To receive an update from the schools finance manager on national developments in schools funding and activities of the budget working group since the previous meeting.

The Schools Finance Manager provided an update on national school funding issues, key points noted were:

·         DfE had indicated that the outcome of the spending review was likely to be late and that any information on changes to the national funding formula were unlikely to be known until December;

·         The advice was to carry on with current arrangements for 2020/21;

·         Some local authorities had historic spending commitments which the DfE were looking to phase out and would then distribute this funding via a formula, Herefordshire had no such historic spending commitments and could benefit if and when this was put in place;

·         There had been no news about funding of future pay awards and pension increases, the DfE had committed to fully fund minus 1% for the 2018/19 pay award but nothing further.

With the guidance from the DfE in mind, the consultation paper for Herefordshire schools budgets for 2020/21 would be based on carrying forward the 2019/20 arrangements. The approach would be updated if further information came forward.

The SFM updated forum members on the work of the Budget Working Group since the previous meeting as follows:

·         The DSG outturn for 2018/19 showed a £531k underspend at the end of the year, largely due to the additional government grant of £380k for high needs which was not planned in spending commitments; if that grant had not been received there would have been a £66k overspend in the high needs block and a smaller underspend overall;

·         With the surplus from 2018/19 added, reserves stood at £2.5m of which £0.8m was committed to support early years projects;

·         De-delegation arrangements for local authority schools had been reviewed as requested and the working group was broadly content with the current arrangements, there was likely to be a small reduction in cost per pupil of the trade union de-delegation to better reflect recent actual costs;

·         The budget consultation for 2020/21 would include the de-delegation arrangements as it did every year and would reflect the feedback from the working group, all schools would be able to give their views through the consultation;

·         The chair of the working group stated that there had been a long discussion on the current de-delegation arrangements and that overall the group felt the position was fair and that local authority schools were not losing out;

·         A draft scheme was being drawn up by the SFM for allocation of the growth pot funds, this would be included in the consultation paper in the autumn for schools to give their views;

·         Latest forecasts showed the high needs block should remain in surplus through to March 2022 on the assumption that additional funding from the DfE was continued and that modest transfers from the school block growth pot were approved.

The SFM reported on an exercise to compare Herefordshire’s current DSG position with that of statistical neighbours. The review was based on unaudited published accounts but showed that a number of councils in the group had significant deficits while other councils had provided additional funding to prevent deficits. It was concerning how quickly some councils had moved from a surplus to a deficit and this emphasised the need for careful and continuous monitoring of the schools budget. Where councils were in deficit by more than 1% they would be required to submit a recovery plan to the DfE. The SFM would review such plans to understand the causes of these deficits and what lessons Herefordshire could take forward.