Agenda item

The Head of CEF Finance introduced the Report and explained that it had come before the Schools’ Forum for comments before being presented to the CEF PDS Committee on 1^st February 2024.

Section 3.2 of the Report showed the funding made available for 2024/25 across the four funding blocks – High Needs, Early Years, Schools and Schools Central, with further details contained in Appendix 2 on page 25 of the Report.

Starting with the Central Schools Block, the Forum were informed that funding had decreased as expected, and a further £50k of  LA funding had been added to underpin this, making an annual contribution of £560k in this block. The expectation was that the grant would continue to decrease over the next few years until a level was reached where DfE felt it was appropriate. LA contributions were also likely to continue until this point was reached.

Funding within the Early Years Block had risen substantially by £14.7m for 2024/25 due to new funding streams being introduced for under twos, new funding streams for two-year-olds with working parents and increased hourly rates. With reference to Section 3.10 of the Report, the Forum noted that some modelling had been carried out, with two scenarios detailed on page 13, one with a central contingency and one without. The LA suggested that scenario 2 (without contingency) was the preferred model as it directed maximum funding to settings. As allowed by DfE, some funding was kept back centrally, with the LA required to have a ‘pass through’ rate of at least 95% (i.e. at least 95% of the grant given by DfE had to go directly to providers). As seen in the tables on page 13, Bromley was currently within the parameters set, at 96%+. It was noted that the Government might increase the rate to 97% in future years but this was still under debate.

The Head of CEF Finance reported that funding within the Schools Block had increased by £11.7m, with the LA following the National Funding Formula (NFF). LAs are being asked to follow the NFF even more closely than in previous years, with the requirement that LAs must be 10% closer than before. This is not an issue for Bromley as the LA had followed the NFF guidelines and rates for a number of years.

Referring to Appendix 3 on page 26 of the Report, the Head of CEF Finance explained to the Forum that there were four different scenarios for distributing the funding. The LA recommended Option 4 as it most closely followed NFF guidelines and gave maximum MFG protection.

As previously agreed by the Schools’ Forum, the Falling Rolls funding had been removed for 2024/25, and this enabled more funding to go directly to schools. The LA’s overall contingency had also been reduced to maximise the amount going to schools.

Finally, within the High Needs Block, the Forum heard that this remained the block impacted by the most pressures. As detailed in Section 3.32, funding had risen but not significantly. The LA followed DfE guidance and it was estimated that the in-year deficit for 2024/25 will be £5.6m, i.e. the LA spending this amount on Higher Needs above the amount received in grant. The pressures within the High Needs Block (regularly discussed by the Schools’ Forum) had occurred over a number of years and there was expected to be a cumulative deficit of £16m by the end of the 2023/24 financial year.

The LA has lobbied for additional funding and has continued to look at ways to reduce the deficit position.

The Director of Education informed the Forum that the Interim Head of Service for Early Years, Caren Boiling, had met with a group of providers (including Forum Member Brid Stenson) to share information regarding Early Years funding, the two scenarios set out on page 13 of the Report, the proposed funding held centrally and issues surrounding the Special Needs Inclusion Fund (SENIF). It was agreed that the option without contingency would be considered.

Forum Member Brid Stenson informed Members that the general feeling was that people were pleased with the funding levels for 2-year-olds and under 2s, although there was slight disappointment with the levels for 3 and 4-year-olds and pre-schools, although there was the understanding that there was not enough money to go around.

Following guidance from the Chairman and the Head of CEF Finance, it was agreed by the Schools’ Forum to support Scenario 2 and this, together with any additional comments, would be reported to the CEF PDS Committee.

Turning to the funding within the Schools Block and the four scenarios for distributing funding, following general agreement, the Schools’ Forum agreed to support the LA’s suggestion/recommendation that Option 4 was most favourable.

The Director of Education reiterated that Forum Members were aware of the pressures on the DSG, primarily within the High Needs Block, and there was concern about the growing level of deficit within this Block and the implications. However it was noted that the LA was not currently near the Government’s ‘safety valve’ or in a position where additional funding/support was required from National funds. Work was ongoing on the Deficit Recovery Management Plan (DRMP). One of the actions set out in the plan was the review of high needs funding and estates which was near to its conclusion. A further update would be provided to Schools’ Forum in due course.

The Forum were also informed of the pressures on alternative and specialist provision services in the Borough. Another action within the DRMP was that the LA would try to secure additional provision where possible, particularly specialist provision, instead of using costly independent out-of-borough provision.

As detailed in Section 3.45 of the Report, work has continued on slowing the rate of increase in EHCPs. This was successfully achieved and for 2023 the increase rate was reduced by 16%, the first time this was achieved in Bromley. This was due to the work of the partnership between schools, the local authority, health and care.

In response to a question regarding the figures stated for AP Top-Up in Appendix 1 of the Report on pages 19 and 20, the Head of CEF Finance confirmed that there were different funding arrangements for AP and that funding wouldn’t be lost, there were just changes in the way the funding was delivered.

A further question followed regarding delegated budgets and whether for 2024/25 there would be a percentage increase in the top-up for Special Schools. The Head of CEF Finance responded by confirming that in terms of the MFG, the rate was set at 0% by DfE and this was followed by the LA (as in 2023/24 where it was set at 3% and this was followed).

Discussions then focused on the precarious position that some schools were left in when considering staffing, salaries etc and the question of where the money can be found. There were many rising costs but special school budgets were not going up. It was acknowledged that both schools and the LA were in the difficult position of trying to find funding for additional costs where no central funding was available to help. The disparity between funding for mainstream schools and special schools was highlighted, meaning that the most vulnerable children did not receive funding. The Head of CEF Finance understood the position and explained that the LA received its funding from Central Government. The LA had lobbied Central Government regarding High Needs and the increases in costs, complexity etc but unfortunately there was no additional funding to move around the blocks. Concerns around the possibility of Special Schools being required to make cuts, reduce staffing etc were raised.

The Director of Education acknowledged and understood all the concerns raised, with it being important to note the fact that the funding decision for Special Schools had come from Central Government and not the LA. The 3% increase for 2023/24 was set but for 2024/25 no increase/funding would be provided. The subsequent impact on vulnerable pupils was noted. Feedback on this issue was welcomed with LA concerns regularly raised with the DfE Regional Directors Office and the Director of Education happy to support any lobbying made to DfE around High Needs funding pressures.

In response to a question regarding the increase in SEN fees in the provisional budget, the Director of Education explained that it was due a combination of factors including it being an area of greater growth, an increase in FE College fees and an increase in requests for fourth year funding.

As recommended by the Chairman and agreed by Schools’ Forum members, it was felt important to reiterate the general feeling and points raised regarding the funding within the High Needs Block. The inequity in the system needed to be highlighted with the 0% increase for Special Schools unsatisfactory. If Mainstream Schools were being provided with an increase in their budget then why not for Special Schools, especially when they were working with and serving the most vulnerable children and young people? The Schools’ Forum requested that their comments and concerns be mentioned at the PDS meeting.

RESOLVED: That the Portfolio Holder be recommended to approve the Dedicated Schools Grant allocation for 2024/25 and the methodology of its distribution, taking into account the views of the Schools’ Forum.