Report of the Borough Treasurer

Item 7 - School Funding Update 2014-15

Schools Forum

25thSeptember 2013

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1.Purpose of the Paper

The purpose of this report is to

  • Update members on the 2014-15 funding arrangements and to gain Schools Forum approval for the provisional 2014-15 funding formula.

2.Background

At the Schools Forum meeting in June 2013 members were updated on the changes to the 2014-15 funding arrangementspublished by the Department for Education

Attached at Appendix 1 is a summary of the factors in Oldham’s formula and the changes published by the Department for Education for 2014-15.

3.Update

Since the last meeting of Schools Forum the LA has continued to work with the Fair Funding Group to reviewOldham’sfunding formula to ensure it continues to meet the requirements published for 2014-15 and also to consider any factors which the group may want to review locally.

The group agreed to recommend to Schools Forum there will be no changes to the formula factors used to allocate funding to schools in 2014-15.

Below are the latest current changes to the indicators to be used in 2014-15 and possible funding formula changes for 2014-15:-

Mandatory Changes

  1. The changes made to the indicators to be used for 2014-15 for the funding formula by the DfE are:-
  1. A single indicator will be provided, covering all pupils who have been looked after for one day or more on 31st March 2013. The budgets for 2013-14 are based on the data for children that have been looked after for at least 6 months. This will mean that the Looked After Children budget will be split over a higher volume of pupils therefore reducing the cash value per pupil.
  2. The indicator for prior attainment for secondary schools for 2014/15 will be those pupils not reaching level 4 at Key Stage 2 in Englishor Maths. In 2013-14 funding is targeted at pupils not reaching level 4 in both English and mathematics. This means the prior attainment budget will be split over a higher volume of pupils therefore reducing the cash value per pupil.
  3. A 10% threshold will be introduced in 2014-15 for pupil mobility, so that it will only support schools which have mobile pupils above 10%. As a result of this change very few schools now attract this funding. The Fair Funding group discussed the following two options for allocating funding in 2014-15.

A discussion took place to review how this change should be administered and whether the cash value per pupil should change ( see local decisions).

Local Decisions

  1. Other formula changesrecommended to date

Pupil Mobility options:

  1. No change to the amount per pupil allocated in 2013-14 and the balance of pupil mobility funding allocated in 2013-14 allocated through the basic per pupil entitlement.
  2. Increase the amount per pupil above the threshold of 10%

The Fair Funding group recommended to maintain funding at the same cash value as in 2013-14 for Pupil Mobility and the surplus budget to be reallocated through the basic per pupil entitlement factor.

  1. The Sparsity factor measures the distance pupils live from their second nearest school. In rural areas where schools are few and far between, pupils could face the choice of either attending their nearest school or travelling a long way to the second nearest.

The data provided is for each pupil / school is

  • Primary and has fewer than 150 pupils and an average distance greater than or equal to 2 miles
  • Secondary and has fewer than 600 pupils and an average distance greater than or equal to 3 miles

Fair Funding group recommended not to introduce a sparsity factor in the formula in 2014-15.No school currently falls into the above criteria.

  1. Where schools are amalgamating, they will retain the equivalent of 85% of two lump sums for the financial year following the year in which they merge. Authorities can apply to the EFA to lower this in exceptional circumstances.

The Fair Funding group recommended to schools retaining the equivalent of 85% of two lump sums.

  1. Possible formula changes for 2014-15

The Fair Funding group identified at a meeting of the group10th July two factors to review for 2014-15:

  1. Lump Sum in the Secondary Sector – LAs can differentiate in 2014-15 the lump sum by phase provided that for each phase the lump sum does not exceed the £175,000.The group have requested some further modelling to increase the lump sum to the national average. The lump sum is to support schools which are unavoidably small and require this support because per pupil funding alone is not sufficient.
  2. EAL factor in the secondary sector - the group have requested some further modelling to reduce the amount per pupil to the national average.

The Fair Funding Group met again on the 9th September to discuss these 2 factors and they requested further modelling for these to fully understand

  • The impact this has on both sectors once the Minimum Funding Guarantee has been applied
  • A comparison to the cash values of statistical neighbours

The group will meet again on the 8th October.

High Needs Block

2013-14 is a transitional year for special schools; resourced units and Alternative Provision which means place values have been maintained at the previous year’s values and ‘empty’ places have been funded to allow more time for a further review of the funding arrangements throughout the 2013-14 financial year.

The LA has started to review the current arrangements and will be consulting with affected schools and academies this term.

