Meeting:

Schools Forum

Date:

26 January 2015

Subject:

Dedicated Schools Grant (DSG) Update and 2015/16 Funding Allocations

Report of:

Director of Children’s Services

Summary:

To note the update on the DSG and Growth Fund allocations for 2014/15. To approve the 2015/16 DSG allocations for De-delegation, Growth Fund, Admissions and School Forum. To note the 2015/16 funding announcements.

Contact Officer:

Dawn Hill, Priory House, Shefford

Public/Exempt:

Public

Wards Affected:

All

Function of:

Council

Reason for urgency (if appropriate) RECOMMENDATIONS: 1. 2. 3. 4. 5. 6. 7.

To note and comment on the update to the 2014/15 DSG allocation. To note and comment on the update to the 2014/15 Growth Fund. To approve the De-delegation of £30.82 for Schools Contingency (i) Primary (ii) Secondary phases. To approve the 2015/16 DSG allocation for Growth Fund to be set at £2M. To approve the 2015/16 DSG allocation for Admissions to be set at £260k. To approve the 2015/16 DSG allocation for School Forum to be set at £3k. To note the Department for Education funding announcement for 2015/16.

Background 1.

Since the beginning of the financial year 2006/07 local authorities have received allocations of DSG to finance the Schools Budget in each authority. The full DSG received must be applied to the Schools Budget in each authority; although authorities may provide additional resources in support of the Schools Budget should they decide to do so. From 2013/14 the Dedicated School Grant is split into three notional blocks; Early Years, High Needs and Schools.

2.

The School and Early Years Finance (England) Regulations 2013 define the local authority education budgets (the non-schools education budget, the schools budget, the central expenditure and the individual schools budget) and set out how local authorities are to allocate funding from the individual schools budget (ISB) to maintained schools and private, voluntary and independent providers of free early years provision (relevant early years providers) through a locally determined formula.

3.

The Regulations give effect to the decisions made to reform the school funding system through simplified local formulae, greater delegation to schools and new arrangements for funding pupils with high needs.

4.

The Minimum Funding Guarantee (MFG) for schools has been set at negative1.5% per pupil for 2014/15. The calculation has been simplified compared with previous years and the Regulations set out the factors which are excluded from the calculation.

DSG Budget Allocation 2014/15 5.

The distribution of the DSG for 2014/15 is based on the ‘spend plus’ methodology and is shown in three blocks (Early Years, Schools and High Needs).

6.

The following table illustrates the updated DSG allocation for each block and additions. The Schools block is based on October 2013 School census and the Early Years block has been updated for the January 2014 census. Block

Schools Early 3&4 year old funding Years 2013/14 Adjustment (Jan 14 Census) Pre 16 Post 16 non Schools High Post 16 in Schools Needs Growth & Place review Non Maintained Special Schools (NMSS) 2 Year Olds NQT (transferred from RSG) Deduction for Carbon Reduction Commitment (CRC) Total Allocation DSG

.

Revised Allocation July 2014 (£M) 145.670 10.296 0.386 21.530 1.717 1.139 0.415 0.011 2.480 0.053 (0.263) 183.434

7.

The Schools Block is based on a per pupil unit of funding of £4,144.47 multiplied by 35,148 pupils as reported on the October 2013 census.

8.

The Early Years Block is based on a unit of funding of £3,979.80 multiplied by 2,587 full time equivalent number of pupil as reported on the January 2014 census. The Early Years block has been updated to take into account 2013/14 adjustment based on January 14 census to cover the period September 2013 to March 2014.

9.

The High Needs Block is a single block for high needs pupils/students age 0- 24.

10. The 2014/15 funding for early education places for 2 year olds from lower income Households is to fund Statutory Places (£2,218k) and ‘trajectory building’ (£262k) to create non-statutory places in preparation for the increased entitlement. Allocations have been calculated based on the estimated number of eligible 2 year olds likely to receive provision in the area, using Free School Meals data for 4 to 6 year olds as a proxy.

