Agenda item

School Funding 2023/24

Minutes:

4.1      The Head of Education Strategy and Development gave a presentation on School Funding for 2024/25.  The Forum considered the implications of government indicative announcements on school funding for 2024/25, and the proposed funding formula method to use for Gloucestershire’s schools and academies.

 

4.2      The Forum noted that the Schools block (indicative) allocation had increased by 2.8%, the High Needs block allocation had increased by 3.4%, the Central School Services block by 3.9%, and the Early Years block had not yet been updated by the DfE so was currently showing at 0% change, resulting in an overall forecast increase to the Dedicated Schools Grant (DSG) allocation of 2.7%. 

 

4.3      The final DSG position would be presented at the 11th January 2024 Schools Forum meeting after being updated for the final DSG and revised pupil data due to be announced in December 2023.

 

4.4      The Head of Education Strategy and Development presented the changes and clarifications to the National Funding Formula (NFF) for 2024/25.  The Forum noted that:

Ø   The Mainstream Schools Additional Grant had been rolled into the NFF.

Ø   The NFF core factors (such as basic per-pupil funding, and the lump sum that all schools attract) would increase by 2.4%.

Ø   The national formula for split-site funding had been implemented for 2024/25 and would increase funding.

Ø   The funding floor was set at 0.5%.

Ø   The Minimum Per Pupil Level (MPPL) increased to £4,655 for primary and £6,050 for secondary schools.

 

4.5      The Head of Education Strategy and Development explained that the changes to the NFF were broadly comparable to the position at this stage last year, except for deprivation factors which had attracted smaller increases for 2024/25. 

 

4.6      The DfE had announced additional grant funding for schools’ teachers’ pay costs. This totalled £4.6M for the Mainstream Schools Allocation and the Special and Alternative Provision allocation was £0.4M.  The additional funding would be paid as a separate grant in 2023/24 (covering September 2023 to March 2024) and in 2024/25 (covering the whole year) and would be on top of the NFF in both 2023/24 and 2024/25.

 

4.7      He explained that there was still currently no definitive date by when all schools funding would be provided via a direct NFF, however the DfE had previously stated this would be no later than 2027/28.  In Gloucestershire, the NFF was already being mirrored as closely as possible so the local authority and School Forum’s role in the distribution of school funding remained unchanged for 2024/25.

 

4.8      In response to a question, it was explained that the funding floor would only affect schools which had received no increase in funding for 2024/25, after all allocations had been made. It ensured that those schools’ allocations would increase by a minimum percentage every year compared to the baseline.  If the funding floor was set at 0% instead of 0.5%, those schools would receive no increase in funding from the previous year.  Local authorities applied the funding floor through the Minimum Funding Guarantee (MFG); there had been an overall net reduction of 32 schools on the MFG since last year, (32 less in primary and no change in secondary).

 

4.9      The Forum was informed that the Growth Fund needed for 2024/25 was £0.934M.  This was £0.066M less than 2023/24.  The Growth Fund was top-sliced from the Schools block DSG to provide funding for new classes required as a result of a shortage of basic need places and for the start-up costs of new schools. 

 

4.10    The Forum agreed a top-slice of the Schools block for growth of £0.934M for 2024/25.

 

4.11    The Head of Education Strategy and Development explained that current estimates using the 2024/25 NFF rates and the 2023/24 census data forecast approximately £0.687M (0.14%) of the Schools block remaining after funding for growth and delegated budgets at the 100% NFF level.  This was concerning as at the same time last year, despite the larger reserve for growth funding, there was slightly more headroom (£780k).  After updates from the census this dropped to £92k.  Therefore, post October census, there is potential for there to be a shortfall of funding in the Schools block to allocate to budgets at the 100% NFF level.  He pointed out that there are some local authorities that had, for a number of years, been unable to deliver their funding formula in full due to a shortfall in their Schools block funding.

 

4.12    He explained that if there was a shortfall in the Schools block DSG funding needed to allocate budgets at the 100% NFF level, then it was proposed that all funding factor rates including the MFG, would be reduced by the same percentage to balance the funds available.  This would not include the MPPL funding rates as those were fixed by the DfE and not allowed to be reduced.

