Appendix 2 - School Funding Changes for 2014-15

Briefing Note

This briefing note summarises the changes for 2014-15 and the impact for Cumbria County Council.

The changes for 2014-15 are set out in the table below. The most significant changes for Cumbria County Council are highlighted in bold.

Change for 2014-15 / Impact for Cumbria County Council
Overall Change:
Pupil-Led Funding
Local Authorities will be required in 2014-15 to allocate a minimum of 80% of delegated schools block funding through an appropriate and locally determined combination of the pupil-led factors (AWPU, deprivation, low cost high incidence SEN, looked after children, English as an additional language and mobility). / Minimal impact – in 2013-14, Cumbria County Council allocated 89.67% of delegated schools block funding through the pupil led factors. However, the revision to the arrangements for the lump sum (see below) may affect the balance of funding through the pupil-led factors and modelling work will need to consider this.
Schools Block Funding Formula – Factors:
AWPU
Local Authorities will be required in 2014-15 to set an AWPU rate which is at least £2,000 for primary and at least £3,000 for Key Stage 3 and Key Stage 4. / Minimal impact – in 2013-14, Cumbria County Council’s AWPU rates were:
Primary £3,398.54
Key Stage 3 £3,874.33
Key Stage 4 £4,791.94
The indicative AWPU rates for 2014/15 are also above the threshold set by DfE.
However, the revision to the arrangements for the lump sum and also the introduction of a sparsity factor will affect the value of the AWPU. This will need to be accounted for in the modelling work undertaken.
Low Cost High Incidence SEN
For primary schools, in 2013-14, low cost high incidence SEN was based on achievement by pupils in the Early Years Foundation Stage Profile. This will continue for 2014-15, however, due to the new EYFSP framework, ‘low cost high incidence SEN’ will be based on pupils who have not achieved a good level of development within the EYFSP including all those who have not achieved the expected level of development in all 12 prime areas of learning as well as maths and literacy. For pupils who sat the EYFSP under the old framework, ‘low cost high incidence SEN’ will continue to be based on failing to achieve either 73 or 78 points.
For secondary schools , in 2013-14, low cost high incidence SEN was based on pupils who failed to achieve a level 4 or higher in English and Maths at Key Stage 2. For 2014-15, this will be extended to pupils failing to achieve a level 4 or higher in English or Maths at Key Stage 2. / Minimal impact – all data for the low cost high incidence SEN factor is provided by the DfE. Allocations to individual primary schools may be affected due to the changes to the EYFSP framework.
It is expected that the allocations for secondary schools will be spread more thinly as more pupils will be captured by the factor in 2014-15 (DfE anticipate that an additional 11% of pupils will be captured by the factor). However, in 2013-14, only 2.1% of delegated schools block funding was allocated through the low cost high incidence SEN factor for both primary and secondary schools in total.
Deprivation
There is no change to the allowable indicators for deprivation for 2014-15 to those available for use in 2013-14 (Free School Meals; Free School Meals Ever 6 or IDACI).
Local Authorities and Schools Forum are asked to determine locally an appropriate proportion or quantum of their schools block funding to be allocated through the deprivation factor. / No impact for 2014-15
Looked After Children
Local Authorities that use the looked after children factor will be required in 2014-15 to use a single day or more measure (children who have been looked after for at least 1 day) for primary and secondary schools / No impact for 2014-15 – Cumbria County Council used the single day or more measure for its looked after children factor in 2013-14.
Mobility
The application of the optional mobility factor will be changed to ensure that it only supports schools which experience a significant change in their pupil numbers in-year. In 2014-15, a 10% threshold will be applied to the mobility factor – only schools with mobility above 10% of the pupil count will be eligible for mobility funding and these schools will only receive funding for the percentage of pupils above 10%. In 2013-14, there was no threshold for mobility – all schools which had some mobile pupils were eligible for mobility funding. / Small impact – Cumbria County Council allocated £100,000 through the mobility factor in 2013-14. Following the application of the 10% threshold, less schools will receive the mobility funding, and accordingly each eligible school will receive more funding for mobility should the quantum of mobility funding remain the same.
Sparsity Factor
This is a new optional factor for 2014-15. This is based on the distance pupils live from their second nearest school. In rural schools where schools are few and far between, pupils could face the choice of attending their nearest school or travelling a long way to their second nearest. In some cases, the distance to their second nearest school may be unacceptably long, putting a premium on ensuring that the pupil’s nearest school stays open. The sparsity factor enables additional funding to be targeted to support these schools where per pupil funding alone may not be enough to ensure their viability.
The DfE will calculate a ‘sparsity distance’ for all schools and provide this data to each local authority. The sparsity distance is calculated by identifying the number of pupils within a school for which that school is their nearest school. For each pupil for which the school is their nearest school, the distance that this pupil lives from their second nearest school (which includes faith schools but not selective schools (such as grammar schools)) will be measured using crow flies distances. The average of these distances will then be calculated to give the average ‘sparsity distance’ for the school.
