School Funding Arrangements for 2016-17
Northamptonshire County Council Consultation with Primary and Secondary Schools
September 2015
Contents
Purpose 4
Context 5
Northamptonshire’s School Funding Formula – Overview 7
Northamptonshire’s School Funding Formula – Areas covered by the Consultation 8
Consultation Questions 10
Appendix A: DFE statistics from Local Authorities 2015-16 funding formula
Appendix B: An overview of the potential impact of moving £4 million from the Secondary to Primary sectors over three years
Appendix C: The potential impact on individual schools of moving £4 million from the Secondary to Primary sectors over three years
Appendix D: Deprivation funding allocated to individual schools in 2015-16
Appendix E: Estimated reductions to add £1 million to the Alternative Provision budget
Appendix F: Split site criteria and rates
Appendix G: Schools receiving split site funding in 2015-16
Appendix H: Pupil Growth Fund criteria and rates
NOTE:
1. Please note that any reference to schools in this document applies similarly to academies unless stated otherwise.
2. Please also note that the elements of the Northamptonshire Schools funding formula is applied on the same basis to both maintained schools and academies. The difference is that maintained schools receive their 2016-17 funding from the Authority for the April 2016 to March 2017 period where academies have the same funding formula applied over the academic year September 2016 to August 2017.
Purpose
1. Schools, Head Teachers and Governors will be aware of the Department for Education (DfE) school funding reforms that came into force on 1st April 2013. These reforms resulted in major changes to funding formula factors for schools, academies and early years settings.
2. The DfE reforms and guidance defines what factors Local Authorities are allowed to use in funding Mainstream Primary and Secondary schools.
3. The purpose of this consultation document is to outline Northamptonshire County Council’s (the Authority’s) proposed changes to the school funding formula arrangements for 2016-17. The consultation also provides an opportunity for Northamptonshire primary and secondary schools to comment on the changes being proposed. This document:
a. Provides an overview of the proposed changes for 2016-17;
b. Incorporates and reflects the information presented to Schools Forum on schools funding
c. Provides the financial implications of any proposals that the local authority is considering for 2016-17;
d. Asks specific questions in respect of the proposals for Schools to express their views on the proposals; and
e. Provides information for individual schools based on the Authority’s proposals in this document. It should be noted that the indicative figures are based on current information and have not been updated for the October 2015 pupil numbers or other datasets that will be feeding into the calculation of the 2016-17 school budgets.
4. The deadline for responses to this consultation is 1st October 2015. We recognise that this is a relatively short timeframe and comes at the beginning of the new academic year. However we are constrained by the deadlines to return information to the DfE (31st October) and the requirement to consult with the Schools Forum on the 13th October 2015.
5. To respond to this consultation, please complete the on-line response form by no later than 1st October 2015 – the form is available via the following link:
http://www.northamptonshire.gov.uk/en/councilservices/educationandlearning/services/schlfin/pages/financeconsultations.aspx
6. Responses received will be analysed and shared with members of the Schools Forum after which the Authority will decide on the funding formula rates for use in 2016-17 to be submitted to the DfE.
7. As requested by Schools Forum members the Authority has arranged 2 consultation briefing sessions for Heads, Bursars and Governors to attend. We will initially apply a limit of a maximum of 3 attendees from any one school at each briefing.
These consultation briefing sessions are both on Tuesday 15th September.
a) Kettering conference centre 1pm to 3pm, and
b) Northampton School for Girls 6pm to 8pm.
If you wish to attend you will need to complete and submit the booking form on the Schools Finance Consultation web page:
http://www.northamptonshire.gov.uk/en/councilservices/educationandlearning/services/schlfin/pages/financeconsultations.aspx
Context
8. As with 2015-16 the Department for Education (DfE) School Funding arrangements for the 2016-17 financial year are prescriptive in nature with limited flexibility for varying local funding arrangements. The Dedicated Schools Grant (DSG) continues to be ring-fenced and separated into three blocks as set out below:
SCHOOL FUNDING SYSTEMSCHOOLS BLOCK / EARLY YEARS BLOCK / HIGH NEEDS BLOCK
9 The DfE school funding reforms that came into force on 1st April 2013 resulted in major changes to funding formula factors for schools, academies and early years settings. The reforms and guidance define what factors Local Authorities are allowed to use in funding Primary and Secondary schools.