Growth Fund Criteria

Schools Forum agreed at the meeting 17th October 2012 to retain a Growth Fund and the criteriaand method of distribution was agreed for 2013-14. Any proposed changes to the growth fund for 2014-15 will need submitting to the EFA for compliance checking and further approval by the Schools Forum.

The LA will shortly be reviewing the criteria set and agreeing with the Fair Funding Group any amendments before submitting any proposed changes to Schools Forum and the EFA.

In 2014-15 it is possible for LA’s to adopt criteria to address falling roles where local planning shows surplus places are needed in the future. Whilst it is not anticipated that any schools/academies in Oldham are affected it is worth discussing setting a criteria and including this within the current growth Fund criteria.

Redetermination of School Budget Shares

It is not permissible to make any adjustments to schools budgets for pupils aged 5-16 years.

Any DSG (Dedicated Schools Grant) underspend brought forward from the previous year may be used to support central expenditure (providing no limits are breached) in the Schools Block, or transferred to the High Needs or Early Years Block. Alternatively, the underspend can be carried forward and redistributed via the funding formula in the next funding period.

4.Other Updates

Early Years Funding

There will be no significant changes for 2014-15 – Early Years providers will continue to be funded direct by the LA. The funding allocated is based on actual places occupied and providers are allocated funding on a base rate. The Early Year Funding Formula also includes a mandatory supplement for deprivation and other optional supplements such as quality.

Post 16 Mainstream Funding

No change for 2014-15 –Funding is calculated by the EFA according to national formula.

High Needs Place Funding

There will be no change to the Pre-16 amount per place of £10,000. For Post-16 the amount per place currently funded direct from the EFA will be brought in line with Pre-16 and reduced from £10,977 to £10,000. The saving will be re-allocated to the DSG to allow the LA to take account of the place value reduction by increasing the top up amount per place.

High Needs Top Up Funding

In mainstream settings top up funding is payable directly by the commissioning LA above a threshold of £6,000. This threshold is now mandatory to provide consistency between LA’s and to assist in the movement to a National FundingFormula. Oldham’s current formula is already based on this amount therefore no changes are required for 2014-15.

In special settings and units the threshold continues to be above £10,000 and in Alternative Provision the threshold is above £8,000.

High Needs Pupils over and above agreed Places

The amount of top up payable for High Needs Pupils is through agreement with the provider and commissioner. If pupils are placed above the agreed place numbers this does not automatically mean that the cost of the pupil place value is £10,000 and top up as the agreed price should reflect the actual incremental cost to the school or academy.

Resourced Units – Adjustment to Number on Roll

For 2014-15 it is the number of places in a resourced provision that should be deducted from a mainstream providers’ number on roll when calculating their formula school budget share, rather than the number of pupils actually in those places. This is intended to negate any perverse incentive to maintain more places than are needed in a unit.

Pupil Premium

This is currently paid at a rate of £900 for every pupil who has been eligible for free school meals in the last 6 years or is looked after for more than 6 months. There is also an additional £300 for each pupil who has been a service child in the last 2 years and including children whose parents have died in service or are in receipt of a compensation or war pension. Data is collected from the Januarycensusproceeding the financial year. The amount in 2014-15 will be £1,300 per pupil in the primary sector. The secondary premium has not yet been announced.

Insurance Grant

A new grant is payable to academies from September 2013 to reflect the extra premiums they face in relation to mainstream schools. The grant is payable at £20 per pupil.

Education Services Grant

This funding payable to academies was previously allocated under the LACSEG (Local Authority Central Spend Equivalent Grant) Block Grant and covered areas previously provided by the LA such school improvement and asset management. The grant is currently payable at £150 per pupil. The rate in 2014-15 will be £140. Currently some protections are also payable but these are being removed over a limited period of time so that the rates for LA’s and academies are brought together.

5.Implementation Timetable

A reminder of the current timetable set by the DfE is below;

Date / Action
31 October 2013 / Local Authorities submit provisional Schools Budget Pro Forma to the EFA
27 November 2013 / Schools census database closed
16 December 2013 / EFA confirms DSG allocations for 2014-15 ( prior to recoupment of funding for academies)
21 January 2014 / Local Authorities submit final data for Schools Budget pro forma
28 February 2014 / Local Authorities confirm budget for their maintained schools. EFAconfirms academies budgets.

6.Actions / Recommendations

  • The school forum members are asked to note the contents of this report.
  • Members are asked to approve the recommendations of the Fair Funding Group detailed at b1-4.
  • The possible growth fund criteria will be discussed at a future meeting.
  • Members will be kept informed of any further local changes to the 2014-15 funding formula in line with the above timetable.