The Local Authority will then have the flexibility to:
-  Decide the sparsity distance above which schools become eligible for sparsity funding but this must be at least 2 miles for primary, middle and all through schools, and at least 3 miles for secondary schools
-  Decide on the size of school that is eligible for sparsity funding, as long as it is no higher than 150 pupils for primary schools and 600 pupils for secondary schools.
-  Allocate up to a maximum of £100,000 per eligible sparse school either as a single lump sum or tapered amount related to school size.
As crow flies distances are being used, local authorities are able to make exceptional applications for schools that are sparse but have been excluded from the sparsity measure because the relevant road distance to the second nearest school is significantly higher than the distance as the crow flies. Exceptional applications must be agreed by the Schools Forum and submitted to the Education Funding Agency for approval. / Significant Impact. There is considerable work for the Local Authority to undertake here in terms of deciding on distance thresholds and size of schools eligible for sparsity funding; deciding on what the maximum value of sparsity funding should be per school and whether this should be a single lump sum or tapered by school size. The Local Authority will also need to identify schools where an exceptional application may be required especially given the geography of Cumbria and the inadequacy of crow flies distances in relation to this.
Lump Sum
For 2014-15, the maximum lump sum that can be allocated is £175,000 (in 2013-14 the value of the lump sum was capped at £200,000). This is to ensure that more money is allocated through the pupil-led factors and genuinely follows pupils.
For 2014-15, local authorities can have a separate value lump sum for both primary and secondary schools, providing each is capped at a maximum of £175,000. (In 2013-14, all schools had to have the same size lump sum). The lump sum cannot be varied according to the size of a school.
Where two schools are merging, the combined school will retain 85% of the two lump sums for the next full financial year following the year in which the schools merge. The 85% level can be lowered in exceptional circumstances. (In 2013-14, this arrangement was not possible and for example, where two schools merged, the lump sum in relation to 1 school would have been lost). / Significant Impact. Modelling undertaken by the Local Authority for the DfE fieldwork visit identified the potential of a separate lump sum for primary and secondary schools in terms of reducing the budget turbulence for schools. There is considerable work for the Local Authority to undertake here in terms of deciding on separate values of lump sums for primary and secondary schools, and any impact that this would have on the AWPU and the choice of value for the sparsity factor.
The arrangements put in place for amalgamating schools will impact any savings to the global schools budget identified as a result of school mergers.
Other Changes:
Schools with Short Term Falling Rolls
Local Authorities will be able to top-slice their DSG funding to create a small fund to support schools with falling rolls in exceptional circumstances. This fund is not intended to support schools which have falling rolls because they are unpopular or low quality and the fund is restricted to schools considered to be either good or outstanding by Ofsted. The Local Authority will need to develop the criteria and amount to be allocated to schools, which must be agreed by the Schools Forum and applied fairly to Academies and maintained schools. / Significant Impact. The Local Authority will need to determine, in agreement with the Cumbria Schools Forum, whether such a fund would be appropriate for Cumbria, and what the criteria would be for allocating funding for schools.
Schools Forum
In 2014-15, all Schools Forums will be required to have one elected representative from an institution (other than a school or Academy) providing education beyond 16 (but may also be providing education for 14-16 year olds) . This will replace the current requirement for a representative from the 14-19 partnership. / Minimal Impact. The election of a post-16 representative for the Cumbria Schools Forum can be arranged.
High Needs Funding:
In 2013-14, the DfE strongly recommended that local authorities should delegate sufficient funding for schools to be able to pay for costs of additional SEN support up to a threshold of £6,000. For 2014-15 this will become a mandatory requirement. As for 2013-14 , there will be the flexibility to make additional allocations outside the formula, from the high needs budget to schools that have a disproportionate population of pupils with high needs. / Significant impact. For 2013-14, the Council Cabinet decided not to implement the DfE’s recommendation for schools to provide the first £6,000 of additional SEN support and rather to continue to allocate funding to schools on the basis of statements. Modelling showed that when additional funding was allocated through the schools funding formula to allow schools to meet the first £6,000 of additional SEN support, this funding did not correlate with the placement of high needs pupils. The mandatory requirement for 2014-15 may mean significant budget turbulence for schools.

Minimum Funding Guarantee

The document confirms that a minimum funding guarantee of -1.5% per pupil will be in place for 2014-15 and that this will be calculated on the same basis as in 2013-14, although the sparsity factor, if used, will be excluded from the minimum funding guarantee calculation as it is not a ‘per pupil’ amount. There is no further detail about the percentage level of the minimum funding guarantee for 2015-16 and beyond. The Operational Guidance document states that this is subject to the outcomes of the spending review (26th June).

Helen Hamilton

Finance Manager – Schools and Learning

4th June 2013