AGENDA ITEM 6

POOLE SCHOOLS FORUM

14 OCTOBER 2015

DEDICATED SCHOOLS GRANT (DSG)

BUDGET MONITORING 2015-16

DRAFT BUDGET AND MAINSTREAM SCHOOLS FUNDING FORMULA 2016-17

  1. PURPOSE OF THE REPORT

To Provide:

1.1.DSG budget monitoring for 2015-16.

1.2.Progress in setting the DSG Budget for 2016-17

1.3.Proposals for the mainstream school funding formula for 2016-17.

  1. DECISIONS

2.1.To note the budget monitoring information for 2015-16 and the initial draft budget for 2016-17.

2.2.School members only (Headteachers, Governors and Early Years Providers) are to agree that the draft mainstream school formula for 2016-17 remains unchanged as detailed in Paragraph 5 and Appendix 4, for submission to the EFA by 31 October 2015.

  1. DSG BUDGET MONITORING 2015-16

3.1.It is estimated that only £214,000 of DSG reserves will be used against a budget of £747,000, a net reduction in use of reserves of £533,000. This is mainly due to:

  • Forecast additional DSG income for 3 & 4 year olds of £239,000 releasing the reserves allocated to support the 5% base rate uplift in the Early Years Single Funding Formula (EYSFF).
  • An estimated £134,000 committed to the Early Intervention project is expected to be carried forward for summer term provision of financial year 2016-17 to complete the academic year 2015-16.

3.2.The detail of the DSG Budget for 2015-16 is included in Appendix 1. A summary of budget variances is included below.

Table 1: DSG Budget Variances 2015-16

Budget Area / Overspend/
(underspend)
Expenditure Variances
Provision 2 year olds reduced (fewer children) / (477)
Provision 3 & 4 year olds / (28)
Schools business rates and DfE licences / (55)
Early Intervention for summer 16 to be carried forward / (134)
SEN (net of contingency) / (27)
Total Expenditure Variance / (721)
Funding Variances
Reduced DSG for 2 year olds (fewer children) / 427
Increased DSG for 3 & 4 year olds (more children) / (239)
Reduction in budgeted use of reserves* / 533
Total Funding Variances / 721

*£134,000 remains committed to 2016-17

3.3.The above monitoring assumes that the Early Intervention project agreed at the June 2015 meeting will be successful with expenditure for the education of excluded pupils at the Quay School being contained within the budget allocation. The Quay School report on the Agenda provides further details of the progress made to date.

3.4.The expenditure and funding budget for 2 year old provision was set at the level of the government’s target take up for 2014-15. Although this take up level has not been achieved, Poole has still performed well compared nationally.

  1. DSG DRAFT BUDGET 2016-17

4.1.DfE announcements for the DSG 2016-17 were made at the end of July 2015. There are no significant changes from 2015-16 in the operational guidance or detailed workings of the mainstream school formula, early years formula or central budgets.

4.2.A draft DSG Budget for 2016-17 is included in Appendix 1 alongside the 2015-16 budget monitoring as a guide to expected funding and expenditure levels.

4.3.Draft Funding

4.3.1.Early Years Block - the unit of funding will be confirmed in the December Settlement. An increase in the unit value for 3 & 4 year olds is considered unlikely for Poole but some uplift for 2 year olds is expected.

4.3.2.Schools Block – the unit of funding is unchanged from 2015-16 so funding will change only according to pupil numbers at the October 2015 census and will not reflect any change in pupil data since October 2013. The DfE may continue to add national licences or make other adjustments but any new commitments in the Settlement should be small.

4.3.3.High Needs Block – DfE advice is that we should plan on the same level of funding as 2015-16. This includes that the number of special school places funded centrally by the DfE will also not increase.

4.3.4.Funding can continue to be moved between the three expenditure blocks and we are currently allocating £750,000 from the Schools Block to the High Needs Block reflecting the growth in these budgets since funding reform in 2013-14.

4.4. Draft Expenditure Budgets

4.4.1.The Early Years estimate for expenditure on 2 year olds is based on the current number of hours provided and the funding rate of £4.88 per hour. This rate will be reviewed following the December Settlement if the LA receives a different funding rate from the DfE.

4.4.2.Expenditure for 3 & 4 year olds is based on anychange to the EYSFFfor 2016-17 being cost neutral compared with 2015-16. This means that the base rate uplift of 5% last year remains included. The DSG monitoring for 2015-16 indicates that the uplift is affordable within the total funding from DfE for this ageof provision. The draft budget shows a decrease in expenditure compared with the current year as a reduction in the hoursof provision has been assumed. This is based on aged population data, historic trends of take up and other known changes.

4.4.3.The budgets for the mainstream schools formula and central school budget items have been estimated using the same funding rates and assumptions as for 2015-16. An allowance has been included for the cost of the mainstream formula to increase as a result of data changes from the October 2015 census. The Growth Fund requirement will be updated following the receipt in October of forecast pupil numbers from schools.

4.4.4.The SEN budgets have been estimated based on a detailed analysis of current pupils and expected trends.

4.4.5.The draft budget for excluded pupils has been set assuming that the Early Intervention project will be successful and costs will be contained to the level of the current year budget. A budget has also been included for a further full financial year of the Early Intervention project at the same level as agreed for 2015-16. To complete the 2016-17 academic year, a commitment of DSG reserves to 2017-18 will alsobe required.

4.4.6.All budget estimates will be updated for the December report.

  1. MAINSTREAM FUNDING FORMULA 2016-17

5.1.The funding for mainstream schools over the 3 years since the introduction of national reform in2013-14 has established a high level of consistency in local funding formulae. This has been achieved through the following:

  • In 2013-14, asimplified fundingformula templatewas introduced by the Education Funding Agency (EFA),and this allowed only limited local decision-making in the use of funding factors and data. Minor changes were made in the following two years and the EFA announced in July 2015 that there are no furtherchanges for 2016-17.
  • In 2015-16, the DfE introduced a new national minimum formula to calculate a per pupil funding level for each Local Authority (LA), with those funded below this level receiving an increase in funding. The national minimum formula for Poole is included at Appendix 2. It is similar to the template used to fund schools at the local level. A summary of the permitted formula options and comparison with the national minimum formula and Poole’s 2015-16 local formula is provided at Appendix 3.
  • The introduction of a national minimum provided asignificant boost in fundingfor Poole with anadditional £3.2 million (4.7%) being allocated in 2015-16 compared with the previous year. This enabled the unit values in Poole’s formula to make significant progress towards national averages.

5.2.The DfE announced in July that per pupil funding for LAs is remaining at the 2015-16 level for 2016-17. This means that the October 2013 data underlying the LA minimum formula allocation is not being updated. Also announced is that the Minimum Funding Guarantee (MFG) will continue to apply at minus 1.5% per pupil.

5.3.A wholesale review of the local funding formula was undertaken last year and it is proposed to use the same factors and unit values again in 2016-17. Formula funding changes for most schools will, therefore, be as a result of applying the updated pupil numbers and data provided by the EFA for October 2015. In a small number of cases, funding will change only from the operation of the MFG as these schools remain funded above the local formula. Additionally, a small number of schools will see their allocations increase from the release of funding above the cap (a per pupil increaseabove 10%) in 2015-16. The formula unit funding values are included in Appendix 4.

5.4.To ensure that the formula remains affordable when pupil numbers and data have been updated from the October 2015 census, it is proposed that the method agreed last year is applied as follows:

Funding Shortfall:

  • By reducing the threshold of the cap below 10% in the first instance (capped funding is limited to the total of MFG allocations).
  • Followed by a reduction in the Basic Entitlement equally per pupil for each phase as necessary to provide the balance.

Funding Excess:

  • To increase the Basic Entitlement for Primary and KS 3 as an equal amount per pupil.

5.5.Forecast DSG Budget Requirement for Proposed Formula 2016-17

The table below summarises the forecast DSG budget requirement based on an estimate of Numbers on Roll (NOR) at the October 2015 census applied to2015-16 data and unit values.

Table 2: Draft Mainstream Formula Budget Requirement 2016-17

Forecast NOR with
2015-16 Data / DSG Budget Requirement / Forecast Formula NOR
15/16 / 16/17 / Change / 15/16 / 16/17 / Change
Infant / 8,914,023 / 9,159,509 / 245,486 / 2,451 / 2,521 / 70
First / 2,956,695 / 2,932,933 / -23,762 / 901 / 898 / -3
Primary * / 14,365,234 / 14,937,775 / 572,541 / 3,877 / 4,053 / 177
Junior * / 10,048,092 / 10,247,844 / 199,752 / 2,846 / 2,896 / 50
All Primary Phase / 36,284,044 / 37,278,061 / 994,017 / 10,075 / 10,368 / 293
Secondary Phase** / 34,233,670 / 33,817,983 / -415,687 / 7,217 / 7,120 / -97
Total Schools / 70,517,714 / 71,096,044 / 578,330 / 17,292 / 17,488 / 196

*Pupils funded through the formula include forecast pupil numbers where year groups are being added (Heatherlands Primary in 2015-16 and Ocean Academy in 2015-16 and 2016-17). Pupil numbers in the formula are, therefore, greater than at the relevant October census.

**Secondary Phase includes Broadstone Middle.

5.6.The draft formula is required to be sent to the Education Funding Agency by 31 October 2015.

5.7.Final pupil numbers and data to use in the formula will be received from the EFA in early December 2015. Overall formula affordability will be assessed following the DSG Settlement Announcements, scheduled for late December.

5.8.The formula will be considered and finalised at the January Schools Forum meeting and sent to the EFA by 21 January 2015 for final approval.

  1. DECISIONS

6.1.School members only (Headteachers, Governors and Early Years Providers) are to agree that the draft mainstream school formula for 2016-17 remains unchanged as detailed in Paragraph 5 and Appendix 4, for submission to the EFA by 31 October 2015.

Nicola Webb

Head of Accountancy

Financial Services

October 2015 Tel: 01202 63 3296E-mail:

Appendix 1

DSG Budget - £000’s / 2015/16 Budget / 2016/17
Gross / Changes / Less DfE / Net / Year End / Initial
Original / Places / Revised / Forecast / Var / Draft
Early Years
Providers 3 & 4 / 4,525 / 4,525 / 4,497 / -28 / 4,459
Providers - 2's / 1,249 / 1,249 / 772 / -477 / 772
Early years Pupil Premium / 85 / 85 / 85 / 0 / 85
Central Spend - SEN / 552 / 552 / 552 / 0 / 572
6,411 / 0 / 0 / 6,411 / 5,906 / -505 / 5,888
Schools
Mainstream Formula - forecast / 70,518 / 70,518 / 70,483 / -35 / 71,096
Mainstream Formula data update / 0 / 0 / 0 / 401
School Admissions / 150 / 150 / 150 / 0 / 150
Licences purchased by DfE / 100 / 100 / 80 / -20 / 100
Growth Fund / 565 / 565 / 565 / 0 / 565
Servicing Schools Forum / 6 / 6 / 6 / 0 / 6
71,339 / 0 / 0 / 71,339 / 71,284 / -55 / 72,318
High Needs
Pre 16 SEN Places - Maintained / 1,040 / 1,040 / 1,040 / 0 / 1,040
Other pre 16 places ** / 1,335 / 274 / -1,609 / 0 / 0 / 0 / 1,609
Post 16 special places ** / 291 / 153 / -444 / 0 / 0 / 0 / 444
Mainstream post 16 statements / 102 / -102 / 0 / 0 / 0 / 102
Medical Places - Quay School / 806 / -806 / 0 / 0 / 0 / 806
AP Places - Quay School / 480 / -480 / 0 / 0 / 0 / 480
Early Intervention –summer* / 134 / 134 / 0 / -134 / 134
Early Intervention -autumn/spring* / 192 / 192 / 192 / 0 / 192
High Needs Contingency / 74 / 80 / 154 / 0 / -154 / 0
ELSA * / 5 / 5 / 5 / 0 / 0
Top up Funding –Maint/Academy / 3,721 / 3,721 / 3,885 / 164 / 3,920
Top Up Funding –Exclusions / 300 / 300 / 300 / 0 / 300
Top up Funding – Ind.Special sch / 4,650 / 4,650 / 4,615 / -35 / 4,605
Top up Funding - Post Schools / 415 / 415 / 479 / 64 / 486
Special School Outreach * / 265 / -15 / 250 / 220 / -30 / 222
Other Education Out of School / 130 / 130 / 130 / 0 / 130
Support for inclusion / 48 / 48 / 48 / 0 / 53
Specialist support - SENISS * / 64 / 15 / 79 / 79 / 0 / 82
Sensory impaired / 286 / 286 / 250 / -36 / 286
14,007 / 838 / -3,441 / 11,404 / 11,243 / -161 / 14,891
0
Total Schools Budget / 91,757 / 838 / -3,441 / 89,154 / 88,433 / -721 / 93,097
Funded by:
DSG estimate at start of the year / 91,341 / 507 / -3,441 / 88,407 / 87,980 / -427 / 92,568
DSG in year 3 & 4 adjustment / 0 / 0 / 239 / 239 / 0
Reserves - Early years / 356 / 356 / 168 / -188 / 0
Reserves - Quay 15/16 summer / 326 / 326 / 192 / -134 / 134
Reserves - Quay 16/17 spr/aut / 192
Reserves - other / 60 / 5 / 65 / -146 / -211 / 203
Total Funding / 91,757 / 838 / -3,441 / 89,154 / 88,433 / -721 / 93,097

* Changes marked and shaded were agreed at June 2015 Schools Forum meeting. ** High Needs funding changes made by DfE since the budget was set.

