Dedicated Schools Grant Settlement, Draft Schools Budget and Mainstream Schools Formula

AGENDA ITEM 7

POOLE SCHOOLS FORUM

15 JANUARY 2014

DEDICATED SCHOOLS GRANT SETTLEMENT, DRAFT SCHOOLS BUDGET AND MAINSTREAM SCHOOLS FORMULA 2014-15

1.  PURPOSE OF THE REPORT

1.1. To inform Schools Forum of the Draft Dedicated Schools Grant (DSG) Settlement for 2014-15 received in December 2013.

1.2. To consult Schools Forum on a draft Schools Budget for 2014-15 and to note the matters to be agreed at the February Schools Forum meeting.

1.3. School members to agree the level of the Growth Fund for in–year basic need growth and the criteria for allocation to mainstream schools and academies in 2014-15.

1.4. School members to consider the final mainstream schools funding formula adjustments for 2014-15.

1.5. Maintained school members to agree de-delegations from school budgets to allow for the provision of central services for the benefit of maintained schools only.

2.  DECISIONS

(Note - school members includes early years providers)

2.1. All Schools Forum members to note the draft DSG settlement for 2014-15, progress to-date in setting the Schools Budget, and the matters to be agreed at the February Schools Forum meeting.

2.2. School members only to agree an amount of £386,000 is set aside in a central budget to provide funding for in-year pupil growth for distribution according to the criteria detailed in paragraph 5.9.

2.3. School members only to agree proposals for the final mainstream schools funding formula adjustments as detailed in paragraph 6.7.

2.4. Maintained primary school members only to agree de-delegation of funding for the central provision of services for the benefit of maintained primary schools only as detailed in paragraph 7.6.

2.5. Maintained secondary schools only to agree de-delegation of funding for the central provision of services for the benefit of maintained secondary schools only as detailed in paragraph 7.7.

3.  SCHOOLS FINANCIAL SETTLEMENT 2014-15

3.1. The DSG settlement was announced on 18 December 2013 and is summarised in the following table along with a comparison with the December estimate.

Table 1: Forecast Dedicated Schools Grant 2014-15

December
Report
£000’s / Funding Stream / Forecast 14-15
£000’s
4,650 / Early Years 3 & 4 year old entitlement (provisional) / 4,650
940 / Early Years 2-year old entitlement (final) / 940
Early Years 2-year old growth (final) / 647
68,316 / Schools (final) / 68,328
(70) / Schools - Carbon Reduction Commitment (CRC) / (82)
12,491 / High Needs Baseline – Schools (all ages) / 12,703
234 / High Needs Baseline - Post Schools / 234
? / DfE adjustments in March 14 / ?
(173) / Ending of Transitional Funding / (173)
86,388 / Estimated DSG Settlement 2013-14 / 87,247

3.2. Early Years Block

3.2.1.  The 3 & 4 year old funding is provisional and is dependent on census data in January 2014 (at 5/12) and January 2015 (at 7/12) and will be finalised in June 2015. The funding included in the above table is based on a local estimate of take up at January each year.

3.2.2.  Funding for the 2-year old free entitlement is final and includes trajectory funding to enable the LA to build towards the extended free entitlement from September 14. It is based on the DfE estimate of children eligible with a funding rate per child of £4.88 remaining unchanged from 2013-14.

3.3. Schools Block

3.3.1.  Funding for the Schools Block remains unchanged overall from December. Funding for 3 additional pupils than forecast has been offset by a higher level of deduction for the CRC allowance.

3.4. High Needs Block

3.4.1.  Provisional changes have been made by the DfE since the December report to restate the 2013-14 baseline. The baseline now includes full year place funding for all ages of school provision without distinction for those funded by the EFA directly in 2013-14 from the national post-16 budget from August. The DSG had been reduced accordingly in 2013-14 for these places based on historic funding levels. This is to simplify the deduction to the DSG in March as it will include all age places to be funded by the EFA directly in 2014-15 for institutions included in the national funding arrangements. The increase in the schools baseline from 2013-14, therefore, does not represent any growth for increased pupils or rising needs across age ranges.

