Agenda item - REPORT OF THE BUDGET WORKING GROUP

To consider the report of the Budget Working Group on the following matters: response to consultation paper on introduction of high needs multi-tariffs and proposed national funding formula changes 2014/15, final Dedicated Schools Grant Allocation 2013/14; High Needs spending forecast, SEN Support Services and School Transport.

RESOLVED: That

(a) the proposals for the local application of the funding Formula for 2014/15 as set out at Appendix 1 to the report, subject to an amendment to printed recommendation l, as reflected below, be approved for recommendation to the Cabinet Member – Children’s Wellbeing as follows:

a) The strategy of moving the primary secondary funding ratio from 1:1.18 to 1:1.23 over a five year period and the associated funding transfer of an annual £200,000 from primary to secondary schools so that Herefordshire’s funding ratio is consistent with the family average of comparable local authorities be approved;

b) The strategy be reviewed annually to ensure that further movement towards the 1:1.23 “family average” funding ratio is appropriate depending on DfE guidance;

c) The lump sum values (proposed by the f40 group) of £75,000 for primary schools and £150,000 for secondary schools be phased in over five years as part of the five year strategy;

d) The lump sum allocation for primary schools be reduced by £6,000 to £99,000 in 2014/15 as the first year of the five year strategy;

e) The lump sum allocation for secondary schools be increased by £13,750 to £118,750 in 2014/15 as the first year of the five year strategy

f) Herefordshire, as one of the most rural counties in England, will include the DfE’s sparsity factor in the school funding formula for 2014/15;

g) The principle that sparsity funding should be phased in over the same five year period as the lump sums and the primary secondary funding ratio be approved;

h)

i Primary sparsity be determined by a pupil threshold of 105 pupils, a sparsity distance of 2 miles and a tapered lump sum of £14,000 as the first year of a five year strategy to increase to the tapered lump sum to £70,000 in equal instalments (model A);

ii Secondary sparsity be determined by a pupil threshold of 450 pupils, a sparsity distance of 450 pupils and a tapered lump sum of £14,000 as the first year of a five year strategy to increase to the tapered lump sum to £70,000 in equal instalments (model A);

i) The cost of sparsity should be phase specific so that the cost of primary sparsity is funded by the primary schools budget and the cost of secondary sparsity by the secondary schools budget;

j) The Notional SEN budget remains unchanged for 2014/15 at 6% of the lump sum, 6% of basic pupil entitlement, 100% of low prior attainment (as a proxy for SEN) and 40% of deprivation funding;

k) Schools gaining funding through the national funding formula have their gains capped in order to fund the statutory Minimum Funding Guarantee (MFG) protection to schools losing funding and the percentage used as the gains cap should as far as possible be the MFG percentage set by the DfE;

l) (i) funding for ethnic minority support, and free school meals administration be de-delegated;

(ii) the decision on the de-delegation of funding for Trade Union facilities should be deferred until January 2014 pending the outcome of the current DfE consultation on funding of trade union facilities;

m) That the provisional national school funding values be submitted to the Education Funding Agency by the deadline of 31 October marked “ pending cabinet member approval” as follows;

i Primary lump sum £99,000

ii Secondary lump sum £118,750

iii Basic entitlement per primary pupil £2,765

iv Basic entitlement per secondary (KS3) pupil £3,589

v Basic entitlement per secondary (KS4)pupil £4,518

vi Deprivation per Ever-6 FSM pupil £2,848

vii Looked After Children £1,300

viii Prior Attainment –primary (EYFSP 78 points) £228

ix Prior Attainment secondary £148

x English as Additional Language £405

xi Mobility £0

xii Split site costs £0

xiii PFI contract costs £190,000

xi Primary Sparsity – tapered lump sum £14,000 Distance 2miles

Threshold 105 pupils

Xii Secondary sparsity tapered lump sum £14,000

Distance 3 miles

Threshold 450 pupils

High Needs funding

n) The High Needs consultation proposals including

a. The Assessment matrix

b. The category weightings

c. The funding tariff

d. The implementation schedule

be approved in principle and that further work on the detailed consultation replies be considered by the High Needs working group and final proposals be reviewed by Schools Forum at the meeting in March 2014;

o) PRU funding – proposals for any minor adjustments to the PRU charges will be brought to the next BWG prior to Schools Forum in March 2014; and

p) SEN protection for small primary schools – that the existing scheme be amended as per the original proposal so that additional school expenditure on Band 3 & 4 pupils is limited to 3.0% per pupil (was 1.5% per pupil in 2013/14) to be funded from the High Needs Block.

b) in the interim, the funding formula values, as set out in Appendix 1 to the report, be submitted to the Education Funding Agency by the deadline of 31October marked “pending cabinet member approval” as necessary; and

(c) the Department for Education’s finalised Dedicated Schools Grant for 2013/14 and its allocation be noted.

The Forum considered the report of the Budget Working Group (BWG) on the following matters: response to consultation paper on introduction of high needs multi-tariffs and proposed national funding formula changes 2014/15; final Dedicated Schools Grant Allocation 2013/14; High Needs spending forecast; SEN Support Services; and Home to School Transport.

The Chairman of the BWG thanked members of the BWG, members of the High Needs Group and the Senior Finance Manager for their work. He reported that the BWG had carefully considered the options available, being mindful of the implications of their recommendations and the difficult considerations that some schools would face as a consequence. The BWG had sought to smooth the impact of change to the funding formula to give schools the opportunity to manage the consequences and plan ahead.

A Member of the Forum who had been invited to attend the Group’s meeting in September as an observer, having expressed some reservations about some of the proposals put forward to the Forum in July, commented that she had been reassured by the considered and fair way in which the Group had approached its task.

The Senior Finance Manager (SFM) reported that the consultation process had included a number of meetings with schools where the proposals had been almost entirely well received. In the written responses to the consultation there had been clear support for the proposals with the exception of the sparsity models where there had still been support for the BWG’s preferred model. The BWG considered that no evidence had been presented to suggest that the BWG should consider an alternative model.

The SFM commented that at the heart of the proposals was the intention to move incrementally part way towards the average primary/secondary funding ratio for the Authority’s family group over 5 years. This was to be achieved by an annual reduction in the Primary School lump sum which would be transferred to the Secondary School lump sum. The introduction of the national funding formula signalled that the DfE would not permit the current variations in funding ratios to continue. The proposals represented a package of measures intended to enable schools to move towards an average funding ratio at a pace of Herefordshire’s own choosing.

In relation to the printed recommendation l, on de-delegation, it was proposed that, as only de-delegation to Trade Unions was potentially affected by a DfE consultation on the funding of Trade Union facilities, the Forum should agree to dedelegate the two other elements encompassed by that recommendation.

RESOLVED: That

(a) the proposals for the local application of the funding Formula for 2014/15 as set out at Appendix 1 to the report, subject to an amendment to printed recommendation l, as reflected below, be approved for recommendation to the Cabinet Member – Children’s Wellbeing as follows: