Date: 8 February 2012
REPORT TITLE: SCHOOLS BUDGET 2012-13
Report by Yannick Stupples-Whyley
Contact details: Telephone (01245) 433171; e-mail:
1. Purpose of report
1.1 To update the Forum on the outcomes of the Education Funding announcement for 2012-13.
1.2 To reflect on the budget process to date.
2. Recommendations
2.1 To agree:
· The level of school specific contingencies at 4.3.7;
· The breach of the Central Expenditure Limit (set out 4.3.26) and subject to the final numbers of Academies for 2012-13 becoming known.
2.2 For the Forum members to express their views on:
· The service requests and savings highlighted at 4.3.8.
2.3 To note:
· Any decisions that require financial movement are subject to a Cabinet Member Action.
3. Relevance to Strategic Plans
3.1 The Schools Budget supports all strands of the ECM and the Children and Young Peoples Commissioning Strategy and Plan.
4. Finance Implications
4.1 Outcomes of the Education Funding announcement
4.1.1 The coalition government has announced that it will continue with the current methodology for funding schools in 2012-13 through the Dedicated Schools Grant. The underlying school budget will be kept at flat cash per pupil for 2012-13.
4.1.2 To protect schools from significant budget reductions, the Minimum Funding Guarantee will continue at -1.5% per pupil reduction in 2012-13.
4.1.3 The amount for the Pupil Premium will double from £625 million in 2011-12 to £1.25 billion in 2012-13. It will continue to support the educational development of disadvantaged pupils and provide incentives for good schools to take on pupils from poorer backgrounds.
4.1.4 The amount for Devolved Formula Capital is £200 million nationally and the provisional allocation for Essex is £3.173 million for LA schools and £547,674 for VA schools.
4.2 Budget implications 2012-13.
4.2.1 The DfE has announced the basis of funding for 2012-13 for calculating Dedicated Schools Grant (DSG) remains the same as in 2008-11.
4.2.2 The Guaranteed Unit of Funding remains at £4,816.23 as per pupil funding remains flat cash. The total resources will be determined by pupil numbers in the January 2012 Census. The Pupil Premium is not included in this total.
4.2.3 The Pupil Premium will be distributed through a specific grant and will be targeted to schools. It will be for schools to ensure that this additional resource is used appropriately.
4.2.4 The Table below indicates the implications of the Pupil Premium:
Amount per child£
Children from deprived backgrounds / 600
Children Looked After / 600
Children from a military background / 250
4.2.5 The premium will be based on:
· The numbers of 4-15 year olds recorded on the January 2012 Census, known to have been eligible for Free School Meals in any of the previous six years, as well as those first known to be eligible at January 2012;
· A provisional allocation of £600 per child for the number of children continuously looked after for over 6 months as reported in the March 2011 Children Looked After Data Return (SSDA903) and aged 4 to 15 at 31 August 2010. This allocation will be updated and finalised in October 2012 based on the number of children continuously looked after for over 6 months as recorded in the March 2012 Children Looked After Data Return (SSDA903) and aged 4 to 15 at 31 August 2011. The provisional allocation is £579,600; and
· The numbers of service children reported on the January census.
4.2.6 The premium is to be paid to schools.
4.2.7 The CLA Premium will be paid to the LA which “looks after” the child and will need to make arrangements to fund schools, academies and other settings in other authorities which its CLA attends.
4.3 Budget Planning 2012-13.
4.3.1 The review of the Essex Formula for Funding Schools, originally started in 2010, was reconvened and consulted with Schools. The Local Authority accepts the recommendations of Schools’ Forum.
4.3.2 The agreed changes to the formula are shown below:
· To increase the Primary Lump Sum from £70,260 to £77,448;
· To decrease the Secondary Lump Sum from £327,592 to £267,321;
· To redefine a small school in the Primary sector as being either an infant school with less than 90 pupils on roll, a junior school with less than 120 pupils on roll or a primary school with less than 210 pupils on roll;
· To change the funding methodology of the Small Schools Subsidy;
· To remove the Teaching Cost Adjustment factor from the Formula;
· To fund the Key Stage 1 adjustment on actual numbers;
· To correct the SEN/AEN anomaly;
· To increase the on-cost rate for SEN statements to 21%;
· To allocate former specific grants associated with deprivation through AEN funding; and
· To distribute former specific grants calculated on a per pupil basis through Key Stage Funding.
4.3.3 The changes to the Formula for Funding Schools will have an adverse impact on some schools. To minimise the impact on schools the Local Authority will not apply to the Secretary of State for the permission to exclude BIP and EiC funding from the calculation of the minimum funding guarantee. The teaching cost adjustment is usually excluded from the minimum funding guarantee but as the factor no longer exists, it will not be excluded from the calculation of the 2011/12 baseline in determining the minimum funding guarantee for 2012/13.
4.3.4 Following the consultation and feedback received from schools the Local Authority is proposing to protect schools that face a decrease greater than the minimum funding guarantee, i.e. greater than -1.5%. The affected schools will be protected in 2012/13 so they received no less than a -1.5% decrease in their 2011/12 funding. The protection will be offered for 5 years and tapered as shown in the table below:
Year 1 – 2012/13 / -1.5%
Year 2 – 2013/14 / -3%
Year 3 – 2014/15 / -4.5%
Year 4 – 2015/16 / -6%
Year 5 – 2016/17 / -7.5%
Year 6 – 2017/18 / No protection
The protection will be fixed subject to a National Funding Review and will also be subject to any advantageous change in a school’s profile. The table below shows the forecast cost of protection:
Primary Protection
£’000 / Forecast
Secondary Protection
£’000 / Forecast Total Protection
£’000
Year 1 - MFG (98.5%) / 1,982 / 400 / 2,382
Year 2 – 97% / 701 / 128 / 829
Year 3 – 95.5% / 242 / 40 / 282
Year 4 – 94% / 87 / 0 / 87
Year 5 – 92.5% / 25 / 0 / 25
Total / 3,037 / 568 / 3,605
Annex B shows the effect on schools of the proposed changes and the forecast protection.
4.3.5 The Local Authority does not think that the hardship fund proposed by Schools’ Forum will be required in addition to the protection offered above.
4.3.6 Inflation.
The DSG will see no increase to take account of inflation, however, schools and centrally retained services will be affected by inflationary pressures.
4.3.7 Set out below is a list of the proposed school specific contingencies for 2012-13. The list repeats broadly the 2011-12 report
Contingency / 2011/12£,000 / 2012/13
£,000
i. / Pupil Numbers/Formula Errors / 1,362 / 1,395
ii. / SEN Statements / 3,325 / 3,325
iii. / Opening, closing, reorganising schools / 1,483 / 1,250
iv. / Targeted school improvement / 173 / 173
v. / Salary protection/excluded pupils / 115 / 115
vii. / Former Specific grants / 10,067 / 11,066 (1)
vii. / Children Looked After (dowry) / 1,120 / 0
viii. / Rent & Rates Adjustments / 1,090 / 1,090
Total / 18,735 / 18,414
(1) Increase in former specific grants due to the use of grant carry forwards in 2011/12 .
4.3.8 LA Service Pressures and Savings.
Listed below are the LA’s budget pressures and potential savings:
Proposal / 2012-13£,000 / 2013-14 Change from 2012/13
£,000
i. / Inflationary Pressures / 580 / 0
ii. / Recoupment / 190 / 0
iii.. / Expansion of Longview / 370 / 0
iv. / Behavioural, Emotional and Social Difficulties / 60 / 0
v. / Speech Therapy / 90 / 0
vi. / Autistic Spectrum Disorder Enhanced Provision / 460 / 630
vii. / Maldon, The Plume – replacement of rented accommodation* / 12 / 0
Total / 1,762 / 630
Less: savings
Primary & National Strategies
Contingency – LAC Dowry
Contingency – Opening, closing, reorganising schools
More Practical Learning Options
Early Years / (500)
(1,120)
(233)
(390)
(5,042) / 0
0
233
0
0
Total Savings / (7,285) / 233
Net / (5,523) / 863
Proposed Use
Early Years Foundation Stage
Carbon Reduction Commitment Energy Efficiency Scheme
Children in Care Out County
Remove DSG contribution towards Education Psychology Service
Special Teaching Early Years Foundation Stage
Education Rangers
BSF Programme PFI Liability Phase 1
Extended Schools
Schools Self-Evaluation Tracker / 1,254
890
3,000
(1,914)
500
175
320
1,640
40 / 0
0
3,000 (1)
0
0
0
0 (2)
(610)
0
Total Proposals / 5,905 / 2,390
Net Position / 382 / 3,253
(1) Subject to headroom being available
(2) Phase 2 full year effect £525k 2014/15 will result in an increase provision to £845k.
4.3.9 Information to support the budget pressures, savings and proposed use of the overall available resources identified above is included within the report below.
