Schools Forum January 2016 Item 5

Schools Forum January 2016 Item 5

Date:

21 January 2016 / Item
5 /

Type of report:

Information
Report title: / Provisional 2016-17 Dedicated Schools Grant Funding Allocation
Author name
and contact details: / Mustafa Salih

Officer to present the report: / Mustafa Salih

Executive Summary

This report sets out the provisional Dedicated Schools Grant (DSG) allocation for 2016-17 and provides details of the changes in comparison to those for 2015-16.

Schools Forum Actions

The Schools Forum is asked to note the:

·  provisional increase to the DSG allocation of £3.88m (Section 2.0);

·  details of the allocations for each funding block (Appendix A);

·  the significant number of adjustments expected during the year (Appendix B);

·  the proposed approach to managing differences between estimated and provisional funding allocations in year (Paragraph 3.3);

1.0 Background

1.1 On 17 December 2015, the Education Funding Agency (EFA) announced the Schools Revenue Funding Settlement: 2016-17, including initial DSG allocations.

1.2 This report provides the Schools Forum with an overview of the settlement, including changes in comparison to 2015-16.

1.3 The remaining items on the agenda consider the current proposals for 2016-17 budget setting including:

·  Mainstream school budgets, provides details of the submission to the EFA in January 2016 using their budget pro-forma;

·  Early years funding provides details of the Early Years Single Funding Formula rates applicable to early years providers (subject to the outcome of the consultation);

·  High needs funding provides details of the proposed funding rates applicable for high needs pupils in Southwark’s schools.

2.0 2016-17 Dedicated Schools Grant Allocation

2.1 The provisional DSG allocation, before deductions for academies recoupment and the high needs place element is £297.99m; an increase of £3.88m. A summary of the allocation and comparison to 2015-16 is included in Appendix A.

2.2 The DSG continues to be set out on in three blocks; schools block, early years block and the high needs block. Schools Forum members are asked to note that, as in previous years, there have been no inflationary increases applied by the government to the DSG allocations.

2.3 There continues to be little account taken of High Needs pressures as the High Needs Block has only increased marginally by £400k. The EFA’s expectation continues to be that pressures within High Needs budgets are managed by local authorities from within the overall DSG allocation.

3.0 In-year adjustments

3.1 The provisional 2016-17 DSG allocation is yet to be finalised and will be subject to further adjustments expected relating to each of the funding blocks. The adjustments expected and approach used in setting the DSG budget is set out in Appendix B.

3.2 There are now a significant number of adjustments that will need to be made to the provisional allocations announced in December 2015. This, as previously reported, represents significant risks to the DSG, with the associated funding changes having to be managed in-year, that is after setting the budgets for schools and the DSG.

3.3 The Schools Forum is asked to note the risks associated with these in-year funding changes. The Local Authority (LA) is proposing to manage the risk of differences between the estimated and actual funding using the current contingency held in reserves. If any additional funding is allocated to Southwark after the budget is set this will be added to the contingency, and any decrease in funding will reduce the contingency held. This methodology will minimise the need to re-determine schools budgets. The level of the updated contingency will be considered as part of the 2017-18 budget setting process. Any such increases or decreases will be reported to the Schools Forum.

4.0 Schools Budget 2016-17

4.1 The provisional 2016-17 DSG allocation of £297.99m has to fund all areas of the Schools Budget including: schools’ delegated budgets, High Needs costs, Early Years provision and central functions such as admissions etc. Over recent years expenditure on Special Educational Needs has steadily increased primarily due to increasing numbers of pupils with special educational needs. At the same time funding for the High Needs Block has seen very little growth and the Government’s expectation is that any SEND funding pressures are to be managed by Local Authorities from within their overall DSG allocation.

4.2 The following table shows a picture of increasing SEND pupils within Southwark:

4.2 The biggest pressure area relates to Autism Spectrum Disorder (ASD) pupils, which is an area experiencing significant growth while at the same time there are very few vacant places within Southwark. When a pupil presents with ASD they usually have to be found a place in an independent or non-maintained school, which tend to be very expensive (upwards from £40k per year.

4.3 In addition the SEND related demands on all schools and particularly secondary schools have grown. Base funding for Special Schools and top-up funding for mainstream Schools are other areas under budgetary pressure.

4.4 Post 16 SEND is another significant growth area. Prior to September 2014, local authorities only had responsibility for SEND up to 19 years for those with eligible need. This has now increased to 25 years without any increase in funding.

4.5 Over the longer term Southwark has plans to create more SEN places and post 19 places, but this is a long term plan and not easily achieved as the local authority can no longer open its own maintained schools.

4.6 This leaves Southwark with the shorter term issue of ensuring there is sufficient funding within the Schools Budget and the High Needs Block to ensure SEND placement costs can be met. The forecast overspend in expenditure on SEND placement costs for the current financial year is £1.45m and projecting this forward into 2016-17 means the forecast for growth for SEND in 2016/17 is £2.08m. As the DSG is growing by £3.88m this leaves £1.8m (£3.88m - £2.08m) of growth funding available for Schools Delegated Budgets. Item 6 on this Agenda relating to Schools Budgets for 2016-17 and the Authority Proforma Tool Submission uses these figures to calculate School budgets for 2016-17.

Schools Forum actions

4.1 The Schools Forum is asked to note this report.

Schools Forum January 2016 Item 5

Schools Forum January 2016 Item 5

Appendix A

DSG funding comparison

2015-16
(£m) / 2016-17
(£m) / Change
(£) / Details
Schools Block (maintained schools and original recoupment academies) / £228.34 / £231.81 / £3.47 / Based on 2016-17 rate*; £6,462.58 per pupil.
Estimated Pupil number increase of 537 pupils
Estimated Early years block (3 & 4 year old funding) / £23.56 / £23.56 / £0.00 / Based on 2016-17 rate; £8,212 per pupil. Estimate based on January 2015 data.
Estimated 2 year old funding / £3.30 / £3.30 / £0.00 / Based on 2016-17 rate; £5,766.50 per pupil. Estimate based on January 2015 data – 573 pupils.
Estimated Early years Pupil Premium / £0.36 / £0.36 / £0.00
High needs block / £38.51 / £38.91 / £0.400 / Based on the 2015-16 cash high needs block plus share of additional funding allocation
Additions ( Induction for NQTs) / £0.04 / £0.05 / £0.01
Total DSG Before Academy Deductions / £294.11 / £297.99 / £3.88
Academy High Needs Places funded by EFA / -£1.83 / -£1.76 / £0.07
Academy Recoupment / -£102.13 / -£103.68 / -£1.55 / Estimate – still to be finalised by the EFA
£190.15 / £192.55 / £2.40

Appendix B

2015-16 DSG funding adjustments expected

Funding block / Adjustment / Based on / Expected timing / 2015-16 DSG budget assumptions
Schools Block / Deduction for academy recoupment / Final school budget pro-forma and academy conversions / End of April 2016 / Estimated deduction based on pro-forma calculation
High needs / Deduction for high needs places / Pre and post 16 high needs places funded by EFA / TBC / No change to 2015-16
Post 16 changes / Places planning change from resident to a location basis / TBC / Assumed no net impact on funding
Early years / Funding for three and four year olds / Funding updated for:
·  January 2016 census numbers;
·  January 2017 census numbers. / July 2016
July 2017 / Estimated funding based on the provisional DSG allocation (January 2015 census numbers). Final allocation will be based on 5/12xJan2016 + 7/12xJan2017 numbers
Funding for 2 year olds / Funding updated for:
·  January 2016 census numbers;
·  January 2017 census numbers. / July 2016
July 2017 / Estimated funding based on the provisional DSG allocation (January 2015 census numbers). Final allocation will be based on 5/12xJan2016 + 7/12xJan2017 numbers
Early Years pupil Premium / Funding updated for:
·  January 2016 census numbers;
·  January 2017 census numbers. / Summer 2016
Summer 2017 / Estimated funding based on the provisional DSG allocation (January 2015 census numbers). Final allocation will be based on 5/12xJan 2016 + 7/12xJan2017 numbers

Schools Forum January 2016 Item 5