 

4.13    One member raised a concern that schools which had a high proportion of pupils with additional needs would be more adversely impacted by a reduction in the funding factor rates.  In response, the Finance Manager, Schools Strategy and Capital explained that all funding factor rates would be reduced which included the core basic need factors plus all the additional needs factors.  An alternative approach would be to target just the basic need factors, but this would mean a greater reduction due to it not being spread out across all factors.  Therefore, a reduction in all the funding factor rates had been deemed as the fairest approach should there be a shortfall in Schools block funding.

 

4.14    Having considered the NFF factor rates as outlined in the report, the Forum agreed that the basis on which the formula would be allocated for 2024/25 would be in line with the previous stated intention to match the NFF method as closely as possible and to utilise any surplus remaining in the Schools block to support the 1 in 30 model.  If there was any shortfall in the funding needed that would be covered by reducing all NFF factor rates (except the MPPFL) by the same percentage.

 

4.15    The Forum would make its final recommendations on the funding formula at its meeting on 11th January 2024, ahead of the submission of the final formula to the DfE.

 

4.16    For Early Years, the DSG allocation reflected the 2023/24 funding levels.  The provisional Early Years DSG block funding for 2024/25 would be notified in December 2023 with updates in July 2024 and July 2025.  The Forum noted the adjusted hourly rates agreed by the local Early Years Forum, following the increased funding allocated in the 2023 spring budget.

 

4.17    The Head of Education Strategy and Development explained that the DfE had announced that the free childcare entitlement offer for working parents would be expanded as follows:

Ø    15 hours free entitlement for all 2 years of working parents from April          2024.

Ø    15 hours free entitlement for all over 9-month-olds of working parents         from September 2024.

Ø    In April 2025 this would be raised to 30 hours for those above 9 months.

 

4.18    The DfE had recently consulted on the formula for the expanded offer and the illustrative rates for 2024/25 were based on a new offer and included IDACI data to indicate deprivation. The illustrative rates that the local authority would receive were £7.50 per hour for 2-years-olds and £10.18 for under 2-year-olds.  This was concerning at it represented a reduction in funding for 2-year-olds compared to the current 2023/24 level.  The local authority was awaiting the final details of funding to support planning and implementation. 

 

4.19    Forum members representing Early Years spoke of the challenges around planning for the implementation of the expansion of the childcare entitlement offer, without there being clear details on the funding rates, and the indication that this would need to be implemented at pace.  The Early Years sector anticipated there would be around a 2000 place shortfall for 2-year-olds, not including the additional places needed for over 9-month-olds.  There were also concerns that the workforce recruitment and retention crisis already impacting the sector would be further exacerbated by this expansion.

 

4.20    In response to a question, the Head of Education Strategy and Development reported that whilst information on the Early Years funding rates was awaited, the local authority was undertaking modelling work on a range of different variations in funding rates, in preparation for when the final details were announced, so that implementation could commence immediately. 

 

4.21    The Head of Education Strategy and Development explained that the indicative DSG amounts, were broadly in line with the indicative budget allocations at this stage last year, expect the indicative figures for the High Needs block for 2024/25 showed an increase of £3.169M (3.4%). This was lower than the previous 4 years, which had all seen final increases of over £6M. 

 

4.22    He reported that in the last two years there had been adjustments following increases to education spending announced through the Autumn statement, which had been delivered through additional grants.  However, at this stage it was unclear whether there would be any increases to education spending announced through the Autumn statement.

 

4.23    The Head of Education Strategy and Development presented a draft consultation paper regarding de-delegated budgets for 2024/25.  The local authority was seeking views from the system on three areas: de-delegation for local authority maintained schools; notional SEND funding; and targeted support funding for SEND.  The local authority planned to consult with maintained schools during October 2023, before making recommendations to the November Schools Forum meeting.  He encouraged Forum members to also provide feedback on the consultation paper via email.

 

4.24    He explained that all of the de-delegated per-pupil rates had not increased since 2013/14 and no changes to the rates were being proposed for 2024/25.

