Appendix 1 CONSULTATION ON THE PROPOSED CHANGES TO BMBC S FORMULA FUNDING FOR SCHOOLS 2016/17

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1 Appendix 1 CONSULTATION ON THE PROPOSED CHANGES TO BMBC S FORMULA FUNDING FOR SCHOOLS 2016/17 1

2 1. Introduction This consultation document summarises the issues and proposed changes to the Schools Funding Formula for 2016/17, which we seek views on. Consultation questions are set out within the Consultation Response Form (appendix c) We welcome general comments as well as specific responses to each question. This consultation period closes at 12 noon on Monday 21 st September 2015, you can respond to this consultation by completing the Consultation Response Form and returning to: Should you wish to discuss the consultation specifically please contact: Joshua Amahwe Catherine Pantry Strategic Finance Manager Assistant Strategic Finance Manager Financial Services Financial Services (5630) (3224) 2

3 2. Background In conjunction with the Schools Forum the Local Authority proposes and decides on the local Schools Block Funding Formula following consultation with all state-funded mainstream provision schools including academies within the borough. The current Schools Block Funding Formula was implemented in April 2013 following consultation with schools. It is compliant with DfE regulations for a simplified funding formula in readiness to support the transition to the introduction of a National Funding Formula sometime in the future. The current Government remains committed to introducing a National Funding Formula; however this will likely be on a phased basis and is not anticipated for 2016/17. The Authority is therefore minded to not introduce any major changes to the local formula for 2016/17 in order to maintain stability of funding to schools. However when comparing Barnsley to national benchmarking data released by the DfE for 2015/16 there continues to be some disparity s to the national average. The Authority and the Formula Funding Group therefore propose some changes to pupil led factors within the local formula for 2016/17 to bring Barnsley more in line with the national average. Consideration has been given to ensuring that the funding formula still adheres to any statutory requirements. The following statutory requirements will still hold: AWPU must remain no less than 2,000 for primary and 3,000 for secondary schools; Pupil led funding must be no less than 80% of the overall funding within the formula - Barnsley currently allocates 85.5%; The Minimum Funding Guarantee (MFG) of (-)1.5% will remain in place for 2016/17 to protect all schools against significant funding losses. This means no school will receive a loss in funding on a per pupil basis greater than 1.5% compared to the previous year. Ensuring that there is sufficient resources within the delegated funding (i.e. the notional SEN budget) to meet the 6,000 per high need pupil requirement. 3. Existing funding formula and identified areas for review The table below shows the factors allowed by the DfE and how these were applied locally in Barnsley for 2015/16. Table 1 Current Formula: Type of Factor Factor Use of factor locally Total Funding allocated % of funds allocated Pupil led Basic Entitlement (AWPU) Mandatory 91,536, % Pupil led Deprivation Mandatory 13,101, % Pupil led Looked After Children (LAC) Optional not used 0 0% Pupil led English as an Additional Optional not used 0 0% Language (EAL) Pupil led Mobility Optional not eligible 0 0% 3

4 Pupil led Prior Attainment Optional 7,967, % Other Lump Sum Optional 8,700, % Other Sparsity Optional not eligible 0 0% Other London Fringe Optional not eligible 0 0% Other Split Sites Optional not used 0 0% Other Rates Fixed 3,613, % Other PFI Funding Fixed 6,790, % Other Post 16 Commitment Optional not used 0 0% Total 131,709, % Question 1 General Principles: Basic Entitlement (Age weighted pupil unit) This is a mandatory factor which all authorities had to use in their 2015/16 formula although authorities were permitted to choose different age-weighted pupil unit (AWPU) rates for primary, key stage 3 and key stage 4 pupils. These amounts had to be a minimum of 2,000 for primary and 3,000 for key stages 3 and 4. Barnsley s AWPU rate is above the minimum requirement for all three sectors but is below the majority range for secondary compared to other authorities as shown in the table below. Overall nationally the proportion of formula funding that LAs are allocating through the AWPU factor ranges from 61% to 88% (the national average is 76%), with half of all LA s allocating between 75% and 80%. Barnsley currently allocates 70% of its formula funding (prior to Minimum Funding Guarantee (MFG, capping and scaling) through the basic entitlement factor. This is below the national average of 76%, but an improvement from 2014/15 (67%). It should be noted that the decision was made by the FFRG / Schools Forum to increase AWPU funding levels by reducing funding allocated through prior attainment within the 2015/16 formula. To bring Barnsley s AWPU more in line with the national average whilst still maintaining the minimum 80% being allocated to pupil led factors, there is a requirement to adjust other pupil led factors to accommodate the increase in basic entitlement. The only other pupil led factors used within Barnsley s funding formula are Deprivation and Prior Attainment. On comparison to the national benchmark there is scope to reduce these factors whilst still maintaining a funding allocation within the majority range. Deprivation: This is another mandatory factor which every authority had to use in the 2015/16 formula; the Government is very keen that all local authorities continue to provide additional funding to schools with deprived pupils. Local authorities in conjunction with their Schools Forums are expected to continue to determine locally, an appropriate proportion or quantum of their Schools Block funding to allocate through this factor. There is considerable variation in the proportion of schools formula funding which LAs are allocating to schools through the deprivation factor, ranging from 1% to 21%. Barnsley allocated 4

