Agenda Item:

CUMBRIAN SCHOOLS’ FORUM – SCHOOL BUDGETS WORKING GROUP

DRAFT Notes of the meeting of the School Budgets Working Group held on Wednesday 13 November 2013, The Old Court Room, The Courts, Carlisle.

Present: Louise Anderton (Small Schools), Dawn Boyes (Keswick School), Linda Dean (Barrow Primary), Karen Forsyth (Business Manager, West Lakes Academy), Bernard Gummett (Special Schools), John McAuley (RC Diocese), David Nattrass (Eden Primary and Chair of the Group), (Copeland Secondary), Alan Rutter (Teachers’ Associations)

Helen Hamilton (LA), Amanda Shaw (LA), Nicola Shiels (LA)

Apologies: Lisa Balderstone, Anne Burns, Steven Holmes, Michael Mill, Lynette Norris, Ty Power

1.  Declarations of Interest
There were no declarations of interest at this stage.
2.  Notes of the Meeting held on 10 September 2013
Subject to a correction of name, the notes of the meeting of the School Budgets Working Group held on 1o September 2013 were agreed as an accurate record.
Matters Arising
i)  Support to Schools Forum – This was an important issue. Schools Forum members needed the information and tools to properly inform their discussions and subsequent decisions. This item would be discussed in more detail later in the meeting.
ii)  Primary/Secondary Funding Ratios – A question about who could actually identify items for consideration by either the Forum working groups, or the full Forum was raised. The chair of the working group was happy to be approached regarding the inclusion of an item on the agenda. The chair of the Forum shared this view and it was also pointed out that any items considered at the working groups would be reported to the full Forum through the notes of working group meetings. There was a general agreement that if members felt that there was an important issue, it was better to develop a mechanism whereby that issue was considered as a formal agenda item.
As a result, there was a request for a breakdown of primary/secondary budgets for a period of approx 6 years to enable the Forum to look at trends and comparisons with other LAs. In relation t this request, it was suggested that Cumbria was the second worst LA in terms of funding with the secondary sector in Cumbria performing poorly in comparison with the rest of the country. Ofsted would be inspecting 16 Cumbrian secondary schools over the next 3 weeks with a suggestion that all secondary schools would be inspected shortly.
This was a historical issue and there had been a number of years when it appeared that the secondary sector had been funded more favourably. As a result it might be necessary to look back over a number of years to make comparisons.
Sparcity was also an issue in terms of the number of small schools, primary and secondary, across Cumbria.
It was reported that, in the move towards a National Funding Formula, there would be further changes to the formula. These would be subject to consultation next summer with the changes to be introduced from April 2015.
A report regarding primary/secondary funding ratios would be prepared for consideration at a future meeting.
3.  De-delegated Contingency Budget – Position at September 2013
On 21 June 2013, the Schools Forum agreed that a report detailing the forecast budget position on the de-delegated contingency budget would be presented at each Forum meeting. The forecast 2013/14 budget position on the contingency budget as at 30 September 2013 was attached as an appendix to the report. A projected underspend of £296,676 was reported. Any underspend on the budget at the financial year end would be transferred into the Dedicated Schools Grant reserve at the financial year end.
The original de-delegated contingency budget for 2013/14 was £1,583,544. An adjustment was made to this budget in July 2013 in respect of £102,000 that was moved to the Access and Inclusion Team. The Ethnic Minority Achievement Grant would no longer be received as a separate grant in 2013/14 and rather had been subsumed into the Dedicated Schools Grant. This grant formerly provided funding for the team to provide support to schools in respect of ethnic minority pupils. Therefore £102,000 had been transferred from the contingency budget to the team to enable the team to support schools in this way in 2013/14. The revised contingency budget for 2013/14 was therefore £1,481,544.
DfE guidance stated that the contingency budget could be used for three purposes:
·  Exceptional unforeseen costs which it would be unreasonable to expect governing bodies to meet
·  Schools in financial difficulties
·  Additional costs relating to new, reorganised or closing schools
£808,000 was forecast to be spent on schools in financial difficulties. However, this budget might not be fully spent depending on the decision taken by the Schools Forum on the allocation of this funding.
The forecast on the contingencies budget for 2013/14 was an underspend of £296,676. Any under or overspend on the budget at the financial year end would be carried forward into the Dedicated Schools Grant earmarked reserve.
The forecast on the contingencies budget at 31 August 2013 was £263,496. The increase in the underspend to £296,676 at the end of September 2013 related to the end of a need for adaptations at one school in respect of a disabled member of staff, offset by an allocation of funding to a school in respect of a long term Council approved change of age range (pro-rata AWPU funding was allocated).
There was a lengthy discussion regarding the use of the contingencies budget. As reported earlier, this could be used for 3 purposes, examples of use included costs associated with the clarification of compromise agreements or issues that occurred as a result of the latest school funding changes. It was suggested that some general principles about what could be covered would be helpful.
Some further discussion focussed on the strategic development of schools and longer term planning in terms of the viability of primary and secondary schools whilst taking account of local pressures, communities. etc. There was a view that the LA could have done more in terms of planning by developing and encouraging federation between schools more.
The Schools Forum Budget Working Group then noted the forecast budget position for the contingency budget. It was noted that as this was a de-delegated budget it only related to maintained schools.
4.  Dedicated Schools Grant Allocation 2013/14
The Dedicated Schools Grant budget for the 2013/14 financial year was approved by the Schools Forum on 16 January 2013. The total budget for 2013/14 was £328.047m comprising the £323.034m Dedicated Schools Grant allocation and an additional £5.013m that comprised clawbacks from excess surplus balances in 2011/12 and Dedicated Schools Grant reserves. Following recoupment in respect of academies, a revised Dedicated Schools Grant allocation for 2013/14 was issued in July 2013. This report updated the Schools Forum Budget Working Group on this revised grant allocation and the impact on the Dedicated Schools Grant budget for 2013/14.
Following the recoupment in respect of academies, the Local Authority was informed in July 2013 of its revised Dedicated Schools Grant allocation for 2013/14. This was £252.653m.
The revised budget for 2013/14 was £257.666m, comprising the updated grant allocation of £252.653m and the additional £5.013m relating to excess surplus balance clawbacks and reserves.
The decrease in the budget from that approved in January 2013 was £70.381m. The movement in the budget could be attributed to:
·  Recoupment of Schools Block Funding in respect of academies
·  Reduction in Early Years Funding following update of pupil numbers at the January 2013 census date
·  Increase in Post-16 High Needs Funding following the submission of a business case
·  Reduction in Resourced Provision Place Funding in respect of academies for the period September 2013 – March 2014. These are funded by the Education Funding Agency from September 2013.
·  Reduction comprising 5/12ths of AWPU funding in respect of Academy pupils in Resourced Provision who are funded through place funding in 2013/14.
It was anticipated that the Dedicated Schools Grant allocation for 2013/14 would be updated again in April 2014 to reflect early years pupil numbers at the January 2014 census.
In addition to the change to the budget explained in the table above, some movements between budget lines had occurred in 2013/14. The majority of these related to the High Needs Block and had been reported to the Schools Forum SEN, Social Deprivation, Access and Inclusion Sub-Group.
There was a £1.645m increase in the Post-16 High Needs Budget. This comprised the additional £0.744m of funding received following the submission of a business case to the Education Funding Agency. In addition, £0.901m had been moved from the Special Schools Budget to the Post-16 High Needs Budget. The funding of sixth form pupils in Special Schools had been budgeted from the Dedicated Schools Grant allocation, however, funding in respect of these pupils was received through the Sixth Form Grant. The Dedicated Schools Grant funding in relation to these pupils in the Special Schools could therefore be transferred within the High Needs Block to the Post-16 High Needs budget to support the pressures faced by this budget.
£0.102m had been transferred from the de-delegated contingency budget to the Access and Inclusion team, as detailed at 3, above.
There was a specific query relating to the revised arrangements for PRU funding and claims for funding from schools. Work to review PRU budgets was ongoing and these concerns would be taken into account. If any further clarification was necessary, this would be reported to a future meeting of the Schools Forum.
It was also noted that there would be implications in relation to statementing – SEN statements would be replaced by Education Health Care Plans with much more work being provided at school level - the knock on effect being the implications for schools.
There were a number of queries relating to centrally retained budgets and it was suggested that a further breakdown of the miscellaneous element of this area would be helpful.
The Schools Forum Budget Working Group then noted the updated Dedicated Schools Grant budget for 2013/14. This report would also be presented to the full Schools Forum on 3 December 2013.
5.  Schools in Financial Difficulty
As agreed by the Schools Forum at its meeting on 21 June 2013, there was currently a budget of £808,000 within the de-delegated contingencies budget for schools in financial difficulty. At the same meeting, the Schools Forum agreed criteria against which schools would be assessed to identify eligibility for this funding. Based on these criteria options for the allocation of this funding in 2013/14 were presented to the Schools Forum at its meeting on 10 October 2013.
The Schools Forum also asked that further information on the schools classed as ‘high’ and ‘medium/high’ in terms of LA concern over the deficit was presented for discussion and analysis by the Schools Forum Budget Working Group at its meeting on 13 November 2013.
On 21 June 2013, the maintained representatives of the Schools Forum agreed at the criteria for the allocation of funding for schools in financial difficulty in 2013/14.
Using the agreed criteria, the Schools and Learning Finance Team analysed the Cumbria maintained schools. The analysis showed that five schools would be eligible for assessment.
Further analysis was undertaken by the Schools and Learning Finance Team to identify how funding could be allocated to schools in financial difficulty. One option was to lower the deficit percentage level for eligibility. This could be lowered to 3% for all schools. Based on the criteria above, but including all schools with a projected deficit balance for 2013-14 of at least 3% meant that six schools would be eligible for assessment.
The analysis work showed that one barrier in the criteria which was preventing schools from being eligible for funding was the requirement for schools to be in receipt of the minimum funding guarantee. One option was to remove this from the criteria especially as there was uncertainty as to how long the minimum funding guarantee is in place. For schools with historic deficits, the presence of the minimum funding guarantee could be preventing the reduction of these deficits.
Analysis was also undertaken to identify the amount of funding actually lost by the schools with a projected deficit of 3% or more. This exercise excluded the impact of reducing pupil numbers as schools were expected to make changes in response to pupil number reductions.
Based on schools projecting a deficit of 3% or more in 2013/14, having a loss of funding of at least £10,000 from 2012/13 to 2013/14, meeting the criteria set out in the bullet points at 4.2, but not necessarily being in receipt of the minimum funding guarantee, the number of schools that would receive an allocation was seven.
Any surplus on the £808,000 schools in financial difficulty funding would be carried forward into the 2014/15 financial year in agreement with the Forum.
It was suggested, at the Schools Forum meeting on 21 June 2013, that the possibility of ‘writing off’ entrenched, historic deficits on schools should be considered.
There were 29 schools with entrenched historic deficits (over 3 years). The projected total deficit for these schools for 2013/14 was £3,086,948. Out of these 29 schools, 21 had received schools in financial difficulty funding. The schools were graded in terms of the Local Authority’s concern over the ability of the school to recover the deficit (low, medium, high). It should be noted that in principle, all schools in deficit were considered to be of highest concern to the Local Authority.