 

4.25    Sarah Murphy, Trade Union representative, explained that the de-delegated amount for union facilities (at £3.05 per pupil) paid for the release time salaries of three elected county union representatives.  Therefore, allowing teaching unions to provide Gloucestershire primary schools access to effective statutory and collective consultation, bargaining and individual representation from trained and accredited local teaching union officials.  Consequently, school leaders and managers also had access to a valuable resource in the resolution of workplace issues and disputes. This allowed local authority maintained schools to meet all statutory and procedural entitlements to union representation.  She drew members’ attention to the Local Authority Teaching Union Facilities 2023 report at Annex A, which detailed the breakdown of the type of casework undertaken over the period August 2022 - September 2023.  She commented that she hoped the de-delegation of union facilities for primary schools would continue to be supported and agreed for 2024/25.

 

4.26    It was reported that de-delegation for in-year pupil increases (at £6.32 per pupil) supported maintained primary schools with significant pupil increases above a threshold in their number on roll between October census dates.  For some primary schools in the county this represented a significant amount of funding support.  It was predominantly small primary schools that were eligible for this funding due to their specific funding pressures.  Views were being sought on whether this was the right formula as well as whether the de-delegation was appropriate, given that all schools were supporting those schools that were materially affected by an increase in pupil numbers. 

 

4.27    The Head of Education Strategy and Development explained that since 2016/17 de-delegation to support statutory local authority services for all local authority maintained primary and secondary schools had been in place at £5.00 per pupil.   The consultation was proposing a transition of this funding to support the delivery of statutory school improvement services.   Since 2013/14 the maintained primary schools had de-delegated £9.27 to support targeted intervention school improvement services.  This additional funding provided by all primary schools ensured that funding was not a limiting factor for schools ‘at risk’, which could often be the case.

 

4.28    He reported that the loss of the School Improvement, Monitoring and Brokerage Grant had created significant financial pressure on school improvement services, which had been mitigated in the short-term.  The transition of the funding would stabilise the existing model of support and would allow the continuation of a blended model of funding – de-delegation and traded service offer.  The local authority was seeking schools’ views on the sustainability of the blended approach and the autonomy and variation of support that it enabled.

 

4.29    In response to questions from members it was explained that under this proposal the local authority would be able to continue to provide the same level of statutory school improvement services to maintained primary schools.  Moving forward, consideration would need to be given to how to address the issue of there being an increasing distance between the local authority and some maintained schools.  In addition, the long-term policy direction set out by the Government and DfE was a move towards full academisation, consequently over time local authority school improvement services would need to adapt to meet the needs of a changing system.  The key challenge was how to sustain and manage quality provision during that process. 

 

4.30    In response to a request from a member, it was agreed that the consultation paper would be adjusted to include more detail on the statutory LA services.

ACTION: Head of Education Strategy and Development.

 

4.31    The Head of Education Strategy and Development reported that the local SEND funding formula had remained stable for a number of years, with no significant change since the notional budget was included in the national funding formula.  The local authority was seeking schools’ views on the appropriateness of the current levels of notional SEND funding and whether it was necessary to make any changes to the formula.  He emphasised that the formula factors and the way it was allocated would not increase nor decrease school funding in way.  He explained that the local allocation equated to 8.3% of 2023/24 Schools block funding compared to 10.8% national median.  He reported that the DfE intended to move to a national formula as part of their drive towards a direct NFF; however, it was unlikely that a national formula would be in place for at least 3 years.

 

4.32    One member questioned why there was consultation around the notional SEND funding formula, when any changes would not affect the funding levels being received by schools. In response, the Head of Education Strategy and Development clarified that it was important to ensure that the formula resulted in children with additional needs receiving the right amount of support, and that the funding was ring-faced within budgets in order to achieve this.  He emphasised to members that Gloucestershire was one of the lowest funded authorities in terms of High Needs block funding.  The local authority aimed to make the most efficient use of the funding available.  Any changes to the local SEND formula were about fine tuning it in order to provide the best support and outcomes for children with high needs.

 

4.33    In response to a request from a member, it was agreed that the consultation document would be updated to make it clear that any changes to the notional SEND funding formula and the way it was allocated, would not increase nor decrease school funding in any way.

ACTION: Head of Education Strategy and Development.

 

4.34    The Head of Education Strategy and Development explained that in recognition that the NFF was not working in the way it was intended, the local authority had developed its own targeted support model (1 in 30 model) to support schools with a disproportionately high number of children with additional needs.  He pointed out that the f40 Group was lobbying the Government to make changes to the NFF, so that all the deprivation and additional needs factors that were in the current NFF were allocated before the minimum per pupil funding level, to ensure that funding was properly responding to the needs of the school’s cohort. 

 

4.35    The Head of Education Strategy and Development reported that the targeted support model had started at 1 in 75 and had reduced to 1 in 30, purely due to the associated costs.  In 2023/24 it was expected that the model would cost around £3.2M, but if it was still operating at 1 in 40, the forecast cost would be closer to £5.5M. 

 

4.36    He reported that the School’s Forum working group had recommended a move towards a model that was driven by the school cohort rather than EHCP numbers and was allocated to specifically enhance the provision for children and young people with additional needs.  In terms of identifying the schools that could receive additional funding, the local authority was keen to move away from the EHCP as a primary mechanism.  A clear starting point was the proxy factors for additional needs that existed in the NFF.  Other factors that could be considered alongside these were the SEN numbers within the school; so, both SEN support and EHCP numbers.  The local authority was seeking schools’ views on whether there were other factors that should be considered.  He explained that funding would be allocated as an enhancement to the school’s notional SEND funding. The school would be expected to report on how notional SEN funding was being used and how the targeted funding would be used to enhance provision in the school.  He emphasised that this mechanism for supporting SEND mainstream inclusion was important not only to provide the additional funding needed for schools but for overall High Needs funding stability.

 

4.37    One member questioned whether there would be any protection in place if schools were to lose funding following changes to the model, particularly given that one secondary school was in receipt of £186k.  In response, the Head of Education Strategy and Development explained that this would be a local authority decision.  Ultimately, it was crucial that the local authority was able to identify the schools that needed the additional funding.  He stressed that the 1 in 30 model was no longer sustainable.  At no point had the funding going into model decreased; the cost of providing the model had risen due to the significant increase in the number of EHCPs in the system.  The aim now was to develop a new straight forward process that provided sustainable support for the school. 

 

4.38    One member commented that inclusive schools had been adversely affected by the funding changes that had taken place over the past several years.  Under the current funding formula schools that were non-inclusive were more financially stable than inclusive schools.   He acknowledged the importance of mainstream SEND inclusion; however, he stressed that the current position was that schools were not receiving sufficient funding to support this effectively including being able to provide all of the support stipulated in EHCPs.  A lack of funding was preventing some schools from being able to be inclusive due to the significant impact on budgets.  He suggested that any changes to the targeted support model would need to happen as quickly as possible.

 

4.39    One member emphasised that it was critical that schools received sufficient funding in order to be able to employ staff to support children with additional needs.  A lack of funding was a significant issue for schools that had a disproportionately high number of children with additional needs.  It had a profound impact not only on the children with additional needs but on all children and staff within the school. 

 

4.40    Members commented that in order to address this, there needed to be a way to ensure that all schools were inclusive, so that the number of children with EHCPs was distributed more evenly across all schools in the local community, instead of just a few schools being perceived to be inclusive and able to offer the right support.   It was suggested that robust conversations were needed with headteachers.

 

4.41    The Head of Education Strategy and Development acknowledged that it was not just about funding and that there was a need for wider conversations with schools around inclusivity, which he indicated were taking place.  He pointed out, however, that as part of the EHCP process, parents/carers were able to make a preference regarding which mainstream school they felt would best meet the needs of their child.  He commented that whilst changes needed to take place locally, there was also a need for national policy reform.  He anticipated that this would be developed through the DfE’s SEND and Alternative Provision change programme; the local authority had signed up to be part of the pilot project within this programme.

 

4.42    In response to a question, the Head of Education Strategy and Development explained that there was recognition that all schools would need to be signed-up to the inclusion baseline being developed which would set out the expected minimum standards for schools.  He added that an ECHP should be clear on whether the provision of education should be in a special school or within the mainstream.  He acknowledged that due to sufficiency challenges within the county, there were a number of children within mainstream schools who were currently waiting for a special school place to become available.  The local authority was developing a range of new specialist provision in order to meet the rising level of needs in the county.

 

4.43    The Head of Education Strategy and Development reported that the plan was for the Forum’s Working Group to meet to consider the feedback received as part of the consultation process, and for recommendations on the way forward to go to the 11th January 2024 Forum meeting for consideration.

Supporting documents: