Agenda item

Funding Update for 2022/23 and the National Consultation on Completing the Forms to the National Funding Formula

Report of the Corporate Director for Children and Adults



Julia Holmes, Senior Commercial Business Partner, presented a report on the changes to the schools and high needs national funding formulas for the 2022/23 financial year, and on the Department of Education’s (DfE) ‘Fair schools funding for all’ consultation. The following points were discussed:


(a)  in the main, the basic structure of the schools National Funding Formula (NFF) is not changing in the 2022/23 financial year. However, funding allocated through the free schools meals Ever6 factor will be moving from using the previous year’s January school census to using the October school census. This removes the nine month lag in funding;


(b)  local authorities can set the minimum funding guarantee (MFG) between +0.5% to +2%.  The Council intends to set the MFG per pupil as near to the maximum of 2% as possible.  The indicative school budget allocations released in July 2021 were based on the pupils on the October 2020 school census, but the final funding allocations will be based upon the pupils on the October 2021 school census, and these will be notified to the Council in December 2021. In total, 81 schools in the city are still forecast to be in receipt of protection, so this means that the majority of schools will only see an increase of 2% in pupil-led funding per pupil;


(c)  the Council will receive the maximum allowable increase in high needs funding of 11% in the financial year 2022/23. Business rates are to be paid centrally by the DfE to the Council from 2022/23. Schools and academies will no longer be required to physically pay the invoices for business rates;


(d)  the Education and Skills Funding Agency (ESFA) has reduced historic commitments funding by a further 20% compared to the 2021/22 baseline, representing a total loss of income to the Council of £2.693 million during the 2020/21 and 2022/23 financial years. These funding cuts will be reflected in the Council’s Medium Term Financial Strategy, but the required savings will not be made from schools funding;


(e)  the DfE is progressing with its proposals to move towards a ‘hard’ schools NFF in the 2023/24 financial year, with the aim that all funding distributed by the NFF should be allocated to schools on the basis of the hard formula without further local adjustment. The Council’s approach mirrors the schools NFF already, so this should not represent a substantial change. However, the DfE will be running a transition and review process, as part of its implementation;


(f)  the main changes proposed by the DfE for the NFF are the introduction of new funding methodologies for allocating funding for premises, and for pupil growth. This will involve further consultation on allocating funding through the Private Finance Initiatives, exceptional circumstances and split sites factors. In terms of pupil growth, the DfE is proposing that local authorities will be asked to submit pupil number forecasts, and these will be funded on a standardised national funding criteria. Whether or not pupil growth is ‘significant’ at a given school will affect whether that school is eligible for additional funding, but the criteria for ‘significant’ has not yet been defined, so it is difficult to forecast the associated funding impact on the city’s schools, currently;


(g)  the Forum considered that, due to inflation, the increase of 2% to the pupil-led funding actually represents a funding cut, in real terms. It is vital that all eligible parents are encouraged to register for free school meals, as the FSM6 factor in the funding formula and the pupil premium represents access to important sources of funding for schools. Sign-up increased during the Coronavirus pandemic, but there are still likely to be eligible people who have not yet registered, and further means of engagement are being explored;


(h)  the Forum noted that it is important to understand the impact of the DfE basing its calculations on the October census. It welcomed that NFF review, but wondered how the potential impact could be measured accurately, to inform a collective response. The impact of the estimation of pupil growth on a school-by-school basis is a potential concern, thought the increase in the high needs funding at the 11% maximum is positive;


(i)  the Forum highlighted issues in the latest admissions process for pupils into schools, where it felt that there had been some potentially avoidable delays to admissions, meaning that schools might have missed out on the opportunity to secure further funding. The need to deliver the new School Admissions Code has affected the speed of the admissions process, but measures are in place to ensure that the admissions system is fit for purpose in meeting the required timetable. The improved system should now better reflect the admissions process going forward, and accelerate pupil applications;


(j)  the Forum also raised the processing of free school meals applications by the Pupil Benefits Team before the October school census. Staff capacity has been increased in the team and mitigations are in place to maximise access to the available funding, and work is underway to ensure that the process is as streamlined as possible;


(k)  the Forum was concerned that much less funding is coming to local authorities, making it far harder for them to support schools without making cuts elsewhere. It noted that there is a strong Education team at the Council, which should continue to engage with the DfE as actively as possible.


The Forum noted the report.

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