3.4.2.  Post school SEN funding, for post-16 Independent Specialist Providers (ISP) and FE Colleges, has been identified separately in the baseline, with a number of institutions receiving place funding directly from the EFA from the national post-16 formula. In these cases the DSG has to meet the costs of top up payments only.

3.4.3.  The DSG will be adjusted in March for school places to be funded by the EFA directly for both pre and post 16 pupils.

3.4.4.  The DSG is required to fund the full cost of commissioned places from independent schools or any other provider not directly funded for places by the EFA.

3.5. Outstanding Funding Adjustments (High Needs Block)

3.5.1.  Place returns for SEN provision, AP and Hospital Education were provided to the DfE in December. These will be finalised by the DfE over the spring term with a reduction in the DSG being made in March for school, AP and hospital education places in academies and non-maintained special schools where applicable.

3.5.2.  The outcome of the DfE review of place returns nationally may result in either high needs growth funding or a reduction from a further top slice to the DSG as the DfE has only limited funds to allow for any growth nationally. This will also be notified in March.

3.5.3.  Given the uncertainty is funding adjustments it is assumed that the DSG will remain broadly unchanged from the December Settlement. Any additional funding or shortfall will be dealt with through the budget process for 2015-16.

4.  DRAFT SCHOOLS BUDGET 2014-15

4.1. The final mainstream schools formula values are to be provided to the DfE by 21 January. The pro forma to be returned also requires details of the methodology to allocate funding for in-year pupil growth and Exceptional SEN. This early notification is necessary to provide time for the EFA to check the information and progress allocations for mainstream academies.

4.2. A draft summary DSG budget for next year to provide context for these decisions is scheduled below.

Table 2 – Draft DSG Budget 2014-15

13/14 / 14/15
Budget / Budget / Change / Notes
Early Years
Providers 3 & 4 / 4,082 / 4,301 / 219 / Increased take- up
Providers - 2's / 831 / 1,456 / 625 / Increased entitlement
Central Spend / 463 / 463 / 0
5,376 / 6,220 / 844
Schools
Mainstream Formula / 68,197 / 67,074 / -1,123 / Affordability/reserves
Claw back from 13/14 over allocated / -210 / -210 / Pupils > 15 below forecast
School Admissions / 180 / 150 / -30 / Age of transfer now complete
Licences purchased by DfE / 41 / 60 / 19 / Additional licences/pupils
Growth Fund / 200 / 386 / 186 / Demographic growth
Servicing Schools Forum / 6 / 6 / 0 / Limited to 13/14 level
Carbon Reduction Commitment / 70 / 0 / -70 / Schools outside scheme 14/15
68,694 / 67,466 / -1,228
High Needs
SEN Places - Poole LA Schools / 2,090 / 2,210 / 120 / 14/15 includes post 16 places
Medical Places - Quay School / 806 / 806 / 0
AP Places - Quay School / 480 / 480 / 0
Home Tuition SLA - Quay School / 74 / 74 / 0
High Needs Contingency / 48 / 0 / -48
Non-maintained School Places / 330 / 390 / 60 / 14/15 includes post 16 places
Top up Funding – LA Schools / 3,588 / 3,813 / 225 / Increased needs/pupils
Top up Funding – Non LA Schools / 4,366 / 4,553 / 187 / Increased needs/pupils
Top up Funding - Post Schools / 304 / 454 / 150 / Additional term
Special School Outreach / 265 / 265 / 0
Other Education Out of School / 118 / 130 / 12 / Increase to In-year Fair Access
Support for inclusion / 48 / 48 / 0
Specialist support - SENISS / 64 / 64 / 0
Specialist Support - Sensory impaired / 286 / 286 / 0
12,867 / 13,573 / 706
Total / 86,937 / 87,259 / 322
Funded by:
DSG / 85,921 / 87,247 / 1,326 / High needs baseline & 2 year old changes/ pupil growth
EFA (Post 16 Teachers Pay) / 86 / 0 / -86 / Final year of support in 13/14
Reserves / 930 / 12 / -918 / Small carry forward 13/14
86,937 / 87,259 / 322

4.3. Early Years Block

4.3.1.  The budget for the 3 & 4 year old free entitlement has been estimated based on the forecast number of hours for the year with the application of the funding rates proposed in October. The budget has increased for 2014-15 due to an increased rate of take up of the full free entitlement and this is forecast to continue next financial year.

