To consider matters regarding music services.

To follow

(This item was considered in advance of the item Dedicated Schools Grant 2011/12 – Budget Consultation)

(Mr P Box and Mr A Shaw declared interests.)

The Forum considered alternative options for providing Music Service provision in the authority, due to the combination of charging rates and the reduction of Local Authority and central Government funding.

The Assistant Director: Improvement and Inclusion (ADII) commented that the Music Service had run with an operating deficit for a number of years.  Charges to schools had not been sufficient to meet costs.  The resulting overspend had been funded by savings in other areas of the Children’s Services budget.  However, at the end of 2008/9 it had been decided that this position could not continue and funding for the annual overspend had ceased resulting in an accumulated deficit.  Efforts had been made to continue to deliver the service and reduce costs but the point had now been reached when the current model of provision was not sustainable and a new model had to be found. Because the charges did not cover costs the service was in the position that the more tuition hours the service provided the worse the accumulated deficit became. It was hoped that the Forum and the Authority could agree on a joint vision for the service and jointly solve the financial position.

The Head of the Music Service (HMS) presented the report.  He reiterated that if no alternative approach were agreed the music service would have to close.  He commented on the adverse effect this would have, emphasising the impact of a loss of a cohesive approach to music education across the County.

The report set out five operating models, a proposal that the Forum contribute to meeting the deficit and also the option of closure.  A financial options appraisal was circulated showing the costs associated with the five operating models and closure. 

The five operating models were:

Option 1 - Raising the hourly rate charge to schools.

Option 2 - Changing the pay and conditions of peripatetic staff to Herefordshire Council pay scale.

Option 3 - Accredited teacher scheme

Option 4 - Non Accredited teacher Scheme

Option 5 - Externalising/Contracting out the Music Service

The Head of the Music Service (HMS) commented on each of the options in turn elaborating on the detail of each option as set out at paragraph 27 of the report and as also described in the staff consultation paper appended to the report. 

Whilst the formal staff consultation was to close on 3 March he informed the Forum that the majority of staff favoured the third option – the accredited teacher scheme and this was also his own preferred option.  A successful version of this scheme was being operated cost effectively by Derbyshire County Council.

The Accredited Teacher Scheme offered a cohesive approach under which Schools would be able to choose Music teachers, who would be self-employed, from an accredited list.  This would provide assurance to schools which option 4, a non-accredited teacher scheme, would not.  However, it would be necessary as part of the accredited teacher scheme for schools all to agree to pay the same price as each other for lessons. The proposed cost of lessons would be £25-29 per hour, slightly above the independent sector rate reflecting mileage costs.  Option 3 would also deliver a £40k saving in management costs.

The interim Director acknowledged that there was an interrelationship between the preferred model the Forum were being asked to identify and the decision on financing a model the Forum was being asked to take, and that the timing was complicated given that the consultation had not yet formally concluded.  However, timescales were such that an opinion was needed from the Forum at this stage to assist the Council in making its decision on the future of the music service.

In discussion the following principal points were made:

·         That whilst the benefits of music tuition were recognised, it was plain that the current business model was flawed. 

·         Clarification was sought on expenditure by the Music Service.  The HMS commented that the percentage of the budget spent on administration was 0.5% below the average and the percentage spent on management was 3% above the average compared with other local authority music services.  He considered that this was good for a rural authority.

·         The cost of lessons was considered.  The HMS said that the average price for lessons provided by 9 local authority music services in the West Midlands was £38.37 in primary schools and £36.70 in secondary schools.  The independent sector charged £25-26 per hour.

·         The pay rates for peripatetic staff were discussed.  It was noted that the policy had been that staff who were not qualified teachers (2/3 of staff) were paid on the pay spine for qualified teachers. 

·         It was asked what guarantees there were that the Forum would not be asked to increase the proposed £25k per annum contribution.  The HMS replied that no guarantee could be given at the moment because funding for the Service from 2012/13 on had not been agreed nationally.  He had based his calculations on a 25% funding reduction  (see para re effect not so significant).

·         That Wigmore High School had withdrawn from the County Music Service Scheme on grounds of cost and quality and was operating an accredited scheme locally.  The numbers of pupils taking up tuition had increased which suggested the service was of the requisite quality.

·         All of the options involved redundancy costs.  The interim Director of Children’s Services confirmed that the proposal that the Forum make a contribution to meet these costs did not set a precedent.  The music service was a schools service which could be funded through the Dedicated Schools Grant (DSG).  In a number of authorities the music service was funded entirely through DSG.

·         In options 2-5 the redundancy costs amounted to £350k.  It was asked why taking on such a burden was being contemplated instead of simply increasing the charge for lessons based on the existing model.  The offer to staff was one of dismissal and then being offered the opportunity to do the same job as they had previously been doing for significantly less money.

In reply it was confirmed that the changes in terms and conditions being proposed could not be agreed by negotiation and that if options 2-5 were pursued, staff would have to be made redundant.

The ADII commented that the Directorate was not willing to continue to support the inequitable terms and conditions within the existing model.

·         It was noted that if several schools were to opt out of the County service under the accredited teacher model this would not affect the sustainability of the service because the pool of self-employed staff would simply reduce.

·         That an accredited scheme would be the best way of seeking to ensure that as many pupils as possible had the opportunity to benefit from music tuition, in contrast to a fragmented system.  A co-ordinated service would also be best placed to take advantage of any opportunities arising from the national changes due to take place following the Henley Review of music education which, amongst other things,, proposed the introduction of music hubs in 2012 with local authority music services taking the lead role.

·         Asked what would happen if the Forum declined to contribute to the accumulated deficit the Interim Director commented that the Council’s own budget was under significant pressure and a view would have to be taken on the extent to which  the provision of the music service should be viewed as a priority when compared with other competing priorities.

The Schools Finance Manager advised the Forum that the viability of Option 3 was dependent upon HM Revenue and Customs confirming that peripatetic music staff would qualify as having  self-employed status.

The Chairman invited members of the Forum to indicate support for each option for future delivery of the music service in turn.  The only model for which any support was expressed was option 3.

RESOLVED:

That (a)        the Authority be advised that the Forum considers option 3 the accredited teacher scheme to be the preferred option for a new model of business for the music service from September 2011;

         (b)        a one-off grant for £190,000 or part thereof to clear the accumulated budget deficit be not supported;

         (c)        an annual contribution of £25,000 be made towards the deficit with the annual contribution to be reviewed after 5 years; and

         (d)        the suggested one-off contribution towards the remaining accumulated deficit of £59.5k identified in the financial options appraisal for option 3 be rejected.