June 2013

Funding reform update Arrangements and Changes for 2014-15

Contents ........................................................................................................................................................... 1 Funding Reform Update – June 2013 ............................................................................................................... 2 Introduction ................................................................................................................................................. 2 Consultation responses ................................................................................................................................ 3 2014-15 Reform Changes Summary ............................................................................................................. 4 Pupil-led funding...................................................................................................................................... 4 Prior Attainment ...................................................................................................................................... 5 Deprivation .............................................................................................................................................. 6 Looked After Children .............................................................................................................................. 6 Mobility factor ......................................................................................................................................... 7 Sparsity factor .......................................................................................................................................... 7 Lump Sum ................................................................................................................................................ 8 Falling roles .............................................................................................................................................. 9 Schools Forum ......................................................................................................................................... 9 SEN funding ........................................................................................................................................... 10 Next Steps ...................................................................................................................................................... 11 Minimum Funding Guarantee ................................................................................................................ 11 Academy pupil number adjustments ..................................................................................................... 11 National Funding Formula ..................................................................................................................... 11 Annex A

- Formula Factors for 2014-15 .................................................................................................... 12

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Introduction

Contents

Introduction The Department for Education (DfE) has released their updated funding reform arrangements for 2014-15 based on findings from the Review of 2013-14 funding. The full funding reform document can be found at the link below:

https://www.gov.uk/government/publications/school-funding-reform-findings-from-the-review-of-2013-to2014-arrangements-and-changes-for-2014-to-2015

The funding reform process began in 2012 with the aim of creating a fairer, more consistent and transparent funding system that would deliver even out the inconsistencies in funding across the country.

A new local funding formula was developed by local authorities with input from the Schools Forum in each county for the 2013-14 academic year, based on 10 criteria laid down by the DfE. This has been welcomed by the vast majority of schools and local authorities and has been a significant step towards a more transparent funding system.

A further review was undertaken in February 2013 to determine the funding changes required for the 201415 academic year to move ever closer to a National Funding Formula. The DfE visited numerous geographical regions and discussed the issues with numerous schools, governors, Schools Forums and local authorities to gain a better understanding of the real-world issues.

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Introduction

Funding Reform Update – June 2013

Consultation responses Although the consultation was public and available for anyone to make comments on, only 260 responses 

Local Authority

119

(46%)



School / Governor

119

(46%)



Other

22

(8%)

Introduction

were received in total, this is broken down as below:

The funding reform is not only based on the DfE’s own findings, but also quite substantially on the responses to the consultations. Considering the future impact these consultations can have, especially with the National Funding Formula on the horizon, we strongly urge everyone to respond and make their views heard so the DfE can make the most informed decision possible. 15 minutes replying to the consultation could result in thousands of pounds in extra funding for your school.

Disclaimer This document has been prepared for general interest and it is important to obtain professional advice on specific issues where necessary. We believe the information contained in it to be correct; while all possible care is taken in the preparation of this document, no responsibility for loss occasioned by any person acting or refraining from acting as a result of the material contained herein can be accepted by Randall & Payne.

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2014-15 Reform Changes Summary Pupil-led funding There is currently no minimum funding allocation percentage that has to be based on solely pupil-led factors. However for the 2013-14 year all but 2 local authorities allocated >=80% of their schools block funding through pupil-led factors.

The consultation in February asked if there should be a minimum percentage imposed, with the majority of responses saying there should not be a minimum level of funding allocated this way, citing that this would

2014-15 Reform changes 

Due to the majority of local authorities having a more pupil-led formula, which is what the DfE is aiming for, the DfE will be requiring a minimum of 80% of the schools block funding to be allocated through pupil led factors for 2014-15.



The AWPU rate for Primary’s is to be at least £2,000, and KS3 & KS4 is to be at least £3,000.

Gloucestershire proposed funding – AWPU Phase

Amount (£)

Primary

2,887.20

KS 3

3,761.80

KS 4

4,514.20

Gloucestershire proposed funding - Looked after children Not a funding factor being used.

Gloucestershire proposed funding – English as an Additional Language (EAL) £804.19 for both primary & secondary phases.

93.1%

The proposed Gloucestershire funding system means that 93.1% of the schools block funding is driven by pupil led factors.

Glos. schools block funding driven by pupil led factors

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2014-15 Reform Changes

limit local discretion.

Prior Attainment The optional prior attainment factor can be used by local authorities to target low cost, high incidence Special Educational Needs (SEN).

