Children’s Services
Resources and Efficiency
County Hall
Martineau Lane
Norwich
Norfolk NR1 2DL
Tel: 0344 800 8001
Fax: 01603 223838
Minicom: 0844 800 8011
Email:
Website:
Your ref: / Please ask for: / Paul Fisher
My ref: / PF/MAH/2327 / Contact Number: / 01603 223464
Date: / 18 February 2010 / Email: /

Dear Chairman of Governors

2010/11 Budget Letter

This letter sets out the significant issues relating to the budget setting process for 2010/11.

Three areas are covered within this letter:

  • Factors covering the production of 2010/11 school budgets.
  • Budget guidance for setting 2011/12 and 2012/13 indicative budgets.
  • Proposals for additional support to schools during this period of financial challenge.

2010/11 Budget Production Issues

Since February 2008 when 2010/11school forecast budgets were issued, a number of significant issues have arisen which have hadto be reflected in the final 2010/11 school budgets which are now finalised.

These issues include:

  • actual pupil numbers being lower than the original forecast, resulting in a reduction in overall funding for Norfolk schools;
  • the level of committed costs, in particular, in relation to pupils with special educational needs being significantly higher than anticipated;
  • changes in policy, in particular the revised Pupil Specific SEN funding arrangements introduced in September 2009 and the introduction of the Single Early Years Funding Formula, which have increased financial commitments in 2010/11.
  • The deterioration of financial governance and management in a number of schools requiring the retention of contingency funding.

The actual pupil numbers in the January 2010 Census are expected to be 1812 less than the original Department for Children, Schools and Families forecast. This results in available funding being £7.4 million lower than originally anticipated.

The level of funding supporting pupils in non-maintained special schools is £1.6m higher than anticipated due to the increase in the number of such placements.

The change in the methodology for distributing Pupil Specific SEN funding from September 2009 has resulted in a projected £4.5 million increase in funding. This followed a £3.5 million increase in Pupil Specific SEN funding in 2009/10. This additional funding is all allocated directly to schools.

The introduction of a Single Early Years Funding Formula is expected to be an additional call on the Schools Budget of £700,000, including transitional support to maintained nursery classes within primary phase schools.

The last significant issue is the creation of a £500,000 contingency held to support schools in financial difficulty because of failings in the governance and management of school resources. The protocol for allocating this funding has yet to be agreed with the Schools Forum, but one of the conditions will be that financial delegation has been withdrawn from the governing body.

The reduction in the overall funding level and the additional funding pressures have resulted in a number of changes being needed. The result of these changes are as follows:

  • The existing funding level for the support of schools in areas of social deprivation will be maintained with onlylimited growth in 2010/11.
  • a 9% reduction in the performance and threshold formula allocations.
  • £2.3million additionalgrowth funding for personalisation – lower than in the forecast.
  • a pro-rata cut in all Pupil Specific SEN funding. The amount allocated for 2010/11 amounts to 90% of the previous unit of funding.

In addition to these adjustments to school allocations, the funding for centrally provided services e.g. behaviour and attendance partnerships, pupil referral units, etc. will have a nil cash uplift in 2010/11. These budget will therefore remain at 2009/10 levels in cash terms.

These changes will enable all schools to receive the minimum guaranteed funding increase per pupil of 2.1%.

However, following discussion with the Schools Forum it is clear that both short and longer-term action must be taken to stem the increasing pressure in the Pupil Specific SEN budget. If current trends were allowed to persist there will be over expenditure of approximately £2.5 million for which no provision has currently been made. Attached to this letter is an appendix which shows what work is underway to both keep Pupil Specific SEN funding within the approved budget and to return in 2011/12 to 100% funding of funding allocations.

Budget Guidance for 2011/12 and 2011/12

The financial future is uncertain. The Government has yet to announce funding arrangements for the next three year funding period of 2011/14. It is however clear that this period will undoubtedly bring with it significant financial constraints.

For this reason all schools are being instructed to construct 2011/12 and 2012/13 budgets on the assumption of a 2½% funding reduction in 2011/12 and a 5% funding reduction in 2012/13. This approach has again been discussed with and endorsed by the Schools Forum.

Period of Financial Challenges

The local authority recognises that the next few years will be a period of financial challenge and are in the process of engaging with partners during the next couple of months to identify how enhanced support can be provided to all schools to help minimise the impact of this period of financial constraint on teaching and learning of children and young people in Norfolk.