11. Funding for the cost of monitoring and quality assuring NQT induction is also included in the DSG. 12. As a result of state funded schools in England being withdrawn from participating in the CRC Energy Efficient Scheme a deduction is made to the DSG to compensate the Exchequer for the loss of revenue resulting from this change. 13. The following table represents the distribution of the 2014/15 DSG based on the Academy conversions as at December 2014 (48).

Schools EY High Needs Total

DSG £’000 145,513 13,144

ISB Academies £’000 80,949 0

Revised DSG £’000 64,564 13,144

ISB Schools £’000 63,000 9,044

24,777 183,434

2,841 83,790

21,936 99,644

8,340 80,384

Central Spend LA Academies £’000 £’000 1,564 0 3,384 716 10,115 15,063

3,481 4,197

14. The centrally retained DSG of £19.3M is further analysed in the table below.

Services Special Education Needs (Inc Post 16) Academies Statements/Early Years Two Year old Funding Growth Fund DSG Contribution to Central Overheads School Admissions School Contingency Copyright Licences Teachers Unions & Professional Associations Early Years Contingency School Forum Total CE

DSG £’000 9,396 4,197 2,480 1,000 719 260 105 142 54 904 3 19,260

Local Authority Assurance Statement 15. The Department has decided that it is no longer necessary to collect two assurance statements for the DSG. LAs will now only be required to submit an annual outturn statement, confirming that the DSG received by the authority was fully deployed in support of the schools budgets in accordance with the conditions of the grant and The School and Early Years Finance (England) Regulations 2013. However, the statement has now been expanded to include a Non Maintained Special School (NMSS) statement and Fraud cases reported in schools statement. 16. The NMSS statement requires confirmation that based on the LAs work in reviewing Individual Placement Agreements for high needs pupils/students within NMSS, nothing has come to their attention that causes them to believe that the learners reviewed were not correctly defined as high needs students.

17. The Fraud cases statement requires the confirmation of the number and value of fraud cases reported in schools and the number of those that have been investigated and where appropriate action taken.

Growth Fund 2014/15 18.

The School and Early Years Finance (England) Regulations, Schedule 2, prescribes expenditure that may be deducted from the Schools budget before determining the Individual Schools Budget and held centrally. Growth Funding falls into this category and is for the purpose of expenditure due to significant growth in pupil numbers as a result of the LA’s duty under section 13(1) of the 1996 Act to secure that efficient primary and secondary education are available to meet the needs of the population and in order to make provision for extra classes in order to comply with the School Admissions (Infant Class Sizes) Regulations 2012.

19. Local Authorities are required to produce criteria on which any growth funding is to be allocated, and set out the circumstances in which a payment could be made and a basis for calculating the sum. The School Forum regulations requires the agreement of the School Forum for both the central spend on and the criteria for allocating funds. 20. The following table sets out the expenditure to 31 December 2014.

2014/15 Allocation 2013/14 B/F balance Growth Fund: Fairfield Park Lower Greenleas Lower Church End Lower Alameda Middle Etonbury Middle Redborne Upper Shefford Lower Russell Lower St Andrews Lower Roecroft Lower Stratton Upper Holywell School Robert Bloomfield Cranfield Academy Infant Class Size: Total Growth Fund

Budget £ 1,000,000

Spend £

Balance £

(217,831) (68,990) (131,029) (129,456) (65,768) (286,843) (164,600) (61,903) (34,002) (42,225) (75,942) (56,612) (24,165) (63,404) (5,700) 1,000,000

(1,428,470)

(428,470)

21. The revised School and Early Years Finance Regulations 2013 allows LAs to carry over any unspent money from the 2014/15 growth and infant class size funds to be used for the same purpose in 2015/16. The overspend for 2014/15 will be the first call on the 2015/16 allocation for Growth Fund.

22. Where an LA makes a growth fund payment to an academy for the period April to August, the DfE will make an appropriate recoupment adjustment. Growth fund adjustments will not be made for “diseconomies of scale” or “start-up” funding. The final pro-forma to be submitted to the EFA will include a request to adjust the recoupment by £248k. Any adjustment approved by the EFA will be added back to the Growth fund for 2015/16.

2015/16 Centrally Retained Budgets De-delegated services 23. Funding for de-delegated services must be allocated through the formula but can be de-delegated for maintained mainstream primary and secondary schools with Schools Forum approval. De-delegation is not an option for academies, special schools, nurseries or PRUs. In the case of special schools and PRUs, the funding to buy services will be included in any top up payments. Any decisions made to de-delegate in 2014/15 relate to that year only, new decisions are required for any service to be dedelegated in 2015/16. Schools forum members for primary maintained and secondary maintained schools must decide separately for each phase. Funding for these services will then be removed from the formula before budgets are issued. The services which may be de-delegated include: Contingencies (including schools in financial difficulties and deficits of closing schools) Staff costs supply cover (e.g. trade union and public duties) Where de-delegation is agreed, middle schools will be treated according to their deemed phase (Secondary). Any unspent de-delegated funding remaining at the yearend should be reported to Schools Forum. Funding may be carried forward to the following funding period as with any other centrally retained budget, and can be used specifically for de-delegated services if the authority wishes. Centrally retained services 24. Funding for some services can be centrally retained before allocating the formula, with the agreement of the schools forum. A number of these services are subject to a limitation of no new commitments or increases in expenditure from 2014/15 and school forum approval is required each year to confirm the amounts on each line. The services which can be retained centrally include: Funding for significant pre-16 pupil growth, including new schools set up to meet basic need, whether maintained or academy Funding to enable all schools to meet the infant class size requirement Admissions (limitation of no new commitment) Servicing of schools forum (limitation of no new commitment) When using funding held centrally within DSG, other than funding that has been dedelegated by maintained schools, the authority must treat maintained schools and academies on an equivalent basis. Any unspent growth funding remaining at the yearend should be reported to Schools Forum. Funding may be carried forward to the following funding period as with any other centrally retained budget, and can be used specifically for growth if the authority wishes.

Contingencies 25.

The LA has estimated that the closing schools deficits for 2015/16 will exceed £1M and is proposing that £30.82 per pupil is de-delegated for both Primary and Secondary phases. This will give an estimated total de-delegated contingency budget for 2015/16 of £500k. This will ensure continued effective delivery of the full curriculum for those children in the schools until the point of closure. A project group has been set up for each of the schools to provide support and challenge until the date of closure.

26. The consultation held with schools in the Autumn term asked for consideration for funds to be held for this purpose. 37 responses were received, of which 22 (59%) agreed to a de-delegated amount of £31.23, higher than the amount currently proposed. 5 responses disagreed. Growth Fund 27. Central Bedfordshire is an area that will see significant growth in school aged children over the coming years, triggered by the increase in birth rate (which is impacting now and for at least the next five years), and by the rate of local housing development that is forecast over the next 25 years. The Council's School Organisation Plan outlines the pattern of this growth across phases and its New School Places Programme establishes an investment strategy for major projects to ensure that the council continues to meet its statutory obligations to provide sufficient high quality school places. 28. LAs are required to produce criteria on which any growth fund is to be allocated and to 3 consult with schools forum on the total sum to be top-sliced. The ‘School Funding Reform : Arrangements for 2015/16’ Forum paper circulated to School Forum members at end of October 2014 proposed both the criteria and total sum to be held for 2015/16 (£2M). This was agreed in principle to enable the proforma APT return, required at the end of October, to be submitted to the EFA. The EFA has subsequently checked and agreed the criteria as compliant with the regulations. 29. The LA formally proposes the centrally retained budget for Growth and Infant Class Size requirements for 2015/16 as £2M. Admissions 30. The LA proposes that the 2015/16 budget for Admissions remains at the 2014/15 level of £260k. The budget funds the 6 officer team to work on behalf of the Council as the admissions authority for community and voluntary controlled schools and also to coordinate the admission arrangements of all schools and Academies in Central Bedfordshire. A further officer has been recruited to the Team in 14/15 to provide additional support with the increasing complexity of admission arrangements in Central Bedfordshire as a result of schools changing age ranges and an increased number of own admission authorities. Despite this, and with additional income from own admission authority schools and Academies who buy back services for which they are statutorily responsible, the LA is able to sustain the service at the historical budget level.

