To receive the report of the Budget Working Group on the following topics:

·         Special school funding;

·         National school funding formula consultation draft response;

·         Education services grant transitional funding;

·         High needs budget proposals for 2017/18 and the impact on the early years hourly rate for 3 and 4 year olds;

The chairman of the budget working group was unable to attend the meeting and had submitted written comments. In his note he thanked the schools finance manager and the clerk to the meeting for facilitating the working party and thanked the members of the budget working group for their hard work in the previous two meetings, which had been very detailed and focused. He also thanked the head teachers of the special schools for sharing their information with the group.

 

The schools finance manager briefed the meeting on the activities of the budget working group as set out in the report. The following key points were highlighted.

 

Special School Funding

 

An independent report had been commissioned from Mr Mark Whitby of Acuity Education to determine if the funding received by Herefordshire special schools was fair compared to statistical neighbours and if the expenditure on staffing was reasonable compared to other special schools.

 

The final version of the report had been received and was unchanged from the draft which had been circulated with the agenda papers. The special school heads had accepted the report as accurate and helpful.

 

The schools finance manager highlighted the benchmarking tables on pages 25 to 27 of the agenda pack to be particularly helpful in setting the situation in each school in context. Benchmarking for Brookfield had been difficult due to lack of comparator data.

 

The conclusion of the report was that Barrs Court, Blackmarston and Brookfield received reasonable levels of income but that Westfield had a low level of income per pupil compared to statistical comparators. It was intended that the low funding allocated to Westfield be investigated further.

 

Mrs Bailey thanked the budget working group for allowing the special school representatives to attend the meetings. She commented that the original data used in the report had been captured prior to a restructure at Blackmarston and that updated data had been submitted. She also noted that statistical comparators were not always the same category of school. The special school representatives had been pleased to meet with Mr Whitby and supported his judgements that the level of funding to the special schools was reasonable.

 

It was resolved that:

 

the conclusions of the independent review of special schools funding as set out by Mr Whitby in his report be endorsed and in particular that the low funding allocated to Westfield school be investigated further.

 

National School Funding Formula

 

The schools finance manager briefed the meeting on the proposed joint local authority and schools forum response to the DfE stage 2 consultation. The response was due by 22 March 2017.

 

Letters had been sent to the county’s two MPs highlighting the council’s concerns over the proposed national formula and other schools funding issues. The letters were identical except for the example schools used, which were selected from the relevant constituency. The local authority would continue to lobby for support from the county MPs. Individual schools were encouraged to make their own representations.

 

The schools finance manager confirmed that the local authority response would be shared with all schools and he encouraged schools to respond individually to the consultation, highlighting their own circumstances.

 

In running through the draft response the following points were made:

 

·         stakeholders of small schools may not agree that a teaching head is a luxury, the decision to recruit a teaching head should be based on local data and circumstances, different models of leadership should be reflected in the response

·         schools should make their own responses to the consultation and personalise the response to their own situation

·         the F40 group had constructed a detailed model to show that a lower rate of funding for additional needs factors was appropriate, most schools serving deprived communities in Herefordshire lose money despite higher funding for additional needs

·         the lump sums used historically in different authorities were very different, moving to a single national figure would inevitably be difficult given the different starting positions

·         there was a lack of evidence in the DfE paper as to how the lump sum figure had been arrived at

·         it was suggested that the lump sum should cover a schools fixed costs and that the lump sum should be stepped to take account of different sizes of school, however this was not universally supported

·         larger schools may struggle to sustain support to smaller schools through federations or MATs if their funding drops

·         sparsity factor needed to be considered alongside the lump sum

·         that Herefordshire had been proactive historically in making savings, retaining high levels of delegation to schools and maintaining budget discipline by ring-fencing the three funding blocks

·         the area cost adjustment threw up significant inequalities between similar schools in different local authorities, while there were some acknowledged differences in costs between areas the adjustments proposed were not felt to be fair and reasonable

·         the wording of the response would be updated in light of comments received during the meeting

 

Chris Lewandowski gave details of the impact of the area cost adjustment on two example Herefordshire schools if they were moved to other local authority areas. The full detail of this would be circulated with the minutes of the meeting.

 

Resolved that:

 

subject to comments made by forum members, the draft response to the DfE consultation on the national school funding formula be approved for submission to the DfE by the 22 March closing date.

 

Response to high needs funding consultation

 

The schools finance manager gave a verbal update on the proposed response to the high needs consultation. He noted that little work had been done on this so far as the F40 group had been focussed on the mainstream funding consultation.

 

Herefordshire would gain by about 3% under the proposed formula. The background to the formula was very technical and included a 50% historic spend factor and elements for population, income deprivation, free school meals, disability living allowance and children in bad health.

 

It was proposed that the schools finance manager, together with the head of additional needs and the assistant director commissioning and education finalise a response for submission. The Herefordshire response would be based on the F40 group response, a draft of which had just been received.

 

Resolved:

 

that the response to the high needs formula consultation be based on the f40 draft and finalised by officers prior to submission to the DfE.

