School Funding 2014/15

SCHOOL FUNDING 2014/15

Consultation with Schools

Description of Proposals

JULY 2013

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Contents

Introduction / 3
Overview of Proposals for 2014/15 / 4
AWPU Funding / 5
Deprivation / 5
Low Cost, High Incidence SEN / 6
English as an Additional Language / 7
Sparsity / 7
Lump Sum / 8
Rates / 8
Split Sites / 9
London Weighting / 9
PFI Contracts / 9
Pupil Mobility and DSG Funded Post 16 Provision / 9
Growth Fund / 9
Centrally Retained Schools Block / 10
Financial Model / 11
High Needs / 11
Annex A – Financial Modelling

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Introduction

This consultation concerns the Schools Block and High Needs Block and is relevant for all maintained schools and academies.

The Department for Education (DfE) launched a consultation with Local Authorities in February 2013 to review the effectiveness of the changes made in 2013/14 to understand to what extent changes needed to be made in 2014/15 in order to move closer to a national funding formula.

The consultation encompasses any required changes by the DfE and some small changes proposed by the Authority.

Funding that was previously retained within the Schools Block by the Authority must be delegated to schools with the following exceptions:

• Exception 1 where Schools’ Forum agrees that a service should be provided centrally for maintained schools (de-delegation);
  
• Exception 2 where the Authority continues to provide for Historic commitments such as combined services and redundancy costs continue to be funded; and
  
• Exception 3 where the Authority continues to provide statutory functions such as a co-ordinated admissions schemes.
  

Where funding is retained by the Authority under exceptions 2 and 3 the Authority is not allowed to retain more than the 2013/14 budget without the permission of the Secretary of State.

For 2014/15 a thirteenth factor has been added for Sparsity which allows local authorities to target funding at small rural schools.

The minimum funding guarantee will remain at -1.5%.

Schools’ Forum arrangements have been amended and the Authority is now required to replace the 14-19 representative with a 16-19 provider representative.

Schools are still required to fund the first £6,000 for each statement for special educational needs.

The Authority must submit a proforma detailing the new Formula to the Education Funding Agency by 31st October 2013. A full consultation must be held with schools.

Overview of Proposals for 2014/15

1. To continue to fund KS3 and KS4 pupils using separate AWPU rates (Page 5, Question 1)
   
2. To continue to fund deprivation using FSM data and IDACI data in the same funding proportions as in 2013/14 (Page 5, Question 2)
   
3. To continue to use the Low Cost High Incidence SEN factor for primary and secondary (Page 6, Question 3)
   
4. To continue to fund English as an Additional Language for up to 2 years from when a child enters the compulsory school system (Page 7, Q4)
   
5. To not use the new Sparsity factor (Page 7, Question 5).
   
6. To maintain the Lump Sum at £150,000 and not to have a separate Lump Sum for primary and secondary (Page 8, Question 6).
   
7. To cease funding Joint Use and Waste Water Treatment through the rates allocation but to apply for an exceptional factor for Joint Use agreements (Page 8, Question 7)
   
8. It is proposed to keep the funding factors for split sites, PFI contracts and London weighting unchanged (Page 9, Question 8)
   
9. It is proposed to continue not to have a factor for Looked after Children, Pupil Mobility or DSG funded Post 16 provision (Page 9, Question 9)
   
10. It is proposed to extend the criteria of the Growth Fund to include additional funding for reception classes (Page 9, Question 10)
    
11. It is proposed to continue to de-delegate all funding that has been de-delegated for maintained schools in 2013/14 (Page 10, Question 11).
    
12. For High Needs Funding it is now mandatory that schools fund the first £6,000 of any statement of special educational needs (Page 11)
    
13. It is proposed to fund top-up payments at the same value as 2013/14 for Special Schools and Enhanced Provision (Pages 11-12, Question 12)
    
14. It is proposed to cease providing top-up payments for empty places within Special Schools and within Enhanced Provision within mainstream schools (Pages 11-12, Question 12)
    
15. It is proposed to increase the funding for Speech Therapy (Pages 11-12, Question 12)
    

Age Weighted Pupil Unit (AWPU) Funding

Authorities are still only permitted to fund Key Stage 1 and Key Stage 2 pupils at the same rate for 2014/15.

The Authority still believes that there should be separate rates for Key Stage 3 and Key Stage 4 to reflect the additional costs at Key Stage 4. It is therefore proposed that separate rates are continued for Key Stage 3 and Key Stage 4 (in 2013/14, these are £3,938 for Key Stage 3 and £4,796.22 for Key Stage 4).

The DfE have set parameters for AWPU funding and the value of the primary AWPU must be at least £2,000 and the value of the KS3 and KS4 AWPU must be at least £3,000. This is currently not an issue for Essex as the primary AWPU is £2,661 for 2013/14 and the secondary rates are shown above.

Deprivation

Deprivation remains a key concern for the DfE and alongside AWPU funding, deprivation is a mandatory factor.

The Government continues to expect that deprived pupils should receive additional funding and to ensure that the Pupil Premium remains additional, local authorities will be able to continue to target funding at deprivation.

