Agenda item

Report ED17035

The Sub-Committee considered a report setting out the Education Portfolio Holder’s draft 2017/18 budget which incorporated the future cost pressures and initial draft budget saving options reported to Executive on 11^th January 2017.  The Sub-Committee noted that there were still outstanding issues and areas of uncertainty remaining and further updates would be included in the 2017/18 Council Tax report to the next meeting of the Executive on 8^th February 2017.

The report anticipated that the disproportionate cuts in direct funding to local government would continue over the remainder of the four year spending review period.  The impact of funding reductions translated to a reduction in the Council’s Settlement Funding Assessment of 36% by 2019/20 compared with the England average of 21.6% for the period 2016/17 to 2019/20.  The Budget Strategy had to  be set within the context of a reducing resource base, with Government funding reductions continuing beyond 2020.  This highlighted the on-going need to reduce the size and shape of the organisation to secure priority outcomes within the resources available.  The overall updated strategy had to be set in the context of the national state of public finances, with austerity continuing given the level of public debt, and the high expectation from Government that services should be reformed and redesigned with devolution contributing to the transformation of local government.

Despite being a low cost authority, Bromley had achieved general savings of over £80m since 2011/12 but it was becoming more challenging to achieve further savings with a low cost base.  Overspends had been identified in the 2016/17 Budget monitoring report to Executive on 30^th November 2016 relating to SEN transport.  In addition to the cost pressure relating to SEN transport, there were potential funding reductions of up to £1.5m per annum towards SEN placement costs arising from the introduction of a ‘High Needs’ funding block from 2018/19.  This highlighted the need for a fundamental review of SEN services.  The Government had announced one off funding of just under £139,624 in 2016/17.  This related to a High Needs Strategic Planning Fund which local authorities could use to carry out a strategic review of their high needs provision.  Members were being asked to agree the release of this one off monies to undertake a review working with schools, colleges and other providers, and with parents and young people.

The latest forecast indicated that despite having a balanced budget in the next two years there remained a significant budget gap in future years that needed to be addressed.  The report to Executive on 11 January 2017 identified the budget gap rising to over £23m by 2020/21 with the gap rising steeply from 2019/20.

In relation to the Education Budget, additional growth pressures had been set aside in contingency of £750,000 for the additional cost pressures in SEN transport.  £477,000 had been allocated to the budget to cover the loss of Education Services Grant (ESG) due to schools conversion to Academies.  ESG would cease completely in 2017/18.

The Education Department continued to deliver effective services at a time when the landscape was an evolving one, presenting considerable financial challenges.  The SEND reforms had bought additional funding to support change but the extension of education, health and care plans through to age 25 had yet to work its way through the system and it was anticipated that this would have associated additional funding burdens for both DSG high needs block and RSG in the case of SEN transport.  The funding for the education capital programme remained uncertain and there was concern that the increased pressure to create bulge classes would create further DSG pressures.

The introduction of the National Funding Formula (NFF) in 2018/19 held risks for Education.  A second consultation had been issued by DfE in December which split out the funding into different siloes: the schools, early years, high needs, and central blocks.  The latest indication was that there would be a reduction in the High Needs Block of £1.5m which would have to be managed by the Department as far as possible.

In opening discussions, a Member sought assurances that, in light of the pressures facing SEN provision in September 2017, the High Needs Strategic Planning Funding that had been received from Government would be used to undertake a strategic analysis of SEN, reviewing provision and not just focusing on SEN transport.  The Member stressed the need to ensure that the Local Authority offered a SEN provision that was enticing and attractive to parents.  In response, the Director of SEN assured the Sub-Committee that a full strategic review of Special Educational Needs and Disability was planned.  This ‘root and branch’ review would allow the Local Authority to develop a strategy that would enable future needs to be identified.  It was clear that in order to address the challenges facing the service in the future the Local Authority would need to be proactive in ensuring that there was a planned approach to the provision of SEND services across the Borough.  The strategic analysis would also look at the ways in which mainstream schools could be equipped to enable them to better support pupils with SEND in the future, ensuring that there was a longer term approach to the provision of services.  The Sub-Committee requested that as the review progressed Members be provided with information concerning the level of spend that was being considered and the areas at which the funding would be targeted.

The Director of Education noted that Bromley had some high quality SEN provision in the Borough.  Acknowledging that the reality was that the funding envelope was unlikely to increase in the foreseeable future, the challenge facing the Local Authority was to now work within the current levels of funding and identify how to achieve the best value for money and provide the best possible provision from within the funding that was available.  The Head of ECHS Finance highlighted that there was still uncertainty surrounding the levels of funding that the Local Authority would receive as this was dependant on the National Funding Formula.  The consultation on the National Funding Formula would close on 22 March 2017 and it was suggested that the next meeting of the Sub-Committee be brought forward to earlier in March to enable the Sub-Committee to consider the Local Authority’s response to the consultation.

RESOLVED: That:

(a)  the update on the financial forecast for 2017/18 to 2020/21 be noted;

(b)  the initial draft 2017/18 budget be noted as a basis for setting the 2017/18 budget.

(c)  the Executive be recommended to consider the comments made by the Education Budget Sub-Committee in relation to the initial draft 2017/18 budget at its meeting on 8^th February 2017.