Agenda item

Presentation by Julia Holmes and Kathryn Stevenson, Finance Analysts, Children and Adults

Julia Holmes, Finance Analyst, gave a presentation on proposals for a National Funding Formula for schools, highlighting the following:

(a)  the Department for Education (DfE) has stated that the principle behind a National Funding Formula is to develop a funding system that supports every child to achieve their potential, whatever their background. They have stated that the new funding system will be fair, efficient, transparent, simple, predictable and get funding straight to schools;

(b)  the DfE have undertaken the first of two consultations on the implementation of the National Funding Formula. The following is currently proposed:

·  move to a school-level national funding formula from 2019-20, after two years’ transition where local authorities still be able to set the formula locally if they wish;

·  ring-fence the Schools Block during the transitional years so that all schools block funding is passed onto schools;

·  introduce a new Central Schools Block, meaning that there will be four blocks in total from the Dedicated Schools Grant (DSG) – Schools,
Central Schools, High Needs and Early Years;

·  the Pupil Premium will remain a separate grant;

(c)  there will be four factors in the formula:

·  per pupil costs, with different basic rates for primary, key stage 3 and key stage 4;

·  additional needs, including deprivation factors, low prior attainment and pupils who have English as an additional language;

·  a lump sum for all schools;

·  area costs, including sparsity funding for schools in rural area, rates, split sites, exceptional circumstances  and growth;

(d)  factors which are currently in the local formula which will not be in the national formula include Looked after Children, Mobility and Post-16;

(e)  the new Central Schools Block will be for ongoing duties that local authorities hold for maintained schools and academies. Funding will be distributed using a simple per-pupil formula;

(f)  the first stage consultation closed on 17 April 2016 and focused on the summary and the case for change. It does not include more details of the proposed weightings of the formulae as this will form part of the second stage consultation;

(g)  Nottingham City Council (NCC) responded to the first stage consultation, commenting particularly on the ring-fencing of funding blocks as it does not think this is best as there may be unforeseen pressures in certain areas. NCC also believes that the per-pupil rate should have separate key stage 1 and key stage 2 levels, and that it is not suitable to allocate funds to local authorities based on historic spend;

Kathryn Stevenson, Finance Analyst, gave a presentation on proposals for high needs funding reforms, highlighting the following:

(h)  a new funding formula is proposed for high needs, with a move from central to local government for the distribution of funds. All funding blocks will be ring-fenced so funds from other blocks will not be available for high needs;

(i)  the high needs funding formula will include the following factors:

·  basic unit of funding for pupils in specialist SEN institutions;

·  population;

·  health and disability, based on census data and disability living allowance;

·  low attainment, based on pupils not achieving level 2 in reading at the end of key stage 2, and pupils not achieving 5 A*-G GCSEs at key stage 4;

·  deprivation, based on pupils eligible for free school meals;

·  2016-17 spending level;

There will also be area cost adjustment to take account of the relative costs of teachers’ pay in different areas. The weightings of these factors within the formula are not yet known;

(j)  the proposal for funding alternative provision funding is to use population and deprivation factors.  It is likely that this will be distributed to schools rather than the local authority. There are no specific funding proposals for hospital education yet;

(k)  if high needs spend will be higher than the funding available, the DfE are proposing extra capital funding for the creation of new special schools, collaborative working between local authorities including sharing of services and extra help to ensure that institutions are as efficient as possible;

(l)  NCC responded to the first stage consultation, disagreeing particularly with the use of a population factor in the new formula and the use of free school meals for the deprivation factor rather than the Ever 6 free school meals measure. NCC also argued for the retention of flexibility to move funding between blocks and raised the urgency of a framework for hospital education funding;

The date of stage 2 for both consultations is not yet known but will be later this year.

RESOLVED to note the information in the presentation.