Appendix 2

DfE Unit Funding Calculation for Poole 2015/16 and 2016-17

Factor / Unit
Value / Data* / Funding
Basic Entitlement – Primary / 2,880.41 / 9,985 / 28,760,850
Basic Entitlement – KS3 / 3,949.51 / 3,941 / 15,565,011
Basic Entitlement – KS4 / 4,501.80 / 3,121 / 14,050,114
Deprivation - Ever 6 Primary / 882.39 / 2,020 / 1,782,288
Deprivation – Ever 6 Secondary / 1051.70 / 1,224 / 1,287,680
Deprivation by IDACI Band 1 – Primary / 209.14 / 991 / 207,169
Deprivation by IDACI Band 2– Primary / 260.19 / 1,425 / 370,747
Deprivation by IDACI Band 3– Primary / 346.79 / 1,051 / 364,391
Deprivation by IDACI Band 4– Primary / 421.67 / 362 / 152,542
Deprivation by IDACI Band 5– Primary / 476.84 / 399 / 190,421
Deprivation by IDACI Band 6– Primary / 691.15 / 0 / 0
Deprivation by IDACI Band 1 –Secondary / 289.06 / 637 / 184,267
Deprivation by IDACI Band 2 – Secondary / 378.88 / 825 / 312,566
Deprivation by IDACI Band 3 – Secondary / 470.32 / 512 / 240,949
Deprivation by IDACI Band 4 – Secondary / 554.08 / 235 / 130,231
Deprivation by IDACI Band 5 – Secondary / 614.08 / 223 / 136,961
Deprivation by IDACI Band 6 – Secondary / 818.79 / 0 / 0
Looked after children / 1003.80 / 96 / 95,970
Low Prior Attainment – Primary ( below 78) / 669.38 / 2,386 / 1,597,028
Low Prior Attainment – Secondary / 940.07 / 1,623 / 1,525,774
EAL – Primary (3 years) / 465.70 / 480 / 223,544
EAL – Secondary (3 years) / 1129.85 / 61 / 69,228
Lump Sum - Primary / 115,797.02 / 27 / 3,126,520
Lump Sum - Secondary / 125,155.40 / 8 / 1,001,243
Lump Sum - Middle / Calculated / 1 / 120,476
Funding Total / 71,495,958
Pupil Numbers / 17,047
Schools Block Unit of Funding / 4,194.05
Less Carbon Reduction Commitment / 7.51
Final Schools Block Unit of Funding / 4,186.54

Data used is from October 2013 census

The DfE national unit funding calculation also includes a sparsity measure for rural schools, with an uplift applied to the overall total for higher cost areas. As expected, Poole has not qualified for sparsity or the area cost uplift.

Unit values for the Basic Entitlements have been set at the national average of those used in LA LMS formulae in 2014/15.

Unit values for other factors have been set by scaling back equally the national averages for affordability.