Local authorities can continue to use free school meals (FSM) data, Income Deprivation Affecting Children Index (IDACI) data or a combination of the two. Where FSM data is used it can be either entitled pupils or the Ever -6 model (which counts pupils who have been entitled to a free school meal during the last 6 years).

It is proposed to continue to use a combined factor with funding in the same proportion as 2013/14, being £38.296 million distributed £29.342 million through IDACI data and £8.954 million through FSM data. It is not proposed to use the Ever-6 model for FSM.

The bandings for IDACI data are set by the DfE and remain the same as 2013/14 and the Authority proposes to retain the same weightings.

Lower Limit / Upper Limit / Essex Weighting
Band 0 / 0.20 / 0.25 / 0.5
Band 1 / 0.25 / 0.30 / 1.0
Band 2 / 0.30 / 0.40 / 1.0
Band 3 / 0.40 / 0.50 / 1.5
Band 4 / 0.50 / 0.60 / 1.5
Band 5 / 0.60 / 1.00 / 1.5

Low Cost High Incidence SEN

Funding for Primary schools will continue to be based on the Early Years Foundation Stage (EYFSP). A new EYFSP was published in March 2012 and introduced in September 2012. The first assessments using the new profile take place in Summer 2013.

Year 1 pupils will be assessed on the new Profile and pupils in years 2-5 will have been assessed on the old Profile.

Authorities will be able to target funding at all pupils either:

• The number of pupils in years 2-5 who achieved fewer than 78 points and pupils in year 1 who did not achieve a good level of development; or
  
• The number of pupils in years 2-5 who achieved fewer than 73 points and pupils in year 1 who did not achieve a good level of development.
  

The Authority proposes to continue with pupils who do not achieve 78 points or fewer for years 2-5 and for year 1 pupils who did not achieve a good level of development. The funding pot will remain the same as in 2013/14.

As the new Profile assessment has not been measured yet, modelling will assume all year groups not achieving 78 points.

For secondary schools in 2013/14 schools are funded for pupils who did not achieve Level 4 in English and Maths at Key Stage 2. For 2014/15 secondary schools will receive funding for pupils who did not achieve Level 4 in English or Maths at Key Stage 2. The number of pupils who attract funding will increase. It is proposed to adjust the unit cost and keep the funding pot the same to ensure AWPU funding is not reduced. The DfE has provided 2013/14 data of the number of pupils who did not achieve Level 4 in English or Maths and this data is included in the financial model.

English as an Additional Language (EAL)

It is proposed to continue to distribute EAL funding through the Formula for Funding Schools in 2014/15. It is proposed that funding for EAL will continue to be restricted for 2 years from when a pupil enters the compulsory school system and will be funded to all schools including academies. This will ensure the funding will follow the pupil.

The total funding distributed for EAL is £1.37 million. It is proposed to keep the amount of funding distributed through EAL the same as in 2013/14

Sparsity

Sparsity is a new thirteenth factor for 2014/15. Funding may be targeted at schools that have been identified by the DfE’s sparsity factor. The factor measures the distance that pupils live from their second nearest school.

The distance has been calculated using pupil and school postcodes. For each school the DfE has identified the pupils that live nearest to it and then has calculated the distance they live from their second nearest school. Selective grammar schools are not considered when identifying the second nearest school. The mean distance is then calculated and this is the school’s sparsity distance.

A school may attract sparsity funding as follows:

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

The maximum permitted per school is £100,000 and can be funded as a lump sum or can be tapered so the smallest schools receive more funding.

Sparsity has been calculated as the crow flies distances.

In Essex only 20 primary schools and 1 secondary school would qualify for Sparsity funding.

If Sparsity was included in the Formula for Funding Schools to prevent reducing AWPU funding any funding will come from the Lump Sum funding pot.

The table below shows the effect on the Lump Sum factor of having a sparsity factor based fixed at £100,000 per school:

Cost of Sparsity
£’000 / Reduction to Lump Sum
£’000 / Revised Lump Sum
£’000
Primary
Lump Sum / 2,000 / 4.377 / 145.623
Secondary
Lump Sum / 100 / 1,333 / 148,667

It is proposed not to have a Sparsity factor as very few schools would qualify, it would impact on all schools and would create a large funding differential between schools that qualify and those that do not. In addition the Lump Sum was set at £150,000 to protect small schools so additional protection is not required.

Lump Sum

In 2013/14 local authorities had to set a single lump sum for all schools and the upper limit was £200,000.

In 2014/15 a separate lump sum can be set for primary and secondary schools and the upper limit is £175,000.

It is proposed to retain a lump sum at £150,000 for both primary and secondary schools.

Where schools are amalgamating, they will retain two lump sums in the year of amalgamation and 85% of two lump sums in the year following the year merged.

Rates

Rates will continue to be funded as the estimated cost for the financial year. The Authority will continue to work with district authorities to improve the accuracy of the estimate. Funding cannot be re-determined in year and therefore any adjustments to rates funding will be done in the following financial year.

