Agenda item

Report ED16030

Members of the Forum considered a report outlining the Local Authority’s responses to the School National Funding Formula and High Needs Funding Formula and Other Reforms – Stage One consultations which sought views on the general principles and the factors to be used in any future funding formula for schools.  The closing date of the consultations was 17^th April 2016.  Complete proposals, including the impact of any change, would not be known until the second stage which would be undertaken later in 2016.

The main points within the two consultations were:

Schools National Funding Formula:

·  Dedicated Schools Grant was currently spread across three blocks (High Needs, Early Years and Schools Blocks) and would increase to four blocks with the introduction of a new Central Schools Block.

·  Each Block to be individually ring-fenced so that funding could not be moved from one Block to another within the overall ring-fenced Dedicated Schools Grant.

·  Funding for Blocks to be realigned to match the Local Authority’s current spend.

·  Funding for Schools Block to be calculated based on the National Funding Formula for 2017/18 and 2018/19 with Local Authorities able to continue to fund schools using their local formula for two years before moving to the National Funding in 2019/20.

·  Local Authorities to be required to pass on all Schools Block funding to schools.

·  Some changes were proposed to factors currently used in the funding formula.

·  It was proposed that there would be a local minimum funding guarantee from 2017 to 2019 and a national minimum funding guarantee from 2019/20 to protect schools due to lose from the National Funding Formula.

·  The new Central Schools Block to be made up of current expenditure within the Schools Block such as school admissions and would be combined with other central expenditure currently funded by the Education Services Grant.

High Needs Funding Formula and Other Reforms:

·  Move to a formulaic distribution of high needs funding that would better reflect current needs rather than be based on historic spending.

·  Proposed formula to include factors relating to health, disability, low attainment and deprivation.

·  Review of the “notional special educational needs concept” to provide more clarity for mainstream schools.

·  Proposed changes to funding for mainstream schools with special units to support and encourage inclusion.

·  Alternative Provision being an integral part of the High Needs block: however;

The White Paper referred to a reform of the Alternative Provision system so that mainstream schools would remain accountable for the education of pupils in Alternative Provision and be responsible for commissioning high quality provision. This clearly stated that schools would also be responsible for the budgets from which Alternative Provision was funded which inferred that the funding could move from the High Needs Block to the Schools Block although there was no indication of the timeframe for this.

In discussing the Local Authority’s draft responses to the consultation, a number of Forum members expressed concern that the local minimum funding guarantee which would be introduced from 2017-2019 to protect schools due to lose would reduce the level of funding received by schools due to gain from the National Funding Formula, and underlined the need to ensure that schools would realise any total funding gain as soon as possible.  The Head of Schools’ Finance Support noted that work was already being undertaken to bring Bromley’s funding formula in line with the National Funding Formula, and that there would a period of transition before moving to the National Funding Formula in 2019/20, which would allow schools time to prepare for the new funding structure.  Any increase in funding during 2017-2019 would be distributed on the existing funding formula.  Members of the Schools’ Forum emphasised that the low level of funding provided to Bromley schools in comparison with other local authorities should be highlighted as part of the consultation.

In considering the new Central Schools Block, the Head of Schools’ Finance Support reported that this would be made up of current expenditure within the Schools Block, such as for school admissions, and would be combined with other central expenditure funded by the Education Services Grant for Local Authority Maintained schools.  The Head of ECHS Finance confirmed that the Local Authority was reviewing services funded via this grant to identify if these functions were still required.  Under the National Funding Formula there would be no discretion for funding to be transferred between Blocks or for any underspend to be redistributed to schools as all Blocks would be ring-fenced.

With regard to the High Needs Funding Formula, Members of the Forum discussed the need to clarify the funding mechanism for Alternative Provision and whether this would be part of the High Needs or Schools’ Blocks.  The Head of Schools’ Finance Supported noted that more information would be made available around how the funding formula would work as part of the Government Consultation – Stage 2. 

Members considered the draft responses to the two consultations and the following points were raised:

Schools National Funding Formula – Government Consultation – Stage One:

1)   Response to be amended to “The LA supports the principles outlined in the consultation and as an authority which we deem to be underfunded welcome the opportunity for this to be addressed.”

2)   Response to be amended to “This will inevitably cause some turbulence between schools, so it is hoped that any additional funding that the LA may benefit from may offset the full impact of this.”

4a)   Response to be amended to “Whilst we are concerned at application of IDACI and the turbulence this could cause, the LA does agree that there should be a deprivation factor…”

7)   Response to be amended to remove the reference to multi-academy trusts to “The LA agrees that there should be a lump sum factor, particularly in view of the important role that this factor plays in supporting small schools.”

8)   Response to be amended to remove the reference to multi-academy trusts to “Bromley does not currently have this element within their formula so is not able to comment specifically on this.”

9)   Response to be amended to remove the reference to multi-academy trusts to “Bromley does not currently use this factor so is not able to comment specifically.”

20)   Response in second bullet point to be amended to “Hoped that the realignment process will resolve this however will need additional funding to prevent any reduction in schools funding”

21)   Response to be amended to “We assume that this will be subject to area cost adjustment as some of the related expenditure may vary regionally.”

High Needs Funding Formula and Other Reforms – Government Consultation – Stage One:

1)   Response to be amended to “The LA does agree with the principles but feels that more details are required in order to fully understand the impact of some of the changes, particular around alternative provision funding and how this relates to the White Paper.”

4)   Response to be amended to “AP funding – consultation refers to continuation of AP funding within the High Needs Block – but this seems to be in conflict with what is stated in the White Paper.”

Following consideration of the consultation responses, the Head of Schools’ Finance Support provided an update on the Working Group, which consisted of representatives from all three funding blocks and had been established to consider the future pressures on the Dedicated Schools Grant in detail and identify a fair way of making budget cuts across all blocks in order to balance future budgets.  Representatives of each Block had met and had undertaken a range of budget modelling activities.  The Schools’ Block representatives would be meeting shortly with two Primary Head Teachers to discuss this in more detail, and with all Primary Head Teachers in May 2016.  The need for a strategic viewpoint on changes to the High Needs Block had been identified and would be supported by the Director Education.

RESOLVED that the comments of the Schools’ Forum on the proposed consultation responses be noted.