5 9.95% of its funding through this factor in 2015/16. Whilst the proportion of funding Barnsley allocated is within the median of the range across all authorities, it is below the majority range in terms of deprivation funding per FSM pupil units, this is further indication that deprivation funding in Barnsley is comparatively lower than other authorities. There is scope to realign some of the funding allocated to deprivation into basic entitlement and still maintain an appropriate level against the national benchmark. Proposal or option to reduce the proportion of funding allocated through the deprivation factor should be considered in the context of the considerable resources currently allocated to schools through pupil premium grant funding. The borough currently receives around 11M (including academies) in funding through the pupil premium grant. This funding is heavily skewed towards schools in deprived areas of the borough and with high numbers of free school meals eligible pupils. Whilst the importance of improving the outcomes of pupils from low income families cannot be understated, there is the need to ensure a degree of fairness within the funding framework. It is fair that schools with low numbers of FSM pupils still continue to get an appropriate level of funding through the AWPU and other factors to ensure that they can continue to deliver an appropriate level of education provision to their pupils. Prior Attainment: Although this is an optional factor, the majority of authorities chose to use it with only 4 authorities not using it at all for either primary or secondary in 2015/16. For primary pupils, the indicator is assessed under the new Early Years Foundation Stage Profile (EYFSS) as not achieving a good level of development. For secondary schools a single indicator was applied to pupils who didn t achieve Level 4 at KS2 for English or Math s. Analysis of the DfE data showed that there is considerable variation in the per pupil amount selected by LA s within their funding models. Analysis of the DfE data showed that 68% of local authorities are allocating between 2% and 6% of their formula funding through this factor. For 2015/16 Barnsley allocated 6.05% of funding through this indicator, which is at the top end of the range for the majority of authorities. The funding proportion through this factor was significantly reduced in 2015/16 compared to 2014/15 (9.6%). There is scope for further reduction, whilst still maintaining an allocation within the benchmark national average and ensuring notional SEN funding remains at a sufficient level to meet the 6,000 per high need pupil requirement. 4. Proposed formula change options A number of options have been proposed for which views are being sought. These in the main comprised increasing the AWPU levels for both primary and secondary schools (different varying %) and mitigating this by a downward reduction in the proportion of funding allocated through the deprivation and prior attainment factors. A summary of each option can be found in appendix a. 5

6 Under each option the overall funding envelope through the model remains the same i.e. selffinancing, with the MFG ensuring protection for schools from significant funding reductions (not greater than 1.5% on a per pupil basis). The exemplification of each option, on a school by school basis is detailed in the attached appendix b The baseline data / budget used for comparison a purpose is the 2015/16 delegated budgets issued to schools (which is based on October 2014 census data). The description of each option is as follows: Question 2 Balance between AWPU, Deprivation and Prior Attainment Option 1: Increase AWPU rates for primary and secondary schools by 8% (i.e. 3,030 for Primary, 3,666 KS3 and 4,242 KS4) and reduce the funding allocated to Deprivation to 5.64% (from 9.9%) and Prior Attainment to 4.8% (from 6%). All other factors would remain the same. The impact on schools in Barnsley under this option can be summarised as follows: No. of schools adversely affected - 36 No. of schools with funding gains - 35 No. of schools with no impact - 16 Largest funding reduction ,318 Largest funding gain ,674 Under this option the Primary : Secondary ratio increases in line with the national target to 1 : 1:27. Option 2: Increase AWPU rates for primary and secondary schools by 10% (i.e. 3,086 for Primary, 3,734 KS3 and 4,320 KS4) and reduce funding allocated to Deprivation to 5.05% (from 9.9%) and Prior Attainment to 4% (from 6%). All other factors would remain the same. The impact on schools in Barnsley under this option can be summarised as follows: No. of schools adversely affected - 36 No. of schools with funding gains - 35 No. of schools with no impact - 16 Largest funding reduction ,913 Largest funding gain ,262 Under this option the Primary : Secondary ratio increases in line with the national target to 1 : 1:27. Option 3: Increase AWPU rates for primary and secondary schools by 7% (i.e. 3,002 for Primary, 3,632 KS3 and 4,202 KS4) and reduce funding allocated to Deprivation to 7% (from 9.9%) and Prior Attainment to 4.1% (from 6%). All other factors would remain the same. 6