In 2013/14 funding for waste water treatment and joint use agreements were included in the rates allocation. As academies are not funded for rates this can no longer continue.

The Authority proposes to apply for an exceptional factor for Joint Use but not all schools that currently receive funding would be eligible as funding must be more than 1% of a school’s total budget. No school that receives waste water treatment funding would qualify for an exceptional factor.

Split Sites

It is not proposed to change the existing arrangements.

London Weighting

It is not proposed to change the existing arrangements.

PFI

It is not proposed to change the existing arrangements pending any proposals currently under discussion.

Looked After Children

It isproposed to continue not to have a formula factor for Looked after Children.

Pupil Mobility and DSG Post 16 Funded Provision

Pupil mobility can now only be targeted at those schools experiencing pupil mobility above a 10% threshold.

The Authority proposes to continue to not have factors for Pupil Mobility and DSG Post 16 Funded Provision.

Growth Fund

The Growth Fund must be agreed by Schools Forum and is deducted from the Schools Block before calculating budget shares.

In 2013/14 the Growth Fund provides for planned growth and funding for Key Stage 1 Class Sizes.

In 2014/15 it is proposed to continue with these funding streams but in addition it is proposed to provide additional funding for schools with reception pupils to reflect the additional costs of support. It is proposed to provide additional funding based on an AWPU weighting of 1.025 to a primary AWPU weighting of 1. Based on 2013/14 funding this would fund an additional £66.53 per pupil.

Centrally Retained Schools Block

The Department for Education continues to require that the funding that was subject to de-delegation in 2013/14should be delegated to schools in 2014/15. Schools Forum will decide whether the funding for maintained schools is de-delegated. Exceptions to the requirement to delegate centrally retained funding are as follows.

Exception 1 – Where maintained schools agree that a service should be provided centrally.

The proposal is that the Authority retains the whole amount for maintained schools for the items below:

• Support for schools in financial difficulty;
• Allocation of contingencies;
• Free school meals eligibility;
• Insurance;
• Licences/Subscriptions including Schools Broadband;
• Staff costs- supply cover;
• Support for minority ethnic pupils or underachieving groups;
• Behaviour support services; and
• Library and museum services.

Maintained schools in each phase will need to collectively agree through Schools’ Forum for the authority to retain the funding within Exception 1.

Exception 2 – Historic Commitments

Funding for historic commitments is retained by the Authority.

• Contribution to combined budgets;
• Termination of employment costs; and
• Prudential Borrowing Costs.

The Authority will not be allowed to retain more than the amount retained in 2013/14.

Exception 3 – Statutory Functions of the Local Authority

• Co-ordinated admissions scheme;
• Servicing of the Schools’ Forum;
• Carbon Reduction Commitment; and
• Capital Expenditure from Revenue.

The funding for the above items cannot be delegated as it relates to the statutory functions of the Authority.

The rationale for proposing to retain funding under Exception1 and Exception 2 is that for the majority of maintained schools the amount per pupil that will be delegated to schools does not allow the economies of scale that the Authority has and therefore schools may find that they have insufficient funding to buy in the required level of service.

Schools should note that the amount per pupil to be delegated for licences and subscriptions includes the broadband connectivity contract which, again due to economy of scales schools may find that individually costs are higher than the funding received.

If schools opt not to allow the Authority to retain funding, the Authority may not be able to provide services to schools and schools may find difficulty in securing services from alternate providers within the funding that has been allocated.

Financial Model

Annex A shows for each school and academy the overall effect of the proposed new Formula for Funding Schools compared to the current Formula.

The new Formula has been modelled using the data that was used to calculate 2013/14budget shares. The figures are illustrative and must not be taken as final allocations.

High Needs Funding

Schools will continue to be required to fund the first £6,000 of each statement of special educational needs. The £6,000 was a recommendation in 2013/14 but is mandatory in 2014/15.

It is proposed to continue to fund top-up funding at the same rates as in 2013/14 for Special Schools and Enhanced Provision in mainstream schools. In 2013/14 top-up payments were made for places that were empty for either a part year or full year. It is proposed not to provide top-up funding for places in Special Schools or Enhanced Provision in mainstream schools until the place has been filled.

Top-up funding will be calculated based on the planned places in each school. For 2014/15 top-up funding will be provided at the start of the financial year for all places taken up in the January Census. The remaining funding will be held as a contingency and schools will receive a pro-rata share of the top-up funding depending on when the place is taken up. If a place remains empty for the whole financial year no top-up funding will be received.

The Authority currently funds provision for Speech Therapy totalling £387,000. It is proposed to increase this funding by £200,000. There are very different arrangements in different parts of the County for speech therapy which relate to the different contracts set up by the previous Primary Care Trusts. There is an opportunity with the new Clinical Commissioning Groups to review this. However, it is clear that the contribution from DSG is also at a low level (it is reported that the figure in Hertfordshire is closer to £3m). It is proposed to review with special schools at the provision for speech therapy over the coming year and to develop a fresh approach. This is likely to require additional funding from the High Needs Block. The additional £200,000 is proposed as a step towards what is likely to be needed.

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