4.3.10 Inflationary Pressures
Inflationary pressures of £580k, consist of increases to Independent Special School charges £362k, pay inflation (1%) £194k and an increase in recoupment charges £24k.
4.3.11 Recoupment
There is a forecast increase in the cost of recoupment based on the average spend over the last 3 years.
4.3.12 Longview Mental Health Unit
The Forum has previously agreed the staffing structure recommended by the Royal College of Psychiatrists at an additional cost of £370k.
4.3.13 Behavioural, Emotional and Social Difficulties
The Forum supported at their meeting of 6th July 2011 the creation of two new 12 place BESD enhanced provisions from September 2011 for primary aged pupils.
4.3.14 Speech Therapy
It was reported to the Forum in May 2011 from the SEN sub group that there was insufficient funding for speech therapy that is a statutory requirement within statements.
4.3.15 Autistic Spectrum Disorder Enhanced Provision
The Forum supported at their meeting of 6th July 2011 the creation of 8 Autistic Spectrum Disorder enhanced provisions in the County for 2012-13.
4.3.16 Primary & National Strategies
With the ending of the national programme the support from the DSG is no longer required. However, with the move to a commissioning approach to school improvement a budget is necessary to commission providers of services to schools causing concern.
4.3.17 More Practical Learning Options
The continued contribution to More Practical Learning was agreed by Schools Forum on a time limited basis and the last cohort will finish this academic year on the programmes.
4.3.18 Early Years Foundation Stage
The total budget for the Early Years & Childcare Quality Improvement Team for 2012-2013 is £1,628,095.
· The core function of the EYFS Quality Improvement Team is to promote high quality practice and provision, as reflected in the statutory requirements and good practice guidance of the Early Years Foundation Stage, across both the PVI and maintained sectors
· This is delivered through a range of activities for settings and practitioners, including intervention, guidance, information, training, support and challenge, which promote high quality experiences for children aged 0-5 years and their families.
· Key mechanisms to achieve this are county wide Learning Communities, Quality Monitoring systems, Early Language and Communication strategies, and approval of quality provision for disadvantaged 2 year olds in receipt of Free Entitlement.
Most local authorities offset this spend against the DSG.
4.3.19 CRC Energy Efficiency Scheme
Requirements of the Carbon Reduction Commitment (CRC) are to ensure energy use and emissions from schools are properly measured and managed and are to be included within the Local Authority’s CRC Footprint.
In accordance with the Department Energy & Climate Change (DECC) draft guidance, all Local Authority (LA) maintained schools, Foundation, VA, academies. Technology Colleges and PFI under control of the LA are to participate in the CRC by way of inclusion as part of their Local CRC organisation
Described as Associated Persons in the CRC regulations, they must assess their footprint at the start of each phase and record and report consumption data to the LA year on year. The need for schools to provide this information is mandatory and as with other CRC participants, all Core Sources will need to be included within the CRC reporting.
The inclusion of schools into the Authority’s CRC organisation will require various parties to co-operate at a number of levels and the LA needs to gather 100% of emissions data from all schools (except PFI schools, where the PFI operator pays the bills) to be assured of compliant qualification, carbon footprint and annual reports to avoid financial penalties.
It is essential that Governors and head teachers appreciate the obligations of the CRC and associated cost of allowance purchase. The potential costs of the CRC need to be considered by the school, and should allocate resources to improve energy efficiency and invest in refurbishment projects and maintenance.
Whilst it is only fair that schools pay a proportion of the Council’s overall Carbon Reduction Commitment, allowance purchase, it is important that they are given advice and support on how to reduce energy usage within the buildings they occupy. In addition those schools which are actively undertaking energy saving programs should be incentivised to continue their efforts. The proposal of implementing the Eco Schools standard, with possible support from MITIE and the Environment Strategy team will offer schools the resource to implement change and in turn provide assurance to the Council that positive action regards energy efficiency is being undertaken.
An additional report can be brought to a future Forum meeting if members would like additional information on the Carbon Reduction Commitment.
4.3.20 Children in Care in Out of County Schools
Most local authorities who place children in care in out of county schools, where local schools cannot meet needs, attribute the greatest proportion of the cost to the DSG, in Essex we have previously only attributed 37% of the costs with the residual 63% being met by the LA. To bring us in line with other local authorities and to reflect the usual cost to education of a boarding school we will be charging 38 weeks of the year to the DSG and the remaining 14 weeks to revenue support grant. Due to the scale of the budget it is not possible to make this change in one financial year and it is therefore proposed that an additional £3 million will be transferred each year, over the course of 6 years (subject to available headroom).