The review in February asked if the Early Years Foundation Stage Profile (EYFSP) data should still be used as an indicator of prior attainment, and if not then what alternatives should be considered.

A majority of the responses agreed this is still the best indicator available, however some local authorities expressed a concern that the EYFSP measures development rather than attainment and therefore could be

there was no better alternative and therefore a combination of factors could be used (prior attainment, deprivation and AWPU).

There were also concerns that the new EYFSP measure’s new threshold could have an unknown impact on the number of pupils identified.

2014-15 Reform changes – KS1 

In 2014-15 the EYFSP will be retained as the main indicator for prior attainment for primary aged pupils.



Pupils will qualify for the prior attainment factor, where they have not achieved a good level of development. This will include all those who have not achieved the expected level of development in all 12 prime areas of learning as well as maths and literacy.

2014-15 Reform changes – KS2 

Pupils will be identified as having low prior attainment if they fail to achieve a level 4 or higher in English or (previously and) a level 4 or higher in maths. The DfE expects such a change to mean that this revised measure would identify around 21% of pupils (previously 10%).

Gloucestershire proposed funding - Low cost, high incidence SEN Phase

Amount (£)

Primary

1,608.38

Secondary

4,524.78

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2014-15 Reform Changes

an unreliable measure to identify children who would need additional support. It was also recognised that

Deprivation In the majority of local authorities current funding for deprivation is determined on historic approaches, or a combination of historic approaches and an approach which minimised turbulence. This status quo approach was taken mostly because existing approaches seem to work and were widely accepted as appropriate and fair.

56% of the responses said there had been difficulties in applying the proposed new approaches (FSM, everFSM, IDACI index) to deprivation funding as they resulted in significant losses to schools with a high number

2014-15 Reform changes 

The DfE are continuing to ask that Schools Forums and local authorities determine locally an appropriate proportion of their schools block funding to allocate through this factor.



There will be no change in the allowable indicators for use with this measure in 2014-15.

Gloucestershire proposed funding – Deprivation Description

Amount (£)

Primary – FSM 6

860.96

Secondary – FSM 6

736.99

FSM 6 – Any child entitled to FSM in the previous 6 years

Looked After Children LA’s can currently use one of three measures with this factor, children who have been looked after for: a. one day or more; or

Most authorities selected this measure in 2013-14

b. six months or more; or c. 12 months or more.

2014-15 Reform changes 

The DfE will require local authorities that use the looked after children factor, to use the one day or more measure for both primary and secondary.

Gloucestershire proposed funding - Looked after children Not a funding factor being used.

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2014-15 Reform Changes

of deprived pupils.

Mobility factor This optional factor for pupil mobility aims to support schools with high levels of pupil mobility, therefore incurring additional costs. 58 local authorities used this factor in 2013-14. The review findings show the funding has been spread thinly across a large number of schools, and has not consistently targeted those schools that need the additional support.

Concerns have been raised that it currently doesn’t allow authorities to target funding suitably. A large number of responses indicated that a threshold of 10% of pupil count should be used to initiate this funding.



A 10% threshold will be applied to the mobility factor, with the aim that it will only support schools which experience a significant change in their pupil numbers.

Gloucestershire proposed funding – Mobility Not a funding factor being used

Sparsity factor This is a proposed new factor aimed at helping small rural schools. The majority of respondents supported the introduction of such a factor; those not in favour were mostly urban schools.

Most respondents were nervous about losing the lump sum in favour of the sparsity factor; the DfE recognise that the sparsity factor doesn’t necessarily replace the lump sum for all schools therefore it is expected that the lump sum will remain as it is.

2014-15 Reform changes 

The DfE will introduce an optional sparsity factor



This measure uses crow flies distances rather than actual travel distances due to the inability to secure a reliable travel distance measure.



LA’s can make exceptional applications for schools that have been excluded due to road distance being significantly higher than the distance as the crow flies.

Gloucestershire proposed funding – Mobility This will be based on split sites >1 mile apart, with a base rate of £42,006 and an additional £56 per pupil.

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2014-15 Reform Changes

2014-15 Reform changes

Lump Sum In 2013-14 LA’s were allowed to allocate an optional lump sum of up to £200,000. The main purpose of this factor is to provide sufficient funding to necessarily small schools which could not operate on per-pupil funding alone.

In many rural areas, due to the large number of small schools, LA’s expressed concern about being able to allocate a large enough lump sum because they have a large number of small schools.