School Forum 31. The LA proposes that the 2015/16 budget for servicing the school forum remains at the 2014/15 level of £3k. The budget funds the subscription to the F40 group, currently £1k (reduced from £2k in previous years), meeting expenses and training/ travel costs for members. School Funding Settlement 2015/16 32. On 17 December 2014, the Department for Education (DfE) announced details of the .1 Dedicated Schools Grant (DSG) for 2015 to 2016. The DSG remains split into three notional blocks; School, High Needs and Early Years. School Block 33. The Schools Block is calculated based on school block unit of funding (SBUF) announced in July 2014 plus a cash transfer to bring non-recoupment academies into LAs overall budget calculation. For CBC the SBUF is £4,289.09 (this after the CRC deduction of £7.51) an increase of £144.62 from 2014/15. Central Bedfordshire’s pupil numbers based on October 2014 census data has increased by 718 pupils to 35,866. 34. The DfE announcement in July 2014 that it will calculate an addition to authorities’ 2015/16 DSG to maintain a principle of cash neutrality when non-recoupment academies transfer into the DSG, subject to there being no major change in the local formula. The DfE has made a cash transfer (£341k) for Central Bedfordshire’s University Technical College (UTC) and this is based on what the UTC would have received in the 2014/15 formula based on the pupil numbers in the October 2014 census, uplifted by the Minimum Funding Level (MFL) increase for relevant authorities. 35. To protect schools from significant budget reductions, the Minimum Funding Guarantee is continuing to ensure that no school sees more than a 1.5% per pupil reduction in 2015/16 (excluding sixth form funding) compared with 2014/15. High Needs Block 36. The High Needs Block for 2014/15 has been carried forward plus: Increase in places for academic year 2015 to 2016 Additional top-up of £47m distributed based on the 2-19 aged population in each LA. Early Years Block 37. The Early Years Block will include: The three and four year old entitlement – set at the same per pupil rate as in 2014/15 (for CBC £2,587). Initially, this has been multiplied by pupil numbers from the January 2014 early years census and school census to produce a provisional allocation. This will be updated in July 2015 based on January 2015 pupil numbers; and in July 2016 based on 5/12ths of the January 2015 pupil numbers (to cover the April 2015 to August 2015 period) and 7/12ths of the January 2016 pupil numbers (to cover the September 2015 to March 2016 period).

The early years pupil premium (EYPP) – a provisional allocation as announced in October 2014. It will pay early years providers an additional £300 per year for each eligible child that takes up the full 570 hours with them. This equates to an hourly rate of 53p per child per hour. The indicative allocation for Central Bedfordshire Council is estimated at £171k. The Department will conduct a survey in the autumn 2015 to check take-up of the EYPP. Any adjustments required to allocations following the survey will be made in January 2016. Funding for disadvantaged two year olds for which the hourly rate was announced in October 2014 (for CBC at £5.03). The initial allocation for 2015/16 will be made in June 2015. The allocations will be based on number of eligible children participating (instead of demographic information) in early education as recorded in the January 2015 early years census and school census. This may cause a pressure for CBC for which an Early Years contingency will be held. 38. The table below illustrates the indicative DSG revenue allocation for 2015/16. Block

Schools Block Cash Transfer (Non-recoupment Academies) 3&4 year olds funding Early 3&4 year olds adjustment (Jan Census) Years Indicative EYPP Pre 16 High Post 16 non Schools Needs Post 16 in Schools Growth & Place Review Additional top-up Non Maintained Special Schools 2 Year Olds funding NQT Deduction for CRC Total Indicative Allocation DSG Schools

2014/15 Allocation (M) 145.670 0.000

2015/16 Allocation (M) *153.830 0.341

10.296 0.385 0.000 21.530 1.717 1.139 0.415 0.000 0.011 2.480 0.053 (0.263) 183.434

10.296 Tba (Jul 15) 0.171 21.530 1.717 1.139 0.765 0.233 0.011 Tba (Jul 15) 0.054 See note * 190.087

39. As in 2014/15 the DSG will include funding for the cost of monitoring and quality assuring of NQT induction. The CBC’s allocation for 2015/16 is £54k. 40. *Following the Department for Energy and Climate Change’s consultation in 2012, schools were removed from the main scheme in 2014/15. LAs are no longer required to administer the CRC on behalf of Schools. For 2015/16, a simple deduction of £7.51 per pupil will be made to DSG allocations. In 2014/15 the CRC deduction was £263k, for 2015/16 this is estimated to be £269k. 41. As in previous years, to protect LAs with falling pupil numbers, a cash floor of minus 2% has been applied to the DSG allocations. This will ensure that no authority will lose more that 2% of its budget in cash terms.

