Supplies & Services 90,629 13.0

Premises 52,003 7.5

Support Services 32,157 4.6

Transport 2,225 0.3

Third Party Payments 2,182 0.3

Total 695,781 100

Financial challenges• National funding formula.• Academies and free schools• DSG flat cash / inflationary pressures• Changes in demographics

– Impact of falling number on roll– Growth in primary pupil numbers

• Cuts to local authority funding• Early Years – increasing take-up of 2 year old

entitlement• High Needs – increased statements, INMSS

Acronyms • ABG – Area Based Grant• AP – Alternative Provision • AWPU – Age Weighted Pupil Unit• DFC – Devolved Formula Capital• DfE – Department for Education • DSG – Dedicated Schools Grant• EAL – English as an Additional Language• EFA – Education Funding Agency• EIG – Early Intervention Grant• ESG – Education Services Grant• EYSFF – Early Years Single Funding Formula• EMTAS - Ethnic Minority and Traveller Achievement Service • FSM – Free School Meals • HCC – Hampshire County Council• IDACI – Income Deprivation Affecting Children Index• INMSS – Independent, Non-Maintained Special Schools• LA – Local Authority• LAC – Looked After Children• LSA – Learning Support Assistant• MFG – Minimum Funding Guarantee• PRU – Pupil Referral Unit (Education Centre)• SEN – Special Educational Needs