A large number of respondents welcomed the option to have a variable lump sum, split between primary and secondary schools. The median lump sum suggested by respondents in this split scenario was £240,000 for secondary schools, and £150,000 for primary schools. There was also a suggestion of a tapered lump sum which related to school size.

2014-15 Reform changes 

The maximum lump sum for 2014-15 will be £175,000.



This lump sum can be differentiated by phase, provided that for each phase the maximum lump sum is not exceeded.



There is no ability for LA’s to vary the lump sum according to the size of the school.

The DfE’s aim is to put more money through the pupil-led factors, hence the ceiling imposed.

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2014-15 Reform Changes

The average single lump sum suggested was £174,000.

Falling roles The review looked into what is preventing good and necessary schools staying open in cases where population increase is imminent, and to see if there are any circumstances in which falling roles are unavoidable in the short term.

Respondents suggested that financial support should be available to schools in these circumstances. Some respondents felt that longer term financial planning for schools would mean that such population changes could be better managed.



The DfE will enable local authorities using top sliced DSG funding to create a small fund to support schools with falling roles in exceptional circumstances.

Schools Forum The majority of responses suggested that the changes imposed in previous reforms have made little if any difference to the operation of the forum. A number of concerns were raised where respondents felt their Schools Forum was not working as well as it should be; mostly due to representatives not cascading information among the constituents.

2014-15 Reform changes 

The DfE will require that all Forums include one elected representative from an institution (other than a school or academy) providing education beyond age 16 (this replaces the current requirement for a representative from the 14-19 partnership).

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2014-15 Reform Changes

2014-15 Reform changes

SEN funding There has been strong support for a new high needs formula factor; the main reasons cited were that the local authorities are already doing this using the high needs budget, and that it allowed funding to be more closely linked to the high needs pupils in schools.

There was also a reasonable number of objections to such a factor being used as it is felt that this would risk statements of SEN being produced even for comparatively low level SEN, because schools would be able to generate extra funding. This would defeat the purpose of the fund to meet the child’s real needs.

this threshold would be met by the school through its budget share and any extra high needs funding currently distributed by the LA. A substantial number of responses agreed with this proposal. Similarly a reasonable number disagreed on the basis that it would reduce flexibility and too distinct a change from the current approach. In 2013-14 funding the DfE strongly recommended the £6,000 threshold be used as a target.

2014-15 Reform changes 

The DfE will not be introducing a high needs formula factor in 2014-15, however they will continue to consider the case for future reform.



The DfE will make the £6,000 threshold a requirement in 2014-15.

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2014-15 Reform Changes

It was proposed in the review that a £6,000 cost threshold should be imposed, meaning that any costs below

Next Steps Local authorities, in conjunction with the Schools Forum, will now be developing their local formula for 201415. As a summary, the formula factors are at Annex A.

Minimum Funding Guarantee The protection imposed by the Minimum Funding Guarantee (MFG) will continue at the same level as last year minus 1.5% so as to protect the per pupil funding to avoid too much turbulence during this reform. The following are excluded from the MFG: 

lump Sum;



post-16 funding;



allocations from the high needs block, including those for named pupils with SEN;



allocations made through the Early Years Single Funding Formula (EYSFF); and



business rates.

Academy pupil number adjustments Academy budgets are re-based after the final budget is received to account for in year movements in pupil

calculating these adjustments. The DfE will involve academies and representative bodies during the summer and autumn of 2013 before making a firm decision.

National Funding Formula The National Funding Formula (NFF) is still set to be reviewed in the next Spending Review in 2015-16. This is when the NFF will be reviewed and designed only, not an implementation date. It is entirely possible that a NFF could be implemented for the 2016-17 academic year, or more likely later on. There is no information available on this as of yet so this is purely speculation.

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Next Steps

numbers. In line with funding simplification the DfE is considering introducing a simplified method for

Annex A - Formula Factors for 2014-15 Mandatory 1. Single per-pupil amount 2. Deprivation

No change from 2013-14

Optional 3. Looked After Children 4. SEN / Prior Attainment 5. English as an additional language 6. Pupil mobility 7. Post-16 provision

No change from 2013-14

8. Lump Sum

10. Split sites

No change from 2013-14

11. Rates

No change from 2013-14

12. PFI

No change from 2013-14

13. London Fringe

No change from 2013-14

Annex

9. Sparsity (New)

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CONTACT DETAILS For further information on anything contained within this report, please contact:

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