 

ESG transitional funding allocation

 

The schools finance manager reminded forum members that at the meeting in January 2017 the issue of how to allocate the £372k of ESG transitional funding had been discussed. It had been agreed to allocate £210k to an exceptional redundancy reserve and to allocate £50k for school improvement work for the period April 2017 to August 2017. This left £112k to be allocated.

 

It had been suggested that this funding could be used to fund the apprenticeship levy for those schools required to pay in in 2017/18. The council had felt that other options should be considered which might deliver better value and longer term impact.

 

The schools finance manager outlined a package of measures proposed to be funded from this one off grant:

·         £20k for HR / payroll IT system improvements, the SLA for 2018/19 would be frozen due to the efficiencies delivered giving an ongoing saving to schools

·         £20k for improvements to the IT system for processing of SEN payments, again SLA costs would be frozen or reduced for 2018/19

·         £55k to bring forward the planned savings from the Kielder Centre a year early, allowing this funding to be released in the high needs block

·         £17k to fund a review of tariffs in Westfield school resulting from the independent review of special school funding.

 

The final package of allocations relating to the ESG transitional grant funding would require approval by the cabinet member for young people and children’s wellbeing.

 

Resolved that:

 

The proposals for the allocation of the ESG transitional funding of £372k be recommended to the Cabinet Member for Young People and Children’s Wellbeing as follows:

a)    Exceptional redundancy reserve, £210k

b)    School Improvement for the period April 2017 to August 2017, £50k

c)    HR / payroll improvements, £20k

d)    Improvements to SEN payments computer system, £20k

e)    Bring forward savings from Kielder Centre from 2018/19 to boost high needs block funding in 2017/18, £55k

f)     Cost of undertaking the tariff review costs – up to £17k

 

High Needs Budget 2017/18

 

The schools finance manager referred the members of the forum to the detailed budget set out on pages 59 to 60 of the agenda pack. Changes from 2016/17 were generally related to cost pressures and tidying up.

 

The budget working group had considered whether high needs tariffs paid to early years children should continue to be paid from the high needs block or from the early years block. DfE guidance allowed either approach. Moving these costs to the early years block would have released a further £130k to increase high need tariffs. There had been extensive discussion on the issue but the budget working group considered that the principle of maintaining the ring-fence around each funding block was important. The recommendation of the group was therefore that the high needs block continue to fund early years high needs tariffs.

 

A further proposal had been considered by the budget working group to fund an outreach service using special school staff to support mainstream schools. The group acknowledged that there was insufficient funding to deliver everything and decided not to recommend any funding for outreach in the 2017/18 budget. This item could be reconsidered for the 2018/19 budget.

 

The remaining funds in the high needs block were recommended to be used to uplift the tariffs.

 

Resolved that:

 

the Cabinet Member for Young People and Children’s Wellbeing be asked to approve the following :

a)    the integrity of the three funding blocks remains a key principle and the early years block should not take on additional high needs costs currently funded from the high needs block;

b)    the remaining £243k of high needs funding be allocated as follows:

i.              £50k be reserved to meet the cost of any tariff amendments arising from the review at Westfield and the other special schools; and

ii.            £193k be allocated to increase the tariffs (rounded) as follows:

Tariff A: £1,360 (+£50)

Tariff B: £3,340 (+£90)

Tariff C: £5,700 (+£200)

Tariff D: £9,170 (+£540)

Tariff E: £12,950 (+£550)

Tariff F: £17,260 (+£470)

 

 

The chairman thanked the budget working group for their hard work in considering these issues and considered that the outcome was a fair reflection of all parties interests.

 

Summary of recommendations agreed

 

It was resolved that:

 

a)    the conclusions of the independent review of special school funding as set out by Mr Whitby in his report be endorsed and in particular that the low funding allocated to Westfield school be investigated further;

b)    subject to comments made by forum members, the draft response to the DfE consultation on the national school funding formula be approved for submission to the DfE by the 22 March closing date; and

c)    the response to the high needs formula consultation be based on the f40 draft and finalised by officers prior to submission to the DfE.

 

d)    The proposals for the allocation of the ESG transitional funding of £372k be recommended to the Cabinet Member for Young People and Children’s Wellbeing as follows:

a)    Exceptional redundancy reserve, £210k

b)    School Improvement for the period April 2017 to August 2017, £50k

c)    HR / payroll improvements, £20k

d)    Improvements to SEN payments computer system, £20k

e)    Bring forward savings from Kielder Centre from 2018/19 to boost high needs block funding in 2017/18, £55k

f)     Cost of undertaking the tariff review costs – up to £17k

 

e)    The budget working group recommends to the schools forum that the Cabinet Member for Young People and Children’s Wellbeing be asked to approve the following :

a)    the integrity of the three funding blocks remains a key principle and the early years block should not take on additional high needs costs currently funded from the high needs block;

b)    the remaining £243k of high needs funding be allocated as follows:

i.              £50k be reserved to meet the cost of any tariff amendments arising from the review at Westfield and the other special schools; and

ii.            £193k be allocated to increase the tariffs (rounded) as follows:

Tariff A: £1,360 (+£50)

Tariff B: £3,340 (+£90)

Tariff C: £5,700 (+£200)

Tariff D: £9,170 (+£540)

Tariff E: £12,950 (+£550)

Tariff F: £17,260 (+£470)