42. The Department has agreed with the following agencies to purchase a single national licence managed by the Department for all state-funded schools in England: Christian Copyright Licensing International (CCLI) (new for 2015/16); Copyright Licensing Agency (CLA); Education Recording Agency (ERA); Filmbank Distributors Ltd. (for the PVSL); Mechanical Copyright Protection Society (MCPS) (new for 2015/16); Motion Picture Licensing Company (MPLC); Newspaper Licensing Authority (NLA); Performing Rights Society (PRS) (new for 2015/16); Phonographic Performance Limited (PPL) (new for 2015/16); and Schools Printed Music Licenses (SPML) 43. The DfE will send local authorities details of the charge separately in early January 2015. The amount to be charged will be around two thirds higher than in 2014/15. This takes into account the four additional national licences, the rise in the number of pupils; the fact that local authority maintained nursery schools will now be covered for their relevant licences, and the inclusion of non-recoupment academies. In 2014/15 CBC paid £142k, it is estimated that for 2015/16 this will be approximately £237k. Pupil Premium Grant 44. On 11 November 2014, the DfE announced an extra £22.5m funding for the pupil premium in primary school in 2015/16. 45. Schools will continue to receive £1,900 for pupils who are looked after or who have left care through adoption or other circumstances. Secondary schools will also continue to receive £935 for every pupil who has been registered for schools meal in the past six years. Primary schools will now receive £1,320, an increase of £20. Service children will continue to attract £300 per pupil. The actual allocation will be announced in June 2015. Education Service Grant (ESG) 46. As in 2014/15 the grant will be allocated to local authorities on a per-pupil basis. The ESG General Funding Rate for local authorities in 2015/16 is £87 per pupil in mainstreamed schools, £326.25 per pupil in PRUS and £369.75 per place in Special Schools. 47. October 2014 census data will be used to calculate the General Funding pot for 2015/16. For CBC the initial allocation for 2015/16 will be £1.7m and this will be adjusted on a quarterly basis during 2015/16 financial year to take into account academies opening since 30th November 2014. 48. There will be a flat rate of £15 per pupil allocated to local authorities for the statutory duties that do not transfer to academies, known as retained duties. The total ESG retained duties funding pot is £15 multiplied by the number of pupils aged 3 to 19 in maintained schools and academies. For CBC the indicative Retained Duties funding pot for 2015/16 will be £608k.

49. There will be no top-up for academies in academic year 2015 to 2016. The General Funding Rate for 2015/16 is £87 per pupil in mainstreamed academies, £326.25 and £369.75 per place for alternative provision (AP) academies and special schools academies respectively. The ESG Statement of final arrangements for 2015/16 provides details of protection arrangements which will be applied in order to prevent large reductions in academies budgets. Universal Infant Free School Meal Grant (UIFSM) 50. This funding is available from September 2014 to provide all infant –age pupils with a free school meal. For 2014/15 revenue funding was based on a rate of £2.30 for each meal taken by pupils who will become newly eligible for a FSM as a result of the UIFSM policy. Rates for 2015/16 will be confirmed by DfE in due course. F40 update: 2016/17 and beyond schools funding 51. At the f40 Executive Committee meeting on 6 December 2014 proposals were discussed regarding the national funding formula for schools. Briefings will be held for MPs in February 2015. However, the final position for 2016/17 onwards will depend on: The total budget that DfE will have to spend, which will be agreed in the next spending review Any funding policy changes that the new government decides to make before allocation of the 2016/17 funding. These decisions will be made by the new Government after the general election.

Appendices: None