4.3.2.  The budget for 2-year olds has been included at the level of funding less 1.5%, to manage overall affordability in 2014-15 but also to prepare for the move to participation funding in 2015-16, which was confirmed in the December Settlement details. The full DSG funding rate was passed on to providers in 2013-14, with central costs met from trajectory funding. A level of central spend is currently allocated to support take-up and SEN and this will need to be catered for within the DSG per pupil funding rate in future, as for 3 & 4 year olds.

4.3.3.  The central spend budget for the free entitlement for 2, 3 & 4 year olds supports pupils with SEN and costs of establishing the 2 year old take-up of places and has been set at the same level as 2013-14.

4.4. Schools Block

4.4.1.  The mainstream formula budget takes account of the final data received from the DfE in December 2013 and the proposed revised formula values in paragraph 6 below.

4.4.2.  The reduction between years reflects the reserves used in 2013-14 to support the Minimum Funding Guarantee (MFG) in Age of Transfer Schools, the need to allow for further significant pupil growth in September 2014, and to support rising SEN costs.

4.4.3.  The proposed contingency for in-year pupil growth of £386,000 is considered in more detail below in paragraph 5.

4.4.4.  The regulations provide that central budgets for school admissions and schools forum cannot be higher than budgets set aside in 2014-15. The school admissions budget has now reduced as 2013-14 included additional resources for the age of transfer double admissions round.

4.4.5.  The DfE has increased the scope of licences paid centrally by adding three new agencies to the arrangement from 1 April 2014. The DfE are to purchase a single national licence for all state-funded schools for the following agencies:

Copyright Licencing Agency (CLA)

Music publishers Association (MPA)

Newspaper Licensing Authority (NLA)

Education Recording Agency (ERA)

Motion Picture Licensing Company (MPLC)

Public Video Screen Licence (PVSL)

This service is to be managed by the DfE with costs plus an administration fee being charged on to LAs for all state schools in the local area. The cost of these licences, calculated according to pupil numbers at the October 13 census, is £60,000 for Poole in 2014-15.

As last year the budget is to be held centrally so that reimbursement to the DfE can be made for all schools. The amount set aside includes a DfE administration fee estimated at 5%.

4.5. High Needs Block

4.5.1.  The budget for special school places is based on an agreed number of places across the 3 special schools.

4.5.2.  It is proposed to reduce the top up funding rates by the MFG of 1.5% for Poole special schools to be consistent with mainstream schools in managing budget affordability.

4.5.3.  The Exceptional SEN Fund of £34,000 is included in top up funding for LA Schools and is considered in a separate report on the agenda.

4.5.4.  Special School outreach remains funded from the high needs block as a service to mainstream schools at 2013-14 levels. Access to support will continue to be considered through the Multi Agency Advisory Group (MAAG). The future of this arrangement with special schools will be reviewed during 2014-15.

4.5.5.  The Quay School budget for exclusions, behaviour support, home tuition, on-site medicals and hospital education is not yet finalised and adjustments may be made following the DfE review of places.

4.5.6.  The high needs block budgets will be considered further in the February Report.

4.6. Funding

4.6.1.  The funding section of the table reflects the estimated DSG for the Early Years Block, final announcements for the Schools Block and allocations to-date for the High Needs Block.

4.6.2.  The increase in the DSG reflects the extension of the free entitlement for 2-year olds, pupil growth in early years and schools since January 2013, and the rebase of the 2013-14 High Needs funding to include post 16 places for a full year.

4.6.3.  Schools budget growth in 2013-14 was supported with £930,000 of DSG reserves brought forward and the final year of support for post 16 teachers pay from the EFA. The £12,000 funding from reserves in 2014-15 is from a forecast underspend in the Targeted Mental Health budget brought forward from 2012-13. This budget was initially set side in 2011-12 and there are no plans to continue to carry forward to 2014-15 for this purpose.

5.  GROWTH FUND FOR BASIC NEED 2014-15