School Funding Reform Changes 2014/15

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1 Authr: Wards Affected: Lcality Affected: Parishes Affected: Settings Affected: Head f Finance (Educatin and Innvatin) All All All As the Dedicated Schls Grant is ring-fenced funding prvided by the Department fr Educatin t meet the educatinal needs f early years, schl age and all 0 t 25 year ld high needs pupils any decisins n hw the grant is utilised indirectly affects all settings. This reprt specifically affects the mainstream funding f 5 t 16 (schl age) pupils and t a lesser extent age 5 t 16 high need pupils in Special Schls and Special Resurce Prvisin. 1. Purpse and Reasns 1.1 The purpse f this reprt is primarily t advise Schls Frum Members n what schl funding refrm changes affecting mainstream settings are required fr 2014/15 arising frm the Department fr Educatin (DfE) 4 th June 2013 annuncement. Further wrk is required t fully understand the psitin fr high needs settings as, althugh the general principles appear t remain unchanged, next year s funding levels have nt been quantified and there are sme detailed changes t implement. Further guidance is due t be released by the DfE n this matter. 1.2 This reprt sets ut the areas f funding which the LA is already cmmitted t reviewing and als thse areas which we are required by DfE t review fr 2014/15. Sme changes must be implemented whilst thers are ptinal and prpsed cnsultatin plans cvering mainstream and pre 16 high need settings are included in this reprt. A key requirement f the refrm changes is that all settings must be cnsulted regarding changes that affect them. The LA cannt therefre limit its cnsultatin t the Schls Frum but will cntinue t reprt the utcmes f cnsultatin events t the Frum and seek the views f Frum Members as has been SBC practise in recent years. 1.3 The reprt als seeks Schls Frum supprt t seek Minimum Funding Guarantee (MFG) exemptins fr sme specific areas f funding when setting 2014/15 budgets. 2. Recmmendatins 2.1 Under the Swindn Brugh Cuncil (SBC) scheme f delegatin decisins relating t the lcal schl funding frmula are made by the Directr f Children Services subject t cnsultatin with the Schls Frum. As in previus years

2 the LA intends t seek Schls Frum supprt fr all such decisins and the Frum is recmmended t: 3. Detail Agree t the establishment f a receptin uplift factr t be used when calculating 2014/15 schl funding allcatins Cmment n and supprt the LA s aim f implementing a mre universal banding/funding scheme fr all specialist pre 16 settings and t review the cnsultatin plan at Appendix 3. Nte that: - whilst 2014/15 DSG funding rates have been cnfirmed fr early years and mainstream schls the value f the high needs blck and therefre the verall DSG settlement cannt be quantified at this stage fr mdelling purpses the LA will initially assume existing mainstream funding values will cntinue in 2014/15 With due cnsideratin as t whether stability in schl funding may be mre imprtant than imprved fairness, prvide initial views n: - The establishment f a sparsity factr Changes t the secndary lump sum factr Intrducing a new Lked After Children factr Nt intrducing an ptinal split site factr Changes t the secndary lw prir attainment factr Nt intrducing an ptinal pupil mbility factr Nt intrducing a temprary falling rlls factr Nt amending English as an Additinal Language (EAL), Deprivatin, NNDR and PFI Affrdability Gap Funding Intrducing an exceptinal premises factr The prpsed mainstream cnsultatin prgramme Agree that the fllwing items shuld, subject t Educatin Funding Agency (EFA) apprval, be exempt frm the MFG calculatins in 2014/15:- The ne ff bst t primary BPPE funding The reductin in Behaviural and Emtinal Supprt Difficulties (BESD) premium funding 3.1 At the 5 th March 2013 Schls Frum all final decisins were made relating t the use f Swindn s 2013/14 DSG allcatin including hw delegated funds wuld be distributed acrss Swindn Schls, Cnverter Academies and Early Years Prviders. This reflected a number f changes which were required t meet the