Appendix 3

Formula Factors in 2015/16 and Proposed for 2016/17

Possible LMS Formula Factors / DfE Funding to LA
2015/16 and 2016/17 / Poole LMS Formula 2015/16 and proposed for 2016/17
Basic Entitlement
  • Compulsory
  • Based on NOR
  • Primary at least £2000
  • Secondary value or KS3 and KS4 separately with a minimum of £3,000
/ Used separate KS3 and KS4 data / Used separate KS3 and KS4 data
Deprivation
  • Compulsory factor
  • Choice of FSM
  • FSM Ever 6
  • IDACI bands (post codes)
  • Combination of 1 FSM measure and IDACI bands
/ Used combination of FSM Ever 6 measure and IDACI bands / Used Combination of FSM Ever 6 measure and IDACI bands
Prior Attainment
  • Optional (used by nearly all LAs)
  • Primary years 1 to 3 use revised EYFSP data (identifies more children than previous).
  • Primary years 4 to 6 option of using scores below 73 or 78 of previous EYFSP measure.
  • Primary option to scale down years 1 to 3 data equally for consistency with other year groups.
  • Secondary no data choice - pupils with KS2 scores below level 4 in English or Maths.
/ Uses a score of 78
No scaling used
Not necessary at LA level but unit value will be lower without scaling as it is applied to a higher number of pupils. / Uses a score of 78
Scaling used
No plans to change
Year groups across the primary phase differ between schools and those with older age groups would otherwise be disadvantaged.
Consultation in 2015/16 confirmed existing approach to continue.
Looked after Children
  • Optional
  • No data choice
  • Single unit value for both phases
/ Factor used / Factor Used
EAL
  • Optional
  • Data choice in both phases based on time since entry to UK education system above year R: Within previous:
  • One year
  • Two years
  • Three years
  • Separate phase unit values possible
/ Use of three year data
This option identifies the greatest number of children so the unit value would be lower than other options.
Separate unit values / Uses two year data as there is no data capture for time in year R. Infant schools data is therefore capped at 2 years. Data for other schools increases at 3 years.
Separate unit values
Consultation in 2015/16 confirmed existing approach to continue.
Pupil Mobility
  • Optional
  • Counts pupils admitted outside normal cycle within previous 3 years above 10% threshold.
/ Not used / Not used
No plans to change (locally mobility highly correlated with deprivation)
Sparsity
National guidance contains these complex arrangements. / Used nationally but there is no allocation for Poole / Not used and not relevant
Lump sum
  • Optional
  • Used by all LAs
  • Differentiation by phase permitted since14/15 (middle schools split)
  • Max of £175,000
  • New short term arrangements for amalgamating schools (not currently applicable for Poole).
/ Small differentiation by phase / Small differentiation by phase.
Business rates
  • Optional
  • Used by all LAs
  • Funded at cost
/ Not used / Used
Significant variation at school level.
PFI, and London Fringe factors / Not used / Not used and not relevant
Post 16
  • Optional
  • Can only be used where a factor existed in 2014/15
/ Not used / Not used
Exceptional Premises Costs
  • Optional
  • Must be EFA approved – most frequent being rents and joint use sports facilities.
  • Factor must be at least 1% of individual school budget and apply to less than 5% of schools in the LA.
/ Not used
(Factor is for specific issues applicable to individual schools). / Used to fund the additional costs of the joint use sports facilities at St Aldhelm’s and Magna academies.

Appendix 4

Proposed Formula Unit Values 2016/17

Factors / 2016/17 / DfE / Progress
Proposed / Formula / to DfE
£ / £ / %
Basic (Primary) / £2,690.50 / 2,880.41 / 93.41%
Basic (KS3) / £3,773.56 / 3,949.51 / 95.55%
Basic (KS4) / £4,307.15 / 4,501.80 / 95.68%
Free School Meals (P) / £808.52 / 882.39 / 92%
Free School Meals (S) / £1,041.61 / 1,051.70 / 99%
IDACI (P1) / £209.14 / 209.14 / 100%
IDACI (P2) / £260.19 / 260.19 / 100%
IDACI (P3) / £371.46 / 346.79 / 107%
IDACI (P4) / £495.27 / 421.67 / 117%
IDACI (P5) / £619.09 / 476.84 / 130%
IDACI (P6) / £691.15 / 691.15 / 100%
IDACI (S1) / £289.06 / 289.06 / 100%
IDACI (S2) / £378.88 / 378.88 / 100%
IDACI (S3) / £470.32 / 470.32 / 100%
IDACI (S4) / £554.08 / 554.08 / 100%
IDACI (S5) / £669.45 / 614.08 / 109%
IDACI (S6) / £818.79 / 818.79 / 100%
LAC / £1,003.80 / 1,003.80 / 100%
Low Attainment (P) * / £1,029.15 / 1,004.07 / 102%
Low Attainment (S) / £940.07 / 940.07 / 100%
EAL (P) * / £958.80 / 628.70 / 153%
EAL (S) * / £1,863.92 / 1,863.92 / 100%
Lump Sum – P / £115,797.02 / 115,797.02 / 100%
Lump Sum – S / £125,155.40 / 125,155.40 / 100%
Lump Sum - Middle / £120,476.21 / 120,476.21 / 100%
Joint Use Agreements (Magna/St Aldhelm’s) / £101,017 / N/A / N/A

* DfE unit values restated to take account of different use of data between the national minimum formula and local LMS formula

Note: all unit values are unchanged from 2015/16.

1