7 The impact on schools in Barnsley under this option can be summarised as follows: No. of schools adversely affected -34 No. of schools with funding gains - 37 No. of schools with no impact - 16 Largest funding reduction ,296 Largest funding gain ,424 Under this option the Primary : Secondary ratio increases closer to the national target to 1 : 1:26. Question 3 Introduction of English as an Additional Language (EAL) Option 4a: In addition to the proposed changes outlined within options 1 to 3 it is also proposed that Barnsley introduce the use of EAL which has never been used before due to low numbers of EAL pupils in Barnsley. Although this is an optional factor, the majority of authorities (132 in total) chose to use it within their funding formula. Over recent years the number of ethnic minorities residing in Barnsley has increased - there were approximately 2% of pupils being eligible to attract EAL funding within the 2015/16 formula and it is anticipated this number will continue to grow. It is therefore proposed funding of 0.2% be allocated to this factor for 2016/17 the national benchmark being approximately 0.8%. Most authorities using this indicator allocate between 250-1,000 per Primary pupil and 75-4,500 for per Secondary pupil. To accommodate the introduction of this factor it is proposed a further reduction is made to the deprivation factor (of 0.20%). Under this option the Primary : Secondary ratio would at 1 : 1:25. Looking at this factor in isolation not taking into account any of the options above, should this factor have been applied during 2015/16 The impact on schools in Barnsley under this option can be summarised as follows: No. of schools adversely affected -34 No. of schools with funding gains - 34 No. of schools with no impact - 19 Largest funding reduction ,907 Largest funding gain ,279 Option 4b: This option is based on the changes outlined within option 3 and the introduction of EAL. This would result in AWPU factors being increased to by 7% compared to 2015/16 unit rates, to 3,002 for Primaries, 3,632 KS3 and 4,202 KS4. All other factors would remain the same. The impact on schools in Barnsley under this option can be summarised as follows: 7

8 No. of schools adversely affected -33 No. of schools with funding gains - 38 No. of schools with no impact - 16 Largest funding reduction ,557 Largest funding gain ,007 Under this option the Primary : Secondary ratio increases closer to the national target to 1 : 1:26. Question 4 Other Factors Growth Fund: An amount is retained centrally to support growing class sizes across the borough. The amount allocated through Barnsley s formula in 2015/16 was 200k, the amount other Authorities allocate ranges from 50k to 6m. Due to the increasing pressures on primary class sizes forecast over the next few years it is proposed that schools agree to increase the Growth Fund from 200k to 300k. To fund the increase an additional 100k would be required to be top sliced from delegated funding reducing the amount available directly to schools. The impact would be minimal, resulting in a reduction of approximately 3 per pupil. 5. Action Required by Schools Schools are asked to consider this consultation document and respond to each of the questions outlined within the Consultation Response Form. Responses received will be considered with a view to informing the modelling process for 2016/17. Analysis of responses will be completed and presented to the Formula Funding Review Group in September with a recommendation for approval of the preferred option to the Schools Forum in October. 6. Information to support the financial modelling shown in Appendix B Appendix B details the projected financial impact for each school of the proposals outlined within this document: The allocation of additional funding into AWPU (basic entitlement) The reduction to other pupil led factors Deprivation and Prior Attainment The introduction of English as an Additional Language (EAL) There are no changes to any of the other factors used within Barnsley funding formula, however the proposal to increase the Growth Fund by reducing delegated funding should be noted and considered as part of the consultation. 8

9 Total funding allocated through the funding formula in 2015/16 was 130.7m, this has been used throughout each of the options for modelling purposes. This funding relates to the Schools Block only and excludes any funding received through Early Years, High Needs, Sixth Form or Pupil Premium. All data used to calculate the model options is based on data taken from the 2015/16 approved funding formula. This ensures a like for like comparison with the 2015/16 budget. The actual Schools Block funding for 2016/17 will be based on pupil numbers as at October 2015 census. The columns shown in Appendix B are as follows: Col (a) Col (b) Col (c) Col (d) Col (e) Col (f) Col (g) - School DfE Number - School name - School type (Primary, Secondary) - Number of Pupils (based on Oct 2014 census) - The 2015/16 Schools Block delegated budget post de-delegation after the application of minimum funding guarantee (MFG). For maintained schools this should agree the your Schools Block Funding budget. Academies should note that all figures included in the appendix are based on financial year April to March, as this is how the local authority submit budgets for academies to the Education Funding Agency (EFA). The EFA then converts these to an academic year (September to August). - Equates to average funding per pupil taking into account all factors used within the formula. Note this is not the AWPU unit. - The proposed Schools Block delegated budget post de-delegation after the application of minimum funding guarantee (MFG) under Option 1. Col (h) - The average funding per pupil based on Option 1. Col (i) Col (j) Col (k) - The impact to each school when comparing the proposed changes outlined within Option 1 to the 2015/16 actual Schools Block funding Col (e). - The impact to the average funding per pupil when comparing the proposed changes outlined within Option 1 to the 2015/16 actual Schools Block funding average funding per pupil Col (f). - The proposed Schools Block delegated budget post de-delegation after the application of minimum funding guarantee (MFG) under Option 2. Col (l) - The average funding per pupil based on Option 2. Col (m) - The impact to each school when comparing the proposed changes outlined within Option 2 to the 2015/16 actual Schools Block funding Col (e). 9

10 Col (n) - The impact to the average funding per pupil when comparing the proposed changes outlined within Option 2 to the 2015/16 actual Schools Block funding average funding per pupil Col (f). Col (o) - The proposed Schools Block delegated budget post de-delegation after the application of minimum funding guarantee (MFG) under Option 3. Col (p) - The average funding per pupil based on Option 3. Col (q) - The impact to each school when comparing the proposed changes outlined within Option 3 to the 2015/16 actual Schools Block funding Col (e). Col (r) - The impact to the average funding per pupil when comparing the proposed changes outlined within Option 3 to the 2015/16 actual Schools Block funding average funding per pupil Col (f). Col (s) - The proposed Schools Block delegated budget post de-delegation after the application of minimum funding guarantee (MFG) under Option 4a. Col (t) - The average funding per pupil based on Option 4a. Col (u) - The impact to each school when comparing the proposed changes outlined within Option 4a to the 2015/16 actual Schools Block funding Col (e). Col (v) - The impact to the average funding per pupil when comparing the proposed changes outlined within Option 4a to the 2015/16 actual Schools Block funding average funding per pupil Col (f). Col (w) - The proposed Schools Block delegated budget post de-delegation after the application of minimum funding guarantee (MFG) under Option 4b. Col (x) - The average funding per pupil based on Option 4b. Col (y) - The impact to each school when comparing the proposed changes outlined within Option 4b to the 2015/16 actual Schools Block funding Col (e). Col (z) - The impact to the average funding per pupil when comparing the proposed changes outlined within Option 4b to the 2015/16 actual Schools Block funding average funding per pupil Col (f). It should be noted that the figures presented within each of the options will not equate to the final Schools Block funding allocation for 2016/17 as this will be dependent upon: Amendments to the proposals following the consultation process Decision taken by the Schools Forum Amendments to the DSG allocation as advised by the DfE 10

11 Pupil numbers and data for the 2016/17 formula will be based on October 2015 census data Transfers between the Schools Block, Early Years and High Needs as approved by the Schools Forum De-delegation for central services for maintained schools only. The figures included within Appendix B will not equate to the schools entire budget for 2016/17. Schools may also receive funding from the following sources that are excluded from this consultation: Early Years funding for primary schools with nursery classes High Needs top up funding above the 6,000 included within the Schools Block funding for additional educational support. Post 16 funding for schools with sixth forms Pupil Premium funding and any other specific grants such as sports grant and universal infant free school meals. 11

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