/ Schools Forum / Item 8 /
/ 12 May 2011 /
/ Department for Education (DfE) Consultation paper – School Funding /
/ Report of the Director of Children’s Services and the County Treasurer /
Contact: Sarah Pook, 01962 847045, ; Thomas Whiffen, 01962 846287,
1
1 Summary
1.1 This paper contains proposed responses to the DfE consultations on Schools Funding for Schools Forum to agree after any necessary amendments.
2 Background and current system
2.1 On 13 April 2011 the Department for Education (DfE) launched the six week “Consultation on school funding reform: rationale and principles” which is attached as Appendix 1. Responses are required by 25 May 2011. This paper summarises the key areas for consultation and gives draft responses. Taking into account the views expressed in this consultation, the Department expect to publish further proposals for a 12 week consultation over the summer.
2.2 The main consultation paper is attached as Appendix 1. This report focuses on proposed consultation responses giving both the box being ticked and the comments.
2.3 As the first stage of a two-part consultation about reforms to school funding and the introduction of a fair funding formula. The Department says the current system, which is based on an assessment of pupil needs,
“is not flexible enough to respond to the changing characteristics
of pupils. Similar schools in similar circumstances can receive very
different amounts of funding due to the outdated system”.
2.4 The current two stage system has the following characteristics:
· Funds go from the DfE to local authorities as Dedicated Schools Grant (DSG)
· DSG allocations are based on the 2005/06 base position at each authority adjusted for ministerial priorities, inflation and changes in pupil numbers. It is known as Spend Plus
· At DSG level there is currently no age weighting
· DSG covers Schools’ delegated budgets, Early Years and Central Schools Budget items including SEN
· The amounts going to schools are the result of local decisions by Schools Forums and local authorities taking account of local priorities and local formulas, which have been the subject of consultation, using local data on both pupils and schools.
· The Young People’s Learning Agency (YPLA) aim to replicate the local formulas for Academies but use a version from an earlier year e.g .2010/11 academic year funding for Havant Academy started from the 2009/10 budget share formula and then the YPLA calculated Local Authority Central Spending Equivalent Grant (LACSEG) amounts are added to cover items not covered by the budget share.
3 The first four consultation questions around the need for reform
3.1 The DfE believe that the current system is:
· Opaque and complex;
· Unfair – leading to schools with similar intake receiving very different levels of funding;
· Fails to reflect need accurately; and
· Cannot support comparable funding for Academies, Free and Maintained Schools.
3.2 And that a future system would
· Distribute money in a fair and logical way
· Distribute extra resources towards pupils who need them most
· Be transparent and easy to understand and explain
· Support a diverse range of school provision
· Provide value for money and ensure proper use of public funds.
3.3 Question 1:
Do you agree with the stated characteristics of an ideal school funding system?
· Response “SOME. They are incomplete in that they do not include the importance of stability and predictability in the current financial climate, nor do they recognise the potential for internal inconsistency between fairness and simplicity.”
3.4 Question 2:
Are there further characteristics the system should have?
· Response “YES. It should be stable and predictable in a time of financial restrictions. It should be much clearer about the trade off between fairness and simplicity. It should recognise that need is multi-dimensional and so should have a modest number of needs indicators rather than just one.”
3.5 Question 3:
Do you agree with the analysis of how the current system falls short of these aims?
· Response “NO. The analysis fails to take full account of the way in which distributional factors between local authorities such as area cost adjustment, ethnic minorities and other additional educational needs and sparsity provide a differentiated context within which local formulas operate and affect the degree of variation perceived by schools and observers.
It also fails to recognise that any flat rate funding will have a materially different effect on per pupil values for schools at either end of the 100 to 200 pupil on roll group which features heavily in the exemplification of current inadequacies.”
3.6 Question 4:
Do you agree with the case for reforming the system?
· Response “ NOT SURE. We agree there is a case for reforming the system, but it is not the case made in the consultation which is advocating a mixture of enacting previous distributional reforms within a simpler national funding formula. This will not reflect the needs of Hampshire children and will result in significant turbulence in funding for Hampshire schools. It will also be important for any answers on area cost and other technical issues to be really transparent to all. ”
4 Two questions around deprivation and the pupil premium
4.1 There is expressed DfE concern that the current locally based treatment of deprivation funding in local formulas is neither identifiable nor consistent across all schools.
4.2 Question 5:
Do you agree that the aim of ensuring all deprived pupils get the same level of funding no matter where they live is the right one?
· Response “NO. If this means no reflection of any area cost adjustment in respect of higher labour costs areas it is surprising that the advantages and disadvantages of that proposition have not been set out in the paper.
It does reflect simplicity and would remove the current mixture of funding mechanisms for deprivation.
It does potentially confuse Additional Educational Needs (AEN) and deprivation and results in very clumsy binary measures of deprivation, excluding the complexities of deprivation that might result in very different communities and therefore will not properly reflect need.
It is noticeable that applying the free school meals only measure of deprivation, as in the Free Schools funding model, would lead to noticeable losses for most of the Hampshire schools with the greatest Special Educational Needs (SEN) and deprivation allocations and so its appropriateness comes under question.”
4.3 Question 6:
Do you agree the underlying funding formula needs to change to meet this aim more quickly and effectively?
· Response “NO. At a time of flat per pupil funding with the pupil premium it is difficult to agree with this when many keen pressures in schools related to inflation, school reform and local pressures and priorities are not being adequately funded. As an aspiration in a different funding climate it may be more attractive as a proposition.”
