Agenda item

To present an update on school funding and to seek comments on proposals from the Council for the 2016-17 Schools Block element of the Schools Budget.

The Forum was presented with a report updating on school funding and to seek comments on proposals from the Council for the 2016-17 Schools Block element of the Schools Budget.  Recommendations agreed from this report would form the basis of proposals to be presented to the Executive Member for Children, Young People and Learning.  Thereafter, there was a tight timetable to record the views of the Forum on the report proposals with 21 January 2016 being the deadline for the submission of the actual Funding Formula for Schools to the Department for Education (DfE).

Paul Clark, Head of Departmental Finance, Children Young People and Learning said the current financial climate continues to create difficulties in setting a balanced Schools Budget. This related to the tight financial settlement from the DfE that does not include funding for £2.7m of known cost pressures – equivalent to 3.3% of current spending - and the emerging long term pressure arising from new / expanding schools. To finance the budget changes considered necessary, the Council was proposing a one off draw down of £0.213m from the general balances of the Schools Budget meaning reductions to school budgets were not proposed.

Questions and comments from forum members were received in respect of:

• Was there any information on how the government intended to reduce the local authority role in running schools and remove a number of statutory duties to which officers confirmed that details were outstanding.
• Wasn’t it inevitable that school budgets would have to be cut in the future to pay for the diseconomy funding that expanding / new schools would required? Officers commented that the main factor to influence this would be the outcomes of the proposed National Funding Formula for Schools. With the BFC funding rate the 17^th lowest out of 151 LAs, it is considered more likely to benefit from this review than to be penalised.
• Would there be issues around providers having insufficient capacity to deliver the required places to meet the anticipated increase from doubling the free entitlement from 15 to 30 hours? Officers commented that plans were in place to meet future need including talks with those nursery providers who share premises with other community service providers.
• The investment of additional resources to increase the average hourly rate childcare providers receive was welcome as existing rates are considered low.
• With a recent report indicating a 20% reduction in SEN pupils, this may offset the additional costs anticipated moving forward from the increase in post-16 SEN numbers as a result of LA responsibilities being extended from age 19 to 25.

The Forum AGREED the following recommendations made in the report:

• That the administration arrangements in place in respect of the allocation of central government grants were appropriate and would remain unchanged.
• The budget amounts for each of the services centrally managed by the Council and funded from the School Block DSG.
• That the budget for Schools Block DSG is reset to £66.522m which was an increase of £1.246m to the current budget of £65.276 and that other Schools Block related grants be reset to anticipated 2016-17 amounts.
• To maintain appropriate funding allocations for the most vulnerable pupils, budget allocations to schools in respect of deprivation and low prior attainment should remain at 3.9% and 3.3% respectively of total funding.
• The funding allocations to be paid to new / expanding schools. 
• The net £1.459m of budget adjustments were allocated to the budget areas set out in the report as follows:

o   £1.378m into delegated school budgets

o   £0.081m into centrally managed budgets

• The £0.213m shortfall in funding to be financed by a one-off allocation from the year end surplus of £0.609m from the Schools Budget.
• That the requirement to hold £0.51m in general reserves as a contingency provision against unforeseen cost increases was waived again for the 2016-17 budget.
• That the DfE pro forma template of the 2016/17 BF Funding Formula for Schools as set out in Annex 6 of the report be submitted for the 21 January deadline.

The report requested that the Forum NOTED the following items:

• That proposals in respect of the Early Years and High Needs Block elements of the Schools Block would be presented for consideration to the Forum at its 10 March meeting when more information would be available in respect of funding and likely spending requirements.

• That a significant budget pressure on the new / expanded schools programme was anticipated that may require future reductions to school budgets.

• The general balances on the Schools Budget were £0.114m below the minimum required level, which would need to be addressed in future budgets.
• The education related outcomes from the Government Spending Review 2015.

• The cost pressures that schools were likely to need to finance from within existing resources, estimated at around 3.3% of current spending levels. 

Primary School Representatives AGREED:

• To the continued de-delegation of budgets for the services permitted by the DfE.

Secondary School Representatives AGREED:

To the continued de-delegation of budgets for the services permitted by the DfE for 2016/17 with a review to be undertaken with secondary schools to determine their longer term requirements on these services.