Agenda item

Report of the Corporate Director for People

Julia Holmes and Chris Ayriss, Senior Commercial Business Partners, presented the report, which detailed the 2022/23 Dedicated Schools Grant (DSG) outturn position and the updated reserve balance and associated commitments. They highlighted the following information:

(a)  the 2022/23 initial schools budget, as reported at Schools Forum on 25 January 2022, was £324.535m. The Education and Skills Funding Agency (ESFA) made in-year funding adjustments to the allocation of £321,000 resulting in a final budget of £324.856m for 2022/23;

(b)  a breakdown of the figures within the outturn summary of Table 2 is given to the Forum;

(c)  the underspend of £598,000 on the pupil growth fund in 2022/23 is mainly due to the remaining balance of the Schools Block of £427,000 that could not be equitably allocated to all schools through the National Funding Formula (NFF) during the budget process, being allocated to the pupil growth fund. This approach was agreed by the Forum in on 7 December 2011 in the report entitled “Proposed pupil growth allocation for 2022/23;

(d)  the underspend of £15,000 on the trade union cover is mainly due to the union not taking up all of its allotted allowance in 2022/23. The underspend will be taken into account when calculating the rate of trade union cover for the financial year 2024/25;

(e)  there is an underspend variance of £56,000 within the Central Schools Service Block. This is mainly due to Virtual School funding being substituted by funding from the Pupil Premium Plus Grant (PPPG);

(f)  in the Early Years Block spending, there is a total underspend of £347,000. There is an underspend of £142,000 in the funding for 2-year old funding for schools/providers. This is reflective of the slightly lower than expected participation rates in 2022/23 with 79% of applications being eligible with an average of 146.6 applications per month. The breakdown of applications for the year are as follows; Parents Applications – 55%, Family Information Service (FIS) – 26%, Childcare Providers – 15%, and Schools – 4%. The early learning programme for 2-year olds is the most frequent enquiry, representing 53% of all FIS activity;

(g)  the final position of 3 and 4-year olds funding shows a £100,000 overspend in 2022/23 which reflects the higher than anticipated participation rate;

(h)  the Early Years Pupil Premium achieved a small underspend of £4,000 which is close to the budgeted participation rate;

(i)  there continues to be significantly fewer applications for early years Disability Access Funding (DAF) compared to the Department for Education (DfE) projections underpinning the funding level. The underspend of £82,000 has been ring-fenced in reserves as there is an expectation from the DfE that this will be spent to support the inclusion of pupils with Special Educational Needs and Disability (SEND);

(j)  the underspend on the SEN Inclusion Fund (SEN IF) is anticipated and has been ring-fenced in reserves ready for distribution to settings to help support heightening speech, language and communication needs. With the revised eligibility criteria for the SEND IF, this eliminates any significant underspends in comparison to the prior year;

(k)  there is an underspend of £206,000 on the Early Years Central Expenditure in 2022/23. In addition, training savings were achieved through online training course delivery;

(l)  in terms of the High Needs Block, the largest share of the budget covered High Level Needs (HLN) support in mainstream schools, with £12.847m budgeted for 2022/23 and £8.995m of that budget actually spent, with an underspend of £3.852m reported. There was an £2.044m increase in actual allocations on 2021/22. Work commenced on the HLN secondary phase in Summer 2022;

(m)the Special Schools Summer Term is under budget by £221,000 as the forecast was set out with continuing vacant places at Oakfield;

(n)  Net Cross Border top-ups is substantially lower than forecast at £249,000. This is particularly hard to forecast as data needs to be shared with other counties;

(o)  another significant area of underspend in the High Needs Block is funding for provisions related to excluded pupils or those at risk of exclusion (Behavioural Pupil Referral Units (PRUs) and Alternative Providers (AP)), in which £7.224m was budgeted and £6.440m was spent, with a total underspend of £784,000;

(p)  the high needs funding growth available allowed the Council to build increases into the budget in a number of areas that had been over-spent in previous years or where there are demand pressures. This applies to the budgets for special schools, post-16 HLN top-ups in Further Education (FE) settings, independent/non-maintained specialist schools and Hospital and Home Education including Nurturing and Emotional Support Teams (NEST) asylum seeker provision. Spending in these areas increased compared to the previous year, but remained within the revised budget allocation; 

(q)   at the end of 2022/23 year, the DSG reimbursement for the education costs associated with residential placements was a £460,000 underspend;

(r)  the 11% underspend on Local Authority (LA) support services is across a range of teams, including the Inclusive Education Service (£295,000), £92,000 relates to SEN equipment, EY SEND, Behaviour Support Team and Therapy Costs. There is a significant demand for support from these teams and additional traded income from schools has exceeded the additional staffing costs to provide extra capacity. In 2022/23, the Sensory Occupational Therapy (OT) support budget of £80,000 showed a significant uptake, utilising £48,000 of the budget this year;

(s)  there is an overspend of £206,000 in the Hospital and Home Education provision, which includes NEST asylum seeker support, however this variance is offset by the variance in the Fair Access budget underspend of £212,000, resulting in a minimal variation overall;

(t)  the underspend on disability access is ring-fenced in the reserve;

(u)  there are a number of further drawdowns from the Statutory Schools Reserve (SSR). These reserve commitments were outlined in the 2021/22 Outturn Report from 28 June 2022 Schools Forum meeting, and in Table 6 of this report. The net drawdown total is £284,000;

(v)  the SSR balance as of 1 April 2022 was £14.460m. After in year movements during 2022/23, the balance is £21.745m and the uncommitted balance is £16.449m. The uncommitted element of the SSR is 0.5% of the DSG budget. This was 0.3% at 31 March 2022. There is no statutory requirement for the levels of this reserve, however it needs to align to any risk value to the LA. The LA will undertake a review to assess future risks which will be taken into account for the SSR and will be subject to future reports to the Forum;

During the discussion and in response to questions from the Forum, the following points were raised:

(w)  the underspend in exclusions is mainly due to the excessive exclusion rates of two academies within the LA, and the recovery of the full costs of the pupils excluded. The annual figures for exclusions can be shared with Forum. There is an allocated number of allowable or permitted exclusions for each academy which the LA can fund. If an academy exceeds the number of allocated exclusions, then the LA can claim back those costs. The model for calculating these allocated exclusions will be reviewed; by the LA.

Resolved to:

(1)  note that the 2022/23 financial outturn position of the DSG is an underspend of £7.569m (2% of the overall budget) against a final budget of £324.856m, as detailed in Table 2 of the report;

(2)  note that this underspend has been allocated back to the SSR, resulting in a closing balance of £21.745m for 2022/23, as detailed in Table 7 of the report;

(3)  note that the uncommitted balance on the SSR balance is £16.449m, as detailed in Table 7 of the report.