5 Four questions around a Fair Funding formula
5.1 In the White Paper -The Importance of Teaching the Government set out its long term ambition for a fair, national funding formula that would lead to clear and transparent funding for primary and secondary maintained schools and Academies. This would ensure that schools receiving similar intakes would receive similar funding levels. However, a key issue for individual schools is at what level should funding be decided, national or local?
5.2 Question 7:
Do you think the school funding system should be based on a purely national formula? Or should there be flexibility for local decisions about funding levels?
· Response “A LOT OF LOCAL FLEXIBILITY. Our view is that a two tier system with grant distributed to local authorities through a national funding formula and Local authorities and Schools Forum managing the local fair funding formula, with a very strong emphasis on immediate review and simplification of the local formulas is the best answer.
It is critical that there should be local formulas to ensure that local needs and priorities can be properly recognised. A national funding formula will not be able to reflect fully the needs of local communities and issues such as sparsity, small schools, turbulence from changing communities including military movements.
Furthermore a national formula for mainstream primary schools with different arrangements for both high cost SEN pupils and nursery provision will hardly be simpler or more transparent for those in more complex situations such as a primary school with both a special resourced provision and a nursery.
Another major concern about any national formula is around the future funding of some central schools budget items which relate to long term liabilities being funded centrally on behalf of all schools following explicit Schools Forum agreement. Particular examples in Hampshire are prudential borrowing done within the regulations which is in respect of invest to save capital schemes and central funding of the revenue costs of borrowing to fund equal pay claims in schools. These are costs that need to continue to be funded from schools grant and relate to liabilities over a number of years.”
5.3 Question 8:
If so, should that flexibility be limited, and if so how?
· Response “NO. Schools Forums work very effectively now to operate local flexibility for the schools in an area and are the best means of delivering and limiting any flexibility. Consultation with all schools also operates as an overall mechanism.
There will also be a continuing need for some central funding of longer term commitments such as prudential borrowing, equal pay liabilities and some other items which DfE expect to be treated in this way.”
5.4 Question 9:
If there is local flexibility, what should the roles in decision making be for :
local authorities?
· Response “They should work jointly with the Schools Forum for their area to reflect the pattern of local priorities and needs of pupils, the community and schools. They, together with Schools Forums, are able to bring the three strands together. As part of this they have a major role in ensuring value for money across the school system with the big issues being about home to school transport, SEN and other all school arrangements. This can only work if the funding system operates across the whole ensuring incentives and disciplines are in place for all those involved in decision making about education and school provision.”
Schools?
· Response “Schools should ensure that their representatives on Schools Forum provide an effective avenue for the exchange of ideas and concerns and heads and governors should be committed to responding when consulted on changes.”
and the Schools Forum?
· Response “As now, Schools Forums should have a major responsibility in owning the local fair funding formula and agreeing changes to it.
They might be given a fresh remit to simplify their formula within consistent guidelines to challenge more complex or unusual factors. They should also agree priorities for funding.”
5.5 Question 10:
If there is local flexibility for maintained schools, how should Academies and Free Schools be funded ?
· Response “TAKING ACCOUNT OF LOCAL DECISIONS. Schools Forums have academy representatives and should continue to do so to ensure the whole school community in an area is working together to deliver value for money solutions for pupils and learning. As such the local fair funding formula can be operated at a local level to deliver the budget shares for all schools, with academies and free schools receiving additional national formula elements to reflect their additional responsibilities.”
6 Three questions each on Special Educational Needs (SEN)and Early Years
6.1 DfE recognise that the funding for two of the key areas need handling outside of a national funding formula for schools - ‘High Cost’ pupils and nursery provision. The discussion on High Cost Pupils focuses on those with SEN and three questions are brought in from the SEN Green Paper consultation. Those are covered in the separate paper on this agenda and the agreed answers from that discussion will be included in the School Funding response.
6.2 The SEN questions:
· Question 11.How do you think SEN support services might be funded so that schools, Academies, Free Schools and other education providers have access to high quality SEN support services?
· Question 12. How do you think a national banded funding framework for children and young people with SEN or who are disabled could improve the transparency of funding decisions to parents while continuing to allow for local flexibility?
· Question 13. How can the different funding arrangements for specialist provision for young people pre-16 and post-16 be aligned more effectively to provide a more consistent approach to support for children and young people with SEN or who are disabled from birth to 25?
6.3 The Early Years Partnership Advisory Group (PAG) is meeting on the afternoon of 5 May 2011 to consider the Early Years questions and their views will be reported at Schools Forum’s meeting on 12 May.
6.4 Question 14:
How successfully has the EYSFF ( Early Years Single Funding Formula) been implemented? How might it be improved?
· Response – awaiting PAG views
6.5 Question 15:
How important is an element of local flexibility in free early education funding? What might alternative approaches look like?
· Response – awaiting PAG views
6.6 Question 16:
How should we identify the total amount of funding for early years and free early education for three year olds and four year olds not in reception from within the overall amount of 3-16 funding.
· Response “Any separation of early years funding from the rest of the current system should take account not only of what is currently covered by each single formula but also other existing costs such as the Early Years Inclusion officers and other centrally managed early years provision. It will also need to be sensitive to the Early Years provision in Special Schools.
This would suggest that probably a Spend Plus approach whereby all current relevant budget provision is identified and this is used as the starting point for a future per child allocation would be sensible. Great care will be needed around the SEN issues particularly in the light of the SEN Green Paper’s emphasis on Early Intervention.”