Agenda item

To present updated proposals for the 2021-22 Schools Block and Central Schools Services Block elements of the Schools Budget.

The Forum considered a report which presented updated proposals for the 2021-22 Schools Block (SB) and Central Schools Services Block (CSSB) elements of the Schools Budget. Associated decisions needed to be agreed at this meeting to ensure progress was made in meeting the 21 January 2021 statutory deadline for agreeing the budgets.

Paul Clark explained that most decisions had already been taken but the Forum was now able to consider the provisional data from the October 2020 school census and centrally managed budgets. There had not been many changes and it was still forecast that there would be around a £0.400m shortfall in the budget available for schools with proposals managing the previously reported £0.080m shortfall in centrally managed budgets set out in the report.

There had been an average increase in eligibility for free school meals (FSM) of 17%. This created an unfunded budget pressure for 2021-22 of £0.094m but was likely to be just for one year as the 2022-23 DSG funding rates would include the new numbers. It was expected that the entitlements and costs could reduce as the economy recovers.

The report set out proposals to manage the budget gap and alleviate local pressures which was complicated by the outstanding decision awaited from the secretary of state in use of council funds to support school budgets through the agreed medium term funding strategy.  If the secretary of state refused, another option was a temporary funding swap with the £20 per pupil contribution to LA statutory education related duties.

In terms of the additional £0.094m pressure from additional FSM eligibility, Paul Clark advised that it was appropriate to use Reserves to fund this, as it was only a one-year pressure.

Table 2 of the report showed that, after all proposed funding options were applied, there was an expected SB funding shortfall of £68,000. Paul Clark explained that this could change once the DfE provides the final data set, but no significant differences were expected. To meet the £68,000 shortfall, the Forum was also asked to consider top-slicing National Funding Formula (NFF) rates. However, due to the number of schools on the protected Minimum Per Pupil Funding (MPPF) values, the burden of financing that would be met by only 21 of the 36 BF schools which meant that to recover the same amount of funding as in 2020-21, the rate of deduction was likely to need to be around twice the amount.

The Forum asked whether the data wash would work in BF schools’ favour or against. Paul Clark replied that there was not any consistency with that. However, Paul did not think there would be any significant changes.

The Chair queried whether there was likely to be any comeback from the DfE for doing the switch with the £20 contribution. Paul Clark clarified that it was a local arrangement and the council would not need DfE permission to do that; the council had the power to make that decision.

RESOLVED

1.    to AGREE

i      that the final budget proposals for the 2021-22 budget, to be presented to the Forum in January, are in accordance with principles included in the supporting information, as summarised in Table 1 of the report, and in particular that:

a.   no changes are made to the Start-up and diseconomy funding policy for new and expanding schools (paragraph 6.18 of the report);

b.   the Growth Fund, including appropriate elements is set at the amount reported in Annex 1 of the report;

c.   budgets for de-delegated services are increased by 1% (paragraph 6.24 of the report); and

d.   the CSSB budget, including appropriate elements is set at the amount reported in Annex 2 of the report; and

ii    For April 2022, there should be at least £1m in Reserves to fund the medium-term cost of new schools (current balance is £1.155m).

iii   Ordinarily, a maximum of £0.250m is withdrawn each year from Reserves.

iv   With the increased risk associated with the secretary of state not agreeing use of council funds to support school budgets, the remaining Reserves of £0.409m should be a first call on any funding pressure.

v    If the secretary of state refuses use of council funds to support school budgets, then a temporary funding swap with the £20 per pupil contribution to local authority statutory education related duties should take place. The effect of this being maintained mainstream schools would retain the £20 per pupil deduction that is ordinarily taken and the income the council ordinarily received from this source would instead be met from the council’s Reserve to support school budgets. This amounts to circa £0.230m per annum.

vi   The £0.094m increase in FSM funding allocations to schools that will not be matched by an increase in DSG, can be considered for funding from the Unallocated Schools Budget Reserve as it is one-off in nature. The allocation from Reserves would then exceed the expected £0.250m annual maximum but remains affordable within the minimum £1m Reserves balance objective.

vii  A top slice to NFF rates should then be considered, although if the additional cost of increased FSM eligibilities is met from Reserves, then any top slice should be applied equally to all factors in the BF Funding Formula; and,

2.    to NOTE

i     the significant increase in numbers of schools on the protected MPPF values – 42% of schools compared to 19% in 2020-21 – results in the burden of financing any agreed top slice to NFF funding rates to be met by only 21 of the 36 BF schools (paragraph 6.27 of the report);

ii    that the 2020 Spending Review confirmed no significant changes to previously announce funding levels for education and schools, with the overall increase in funding remaining at £2.2bn (paragraph 6.41 of the report); and

iii   the DfE are expected to publish a policy document by the end of December to set out proposals to move to a “Hard” formula with limited LA involvement with associated consultation documents at the start of the new year (paragraph 6.8 1.f of the report).