Agenda item

Joint report of the Corporate Director for People and the Director of Education Services

Nick Lee, Director of Education Services, introduced the report which proposes to transfer Dedicated Schools Grant (DSG) funding from the High Needs Block to the Central Schools Service Block and the distribution of additional funding to primary and secondary schools through the local funding formula in 2024/25. This decision will be regarding the passporting of ring-fenced grant funding, so subject to Department for Education grant conditions which must be considered as part of the internal council process relating to the S114 notice.

Julia Holmes, Senior Commercial Business Partner (Childrens and Education) and Collins Elechi, Senior Commercial Business Partner (Finance), delivered the report which outlined the following information:

(a)  for the financial year 2024/25, the Local Authority (LA) proposes to continue to move away from the standard budget setting approach of balancing block budgets to the DSG income received for each specific block as it did in the financial year 2023/24;

(b)  at the December 2022 Schools Forum meeting, permission was granted to transfer from the High Needs Block (HNB) £0.458m to the Central Schools Services Block (CSSB) and up to £2m to the School Block (SB). This year, permission is being sought to transfer HNB funding of £0.508m to the CSSB to allow for the additional cost of the Education Welfare Team which was approved by Schools Forum last year. This is an allowable cost under the DSG;

(c)  permission is also being sought for the distribution of additional funding to primary and secondary above the schools’ national funding formula for 2024/25; 

(d)  in the financial year 2023/24, primary and secondary schools were given an additional £85 per pupil through the basic entitlement factor. To enable the additional funding to be passed onto all schools including maintained schools and academies on the Minimum Funding Guarantee (MFG), permission was granted to the Secretary of State to make a one-off technical adjustment to ensure that schools on the MFG would receive the additional £85 per pupil;

(e)  the LA is concerned that some schools may not be able to set a balanced budget in 2024/25 due to cost pressures. Since the Schools Forum meeting on 10 October 2023, the LA has been looking into options to pass on additional funding to maintained schools and academies. The ESFA have been contacted to see what options are available. The only other option available is to leave in the additional funding that was given last year in the 2023/24 baseline funding. This proposal has been modelled and this would generate additional funding of £1.988m for mainstream maintained schools and academies in the FY 2024/25. 90 of the 94 schools would get the additional funding. The remaining four schools attract additional funding next year through a one of these factors: split site factor, exceptional premises factor (Building Schools for the Future) or the Private Finance Initiative funding factor; 

(f)  the level of additional funding per school is calculated on the make-up of pupils and factors they attract. On average, primary schools will receive £18,500 per school and secondary schools will receive £30,000 per school. The October 2022 School Census data has been used in the calculations. Once the October 2023 census data will be received, the figures will be revised and will be checked to see if the additional funding is still affordable;

(g)  it is forecast that there should be sufficient funding in the Schools Block to provide the additional funding. If once the December 2023 funding settlement has been received and there is not sufficient funding within the Schools Block to fund this proposal the Local Authority propose to draw down up to £1.493m funding from the Statutory School Reserve (DSG Reserve). The £1.493m was included in the 2022/23 Dedicated Schools Grant - Outturn report on 27 June 2023. This funding is made up of pupil growth funding that could not be allocated through the national funding formula and was allocated to the pupil growth contingency fund and actual underspends on the pupil growth contingency fund between the financial years 2020/21 to 2022/23. Permission is being sought from Schools Forum to use the £1.493m within the reserve in the event of a shortfall in the additional funding to primary and secondary schools; 

(h)  the consultation with Schools Forum and all schools has begun for two weeks until 19 December. All headteachers were sent the consultation this morning and information about it is included in the weekly Council email to all schools;

(i)  there has been a year-on-year increase in high needs funding from £33.7m to £61m between 2019 to 2025. The block transfer from the HNB to the CSSB would be to support the Education Welfare Team. In December 2022, Schools Forum granted a transfer of £0.458m from the HNB to the CSSB. Due to the national increase in local government pay scales by £1,925 in 2022/23 and in 2023/24 and the introduction of the LA’s new pay scale in 2023/24, the amount of the block transfer requested has increased to £0.508m for 2024/25;

(j)  as the 2023/24 high needs budget is not fully allocated and has an anticipated £3m under-spent, coupled with the £2.835m additional funding for 2024/25, there will be £5.8m in high needs funding to prioritise for high needs developments and national pressures;

(k)  in September, the Executive Board approved a range of specialist provision under the SEN Sufficiency project, and these developments which are in early design stage include:

·  expansion of Rosehill Special school - 80 places;

·  enhanced resource provision at Fernwood Secondary School –

20 places;

·  enhanced resource provision at Nottingham Girl’s Academy –

8/10 places;

·  enhanced resource provision at Gladehill School – 8 places;

·  enhanced resource provision at Milford Academy – 8 places;

(l)  it is expected the financial impact for these projects will start in 2025/26, with a potential £2.883m in the first year and £4.841m and £5.600m in 2026/27 and 2027/28 when the full capacity has been utilised;

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

(m)concerns about moving funds from the HNB to CSSB are recognised, however, this investment in the Education Welfare Team will assist with early intervention for pupils with SEN and reduce higher impact costs further along the process of providing support to those pupils;

(n)  there is a huge national demand for funding to help schools support pupils with SEN. The LA is doing well to deliver a SEN provision within the constraints of a national funding model set nationally;

(o)  there will not be any announcements in high needs capital investment until February 2024, at which point the plans for Phase 2 of the Inclusion Strategy.

Resolved to:

(1)  agree to the proposal to leave in the additional funding given to mainstream primary and secondary schools in 2023/24 in the 2023/24 Minimum Funding Guarantee unit values in the 2024/25 local funding formula.

(2)  approve the allocation of up to £1.493m ring-fenced within the Statutory School Reserve for pupil growth to fund the proposal to give mainstream maintained schools and academies additional funding in 2024/25 if there is insufficient funding within the Schools Block once the DSG settlement is received in December 2023;

(3)  agree to a block transfer for 2024/25 from the High Needs Block to the Central Schools Services Block of £0.508m.