If you have any questions about matters set out within this letter please contact your Finance Support Officer in the first instance.

Yours sincerely

Paul Fisher

Assistant Director

Resources and Efficiency

cc Headteacher

2010/11 Budget Letter – Appendix 1

Actions to Manage the Pressures on the Pupil Specific Funding (Statements of SEN) Budget Area

Context

As outlined in the 2010/11 Budget Letter to schools from Paul Fisher (Assistant Director, Resources & Efficiency), there is significant budget pressure within the area of Pupil Specific Funding. Current forecasts illustrate an increase of £4.5million compared to previous assumptions of funding levels required. This means that the total funding required for SEN in mainstream schools (School Specific Allocation and Pupil Specific Funding) is now required to be approximately £34.5million, compared to the £30million outlined during the Autumn Fair Funding consultation process.

Analysis of this budget area by Children’s Services shows that during the autumn term 2009 there was a significant decrease in requests for statutory assessment (approximately 30% compared to the same period the year before). However, analysis also shows an increase in allocations of funding of Statements at 20+ hours and an apparent trend of requests following Annual Review to increase allocations from 15 hours to above the new 20+ threshold.

Below is a summary of the actions that are to be taken to manage this specific budget pressure, to both keep Pupil Specific SEN funding within the approved budget and to return in 2011/12 to 100% funding of allocations.

Actions Already Taken

  • A meeting between the Director of Children’s Services and Schools Forum representative took place on 10 February where this issue was discussed and a way forward agreed.
  • All Pupil Specific SEN funding decisions made at Single Area Panels (from 11 February 2010) should be treated as provisional and subject to moderation via a CountyPanel (first meeting scheduled for 19 February 2010 and school representation to be confirmed).
  • Funding allocations will only be communicated to parents and schools within correspondence as part of the Proposed Statement or Proposed Amended Statement process, as defined within the SEN Code of Practice – and not via telephone communication as has been recent practice.
  • In order to manage this increase the Budget Letter from Paul Fisher outlined a number of actions (agreed with the Schools Forum) included in the 2010/11 budgets which are now finalised. These include:

The existing funding level for the support of schools in areas of social deprivation will be maintained with only limited growth in 2010/11.

a 9% reduction in the performance and threshold formula allocations.

£2.3million additional growth funding for personalisation – lower than in the forecast.

a pro-rata cut in all Pupil Specific SEN funding. The amount allocated for 2010/11 amounts to 90% of the previous unit of funding.

Next Steps

Despite these immediate actions an estimated £2.5 million funding pressure within Pupil Specific Funding remains. We, therefore, need to ensure that we can work towards bridging this gap and preventing any further breach of the SEN funding available. We are taking the following action:

  • Analysing existing increased funding allocation to identify trends and causes of increased levels of funding.
  • Improving the focus on Annual Reviews to ensure that support levels remain appropriate, with a particular expectation that lack of progress may need different support rather than more support and that where progress is sustained reductions in support should be offered by schools.
  • Developing a funding matrix with a particular focus on the expectations regarding support levels of 25 hours and above, ie children and young people who require all elements of the curriculum supported plus unstructured parts of the day require this level of funding, most children do not.
  • Children’s Services conference based around the Lamb Report recommendations to consider challenges and opportunities within the SEN/LDD area, including the implications for the implementation of parent and pupil guarantees and the context of the Aiming High for Disabled Children agenda. The Lamb Report and expected action plan / recommendations from government provide a good opportunity for us to reconsider if our current SEN ‘system’ is likely to improve outcomes within a sustainable funding context
  • Undertaking pre-work for an Autumn Fair Funding consultation on further changes to the School Specific Allocation / Pupil Specific Funding scheme.
  • Working towards reinstating 100% funding allocations from April 2011.

Justification for these Urgent Actions

  • The Dedicated Schools Grant, ie all school money, cannot sustain Pupil Specific Funding at this level now or in the future
  • Any Pupil Specific Funding increases, ie overspend, will be the first call on the budget the next year, ie impact on your school mainstream budget

Pupil Specific Funding should be focussed on children with significant, complex and enduring special educational needs and where this money has enabled a young person to progress we must ALL acknowledge this (and support parents to do so) and where appropriate release funding to be recycled to help those children that need it most.