3 initial first step requirements f the DfE s schl funding refrm prgramme. Althugh these changes were cnfirmed by the EFA as being in cmpliance with the new schl finance regulatins the LA was cmmitted t reviewing sme areas f funding in 2014/15 and an update n these areas is included belw. Schls Frum is als asked t supprt the LA s request fr sme specific elements f 2013/14 t be exempt frm the 2014/15 MFG prtectin calculatins t avid funding being permanently lcked in t schl allcatins. 3.2 On 4 th June 2013 DfE annunced the results f their 14 th February 2013 cnsultatin tgether with an indicatin f 2014/15 DSG levels and detailed peratinal guidance fr LAs n the areas that must and/r culd be reviewed in determining 2014/15 lcal frmula allcatins. N changes are required fr early years as the single funding frmula fr all prviders remains applicable. Similarly n significant changes appear t be required fr pre-16 high needs funding as the basic place plus funding mdel will cntinue althugh the LA is cmmitted t imprving tp up values. The psitin regarding pst-16 high needs funding was als nt clarified in the 4 th June 2013 annuncement and remains very unclear as reprted elsewhere n tday s agenda. 3.3 This latest annuncement stated that the changes implemented in 2013/14 represented a radical first step twards a new natinal funding frmula fr schls but had prduced sme unintended cnsequences which the new guidance was keen t vercme. The LA s initial view is that these changes will effectively allw us t reinstate sme f the flexibilities which were available prir t the 2013/14 review such as the prtectin f small schls and the setting f different lump sum values fr primary and secndary settings. Whilst this is ptentially a psitive mve it is hwever imprtant t recgnise that a lt f the changes made in 2013/14 culd effectively be reversed in 2014/15 and this turbulence is cnsidered unhelpful fr individual schls and academies in preparing meaningful medium term (i.e. three year) financial plans. 3.4 Furthermre, whilst the DfE remains cmmitted t intrducing a new natinal frmula fr bth the redistributin f DSG acrss LAs and the allcatin f individual schl budgets, the timeline fr these changes remains unclear ther than bth are expected t take place during the next Gvernment Spending Review perid i.e. frm 2015/16 at the earliest. This means that any lcally agreed changes made in 2014/15 culd well be reversed within the next few years and the LA is keen t avid being respnsible fr a system that repeatedly prduces different annual winners and lsers as the same verall level f funding is marginally redistributed. All changes must be made after a cnsultatin prcess with thse settings which are directly affected and the LA will be keen t cnsider whether stability is mre imprtant than temprary changes which, whilst ptentially mre fairer, may nt be sustainable. 3.5 The scpe f the mainstream funding changes required / allwed by DfE in 2014/15 is described belw tgether with a draft cnsultatin plan. As the LA

4 must submit its prpsed 2014/15 lcal funding frmula fr mainstream schls t the EFA by the end f Octber 2013 (subject t refinement f values and resubmissin t EFA by the 21 st January 2014) the cnsultatin with schls (via Headteacher Assciatins) must be finalised by the end f September t enable Schls Frum t review the psitin at its 8 th Octber 2013 meeting. 3.6 Attached as Appendix 1 is a summary f the current mainstream funding factrs and values which, fllwing cnsultatin, were used t determine 2013/14 funding allcatins. Lcal Refrm Issues t Address in 2014/15 a) Funding fr Deferred Receptin Admissins Mainstream primary settings 3.7 Until 2013/14 the DSG funding allcated t LAs in each financial year was based n infrmatin arising frm the preceding January schl census (PLASC) date. Individual funding allcatins t schls and academies frm the lcal frmula were als based n January PLASC data but under the schl funding refrm prgramme, all delegated mainstream funding is nw based n the preceding Octber. 3.8 It was recgnised in the build up t the 2013/14 budget setting prcess that sme primary settings may be detrimentally affected by this change. Althugh children wh are due t start schl fr the first time are ffered places in the September, parents f children wh are nt f statutry schl age have the right t defer the entry f their child until the term after their 5 th birthday. This must hwever be agreed with the schl cncerned in advance f their start date. This means that a schl may need t reserve a place fr a pupil wh may nt actually be in schl n the Octber PLASC date which means that they will nt qualify fr any pupil based funding in the fllwing year. 3.9 On a natinal level DfE make a minr adjustment t the DSG fr thse LAs which experienced deferred entries in the previus year and fr 2013/14 SBC received schl blck DSG fr 30 extra pupils. The LA recgnises that schls experiencing deferred entries shuld nt be detrimentally affected in terms f their annual funding and frm 2014/15 nwards prpses t create a receptin uplift factr which is allwable under the new schl finance regulatins. This wuld prvide additinal funding in 2014/15 t thse settings where their January 2013 receptin pupil numbers were higher than their Octber 2012 receptin pupil numbers. An estimate f the impact n individual settings is attached at Appendix 2 t this reprt and shws that this wuld allcate extra funding f 101,991 t 18 schls. Schls Frum is asked t agree t the establishment f a receptin uplift factr t be used when calculating 2014/15 schl funding allcatins.

5 b) Minimum Funding Guarantee Exemptins Primary BPPE Funding 3.10 When setting the 2013/14 lcal frmula funding rates Schls Frum members may recall that a permanent increase was made t bst Lw Prir Attainment funding frm 359 t 702 per eligible pupil as SBC rates were well belw Suth West reginal averages. The cst f this increase was 1.5m and funding was prvided frm headrm in the DSG created by permanent reductins t the retained budget. This level f funding shuld therefre be secure in 2014/ In additin, the Frum als agreed t bst primary BPPE rates in 2013/14 frm 2,590 t 2,645 as SBC funding was marginally belw Suth West Reginal rates. The cst f this increase was 0.9m and funding was prvided by using apprximately 50% f the prjected ne-ff surplus DSG which the LA estimated wuld be carried frward at the end f 2012/13. Use f the remaining 50% neff funding in 2014/15 wuld be subject t a benchmarking exercise aimed at smthing ut funding differences between SBC rates and ptential natinal funding rates Whether the LA and Schls Frum will chse t repeat the bst t primary BPPE rates in 2014/15 remains t be seen and it is pssible that ther factrs may be cnsidered mre apprpriate. T avid this ne ff funding being lcked in t the MFG calculatins the LA will therefre, as a precautin, need t secure EFA apprval fr this t be exempted frm 2014/15 primary sectr MFG calculatins. Schls Frum is asked t agree t the LA seeking apprval t exclude the ne ff bst t primary BPPE funding frm the 2014/15 MFG calculatin. c) Universal High Needs Tp ups Pre 16 Special Schl and Special Resurce Prvisin Pupils 3.13 Fr Special Schls the mve t place plus funding in 2013/14 was relatively straightfrward as the LA had implemented a pupil led banding/funding system in 2012/13 and the DfE s new requirement was t a large extent met by simply splitting existing special schl band funding between place and tp up values. Pupils in the 6 special schls are all currently funded frm ne set f band and tp up values althugh a BESD supplement, initially adding 30% t prtect Nylands and St Luke s was agreed by ASSSH which is t be phased ut after 3 years Fr mainstream schls with Special Resurce Prvisins the transitin t place plus funding was much mre difficult as these settings had riginally been set up n the basis f funding being prvided t cver staffing and ther csts with subsequent annual adjustments t recgnise changes in place numbers. Prir t 2013/14 each SRP effectively received a unique level f funding per place and althugh place plus was implemented in 2013/14 this required the LA t establish an unwieldy number f 10 ranges f tp up values in rder t avid year n year

6 funding changes. (This was necessary as specialist settings wuld have been eligible fr MFG prtectin if funding per pupil reduced significantly) The current psitin is that whilst Special Schl pupils and SRP pupils are all banded different mdels are used. Fr SRP s, unlike special schls, the tp up values payable, althugh identical fr similar settings, are still partly histric. Fr example band A tp up funding rates vary frm 27,160 fr pupils with sensry difficulties attending the Redaks SRP t 7,780 fr pupils with speech, language and cmmunicatin difficulties attending the Cmmnweal SRP. These figures are nt quted t imply that there is any under r ver funding at either setting nly t illustrate that the funding system is unclear. Fr SRPs we have 10 different band A values and furthermre there is n link t the Special Schl bandings and funding values Fr SEN pupils in nn-srp mainstream settings a different funding methdlgy is perating whereby individual settings submit requests t the SENRAP panel fr additinal funding t meet identified needs abve 10,000 per year. As these cases are mre individual the LA des nt aim t base funding fr these pupils n a universal banding mdel althugh this may be pssible in future years. The LA wuld als like t cnsider using a banding system in future years t determine pst 16 funding althugh the level f funding allcated fr these pupils is currently very different and prving prblematic Frm 2014/15 the LA intends t implement a universal banding system which prvides apprpriate levels f funding acrss all specialist settings. This des nt mean that every setting will necessarily receive the same level f funding per pupil but a simpler mre transparent funding system needs t be established s that any differences in per pupil funding are apprpriate and clearly understd. T help achieve the new funding mdel the LA issued 2013/14 funding allcatins and prfrmas t capture 3 year spending plans frm all Special Schls and SRPs in February. These are due t be received by the end f June and will be reviewed by a task grup chaired by Gill Ilic (Cmmissiner fr Educatin) made up f Special Schl and SRP representatives supprted by the Finance Team. Updates will be prvided t the January and Octber Schls Frum meetings prir t 2014/15 tp up rates being agreed As reprted elsewhere n tday s agenda (see 2013/14 budget update) despite funding being allcated in accrdance with cnsultatin dcuments, a number f specialist settings d nt currently feel that they are receiving sufficient funding and, with a cntinued cash freeze envisaged n the verall DSG, it is imprtant that any perceived shrtfalls are fully understd. Unless crrespnding reductins in the funding f ther high need settings are identified t prvide additinal funding, allcatins t early years, schls and pst 16 prviders wuld need t be reduced. All csts will need t be rbustly challenged and sme settings will be asked t describe hw prvisin is rganised and sme site visits are envisaged. Specialist settings will be eligible fr MFG prtectin in the

7 same way as mainstream schls. An utline cnsultatin plan is attached at Appendix 3 (t fllw) Schls Frum is asked t cmment n and supprt the LA s aim f implementing a mre universal banding/funding scheme fr all specialist pre 16 settings and t review the draft cnsultatin plan at Appendix 3. d) Minimum Funding Guarantee Exemptins - Special Schl BESD Premium 3.19 As mentined abve when the LA implemented a band based funding mdel fr special schls in 2012/13 the level f funding per pupil allcated t bth Nylands and St Luke s was higher than the ther special schls. During cnsultatins with ASSSH it was agreed that this was unfair but shuld be phased ut ver three years t give these settings time t reduce their cst bases. A BESD premium, initially at 30% abve the basic band values was established in 2012/13, reducing t 20% in 2013/14 and 10% in 2014/15. The intrductin f place plus meant that the phased reductins culd nly be applied t the tp up element and funding rates were set in 2013/14 t prduce the same verall reductin in funding as was riginally envisaged Fr 2014/15 the third and final year f BESD premium funding will apply and indicative rates shwing BESD premiums reducing by 50% next year and t be harmnised with ther special schls in 2015/16, are shwn in the table belw: Table 1 - Current and indicative 2014/16 Special Schl Tp Up Band Values Banding 2013/14 Actual 2014/15 Indicative 2015/16 Indicative Band 1 with BESD Premium 22,021 18,489 Band 1 14,950 14,950 Band 2 with BESD Premium 19,072 16,264 Band 2 13,455 13,455 Band 3 with BESD Premium 10,223 8,049 Band 3 5,875 5,875 Band 4 with BESD Premium 5,797 4,132 Band 4 2,467 2,467 14,950 13,455 5,875 2, After taking accunt f the fixed 10,000 place funding the impact f the indicative 2014/15 and 2015/16 tp up rates will be t reduce BESD funding per pupil by 10% in each f the next tw years. Clearly the abve tp up values may change as a new universal banding system is implemented but BESD premiums will be phased ut as riginally agreed. Fr 2014/15 in rder t ensure funding is nt lcked int the tw BESD special schls via the MFG prtectin scheme

8 the LA will seek t exclude the reductin in tp up value frm the MFG calculatin. Schls Frum is asked t agree t the LA seeking apprval t exclude the reductin in BESD premium funding frm 2014/15 MFG calculatins. Indicative 2014/15 DSG Funding Levels 3.22 The 4 th June annuncement cnfirmed that per pupil funding rates fr early years ( 3,888.06) and schls blck ( 4,102.23) funding wuld remain unchanged in 2014/15 meaning that funding per pupil remains frzen at 2010/11 levels. As an area with a grwing ppulatin ur funding will increase based n the schl and early years census infrmatin but in real terms the value f funding per pupil is gradually being erded after taking accunt f cst inflatin. The basis by which the LA s High Needs Blck funding will be calculated in 2014/15 remains unclear. Given the cntinuing demand pressures relating t increasing high needs pupil and student numbers this is a significant risk fr the DSG, particularly in respect f pst 16 prvisin The DfE is clear that whilst the DSG funding allcatins are made up f three separate blcks it is fr LAs and their Schls Frums t make strategic decisins abut the distributin f funds t best meet the needs f their areas taking accunt f demgraphic and ther pressures. In practice, this means that if insufficient high needs funding is prvided, cuts will be required t early years and mainstream funding. The Schls frum will be asked t agree final funding allcatins at the January 2014 and March 2014 Schls Frum meetings which may require the transfer f funding