10 The DfE limit authority’s to some 11 factors (as described in paragraph 16 below). Prior to this authorities used a range of formula factors reflecting local arrangements and agreements. In Northamptonshire we used between 40 and 50 formula factors/elements in calculating Primary and Secondary schools budgets for 2012-13.
11 Moving to common national formula factors from April 2013 had a number of benefits including:
a) Greater simplicity and understanding,
b) Allowing comparison between schools both in an individual authority and between authority’s,
c) Allowing easier comparison of funding between authorities and the production of these statistics by the EFA to inform authority’s annual reviews of its funding formula for its schools,
d) Making it easier for the EFA to replicate local authority funding formulas in calculating academic year budgets for academies, and
e) Creating a potential stepping stone towards a national funding formula for Primary and Secondary schools through greater consistency and transparency.
12 In July 2015 the DfE published their arrangements for school funding for 2016-17. The arrangements for 2016-17 cover the schools funding formula in the main. The intended direction of the funding reforms remains the same – simplicity and transparency.
13 Further still the current Government’s commitment to pursue fairness in funding was expressed in a written ministerial statement by Sam Gyimah on school funding on 16th July 2015 which included:
“it remains the case that a school in one part of the country can receive over 50% more funding than an identical school in another part of the country.
I am therefore committed to making schools and early education funding fairer and will put forward proposals in due course.
We recognise the links between funding for early education, schools and pupils with high-cost special educational needs. These are complex issues to consider, and we will consult extensively with the sector and the public on them.”
As more information from central government becomes available we will make sure the Schools Forum and schools are made aware and what this could potentially mean for Northamptonshire schools.
14 In addition the Authority has joined the f40 group of lowest funded education authorities. This supports and enhances the lobbying of the government for increased funding for Northamptonshire’s pupils. The f40 group had a significant influence in the additional Fairer Funding allocation that Northamptonshire schools are benefitting from in 2015-16. It has since been confirmed that this Fairer Funding allocation will be built into the DSG base position for future years which is a positive step by central government.
15 As agreed with the Schools Forum, schools have been in receipt of additional one-off funding via the formula funding over 3 years from 2014-15 to 2016-17. This means that from 2017-18 schools will experience the combined impact of the one-off funding ceasing, the impact of cost pressures and the impact of any changes in funding that are agreed and implemented. With reference to the additional one-off funding, schools must start planning financially for this ceasing in 2016-17.
Northamptonshire’s School Funding Formula – Overview
16. The factors used in the Authority’s 2015-16 school funding formula are set out in the following table for ease of reference.
Factor / Used in 2015-16 / Pupil Led FactorBasic per pupil entitlement (AWPU) / Yes – a mandatory factor / Yes
Deprivation (based on ever 6 free school meal numbers) / Yes – a mandatory factor / Yes
Pupil Mobility / No / Yes
Prior Attainment (Low Cost, High Incidence Special Educational Needs) / No / Yes
English as an Additional Language / No / Yes
Looked After Children / No / Yes
Lump Sum / Yes / No
Private Finance Initiative / Yes / No
Split Site / Yes / No
Rates / Yes / No
Post 16 / No / No
17. The above factors are applied in all Local Authorities schools funding formula. However authorities may use different factors from the national ‘list’ and apply differing levels of funding to different areas dependent on local priorities and decisions.
Northamptonshire’s School Funding Formula – Areas covered by the Consultation
18 An exercise has been undertaken to compare Northamptonshire’s school funding formula with those in other authorities and national averages.
19 Officers have worked with a Schools Forum working group and the Schools Forum at its meetings in May and July 2015 to identify where Northants differs significantly in its funding formula to other authorities and what if any action is required in response to this.
20. The areas being consulted upon are summarised here and then covered in more detail in the subsequent paragraphs:
a) Moving funding from Secondary to Primary schools so that over 3 years we can move to the national average ratio of 1:1.28 (Northants 2015-16 is 1:1.34) ,
b) Capping at 2015-16 total levels (i.e. not increasing) the total funding allocated through the deprivation factor of the schools formula as Northants is allocating more of the available schools budget to this element compared to both similar authority’s and national averages,
c) Moving £1 million of funding from Primary and Secondary schools Age Weighted Pupil Unit (AWPU) values so that the increased costs of Alternative Provision for permanently excluded pupils can be funded in 2016-17,
d) Reviewing the existing split site funding rates,
e) Increasing the Pupil Growth fund rates to reflect pay awards and on-cost increases, and
f) Adding the funding for new schools of set up and diseconomy costs to the Pupil Growth fund.
21. The DfE receive information from all authorities on their formula and publish statistics on these. The Local Authority in conjunction with Schools Forum have examined this information to identify where Northamptonshire’s funding formula differs significantly from similar authorities or to national averages. This comparison provided in Appendix A has identified 2 areas where it is felt changes are required in the values applied in Northamptonshire’s schools funding formula in 2016-17.
The Primary to Secondary Funding Ratio
22 The Primary to Secondary funding ratio for Northamptonshire is currently 1:1.34 and is above the national average of 1:1.28. The consultation includes 3 options on how £4million could be moved from the Secondary to the Primary sector over 3 years meaning that by 2018-19 the relative funding between the sectors would be in line with the national average. The options are:
i. Option 1: A reduction of the Secondary AWPU put into the Primary AWPU over a 3 year period;
ii. Option 2: A reduction of the Secondary Lump Sum by a total of £95k over a 3 year period with the funding put into the Primary AWPU over the same 3 year period; and
iii. Option 3: A reduction of the Secondary Lump Sum by £10k in year 1 and a reduction of the Secondary AWPU over 3 years with the funding put into the Primary AWPU over 3 years.
These options have initially been discussed by the Schools Forum and were considered the most suitable options to consult on if the move to the national average ratio is implemented. Other options were discussed but were not considered appropriate to consult on more widely.
The estimated impact of each of the 3 options proposed is summarised in Appendix B with the estimated impact on individual schools shown in Appendix C.
Deprivation Funding
23 The Northamptonshire schools funding formula distributes 13.98% of the schools funding formula via the deprivation factor using the Free School Meals Ever6 (FSMEver6) dataset. The national average is 8.44%.
Although a comparatively high percentage of the schools funding formula is distributed via the deprivation factor there is limited evidence that this is having a significant impact in all schools on progress and attainment of economically disadvantaged pupils. The gap in outcomes at KS2 and KS4 between vulnerable pupils and all pupils remains much higher than local, statistical neighbour and national averages and is not closing.
It is therefore proposed that the £58.3 million distributed to schools for deprivation via the formula in 2015-16 is capped i.e. not increased in 2016-17. This means that if the FSMEver 6 pupil numbers are higher for 2016-17 that the deprivation unit rates for Primary and Secondary schools will be reduced so that the £58.3 million cost of the deprivation formula factor is not increased. The recent annual increase in FSMEver6 pupil numbers (on a broadly like for like basis) is 5.4% for Primary and 4.7% for Secondary. If there is a similar increase in FSMEver6 numbers for 2016-17 there would need to be a reduction in the per pupil rates in order to remain at the same 2015-16 deprivation budget level. This could impact on the deprivation funding rates as follows:
· Primary £130 reduction (from £2,416 to £2,286) per FSMEver6 pupil
· Secondary £158 reduction (from £3,318 to £3,161) per FSMEver6 pupil
The funding individual schools received for deprivation in 2015-16 is shown in Appendix D.
Alternative Provision Funding
24 Schools should be aware that the volume and costs of permanent exclusions and placing these pupils in Alternative Provision is significantly increasing such that an overspend in this area is projected for 2015-16 and subsequent years. The projected overspend is estimated at £1 million for 2016-17. The increased costs are estimated as being £210,000 (21%) in the Primary sector and £790,000 (79%) in the Secondary sector. Action needs to be taken to account for these costs and budget accordingly.
It is therefore proposed to increase the Alternative Provision budget in 2016-17 by £1 million. The funding for this would need to be moved from the Schools Block to the high needs block in 2016-17, which is where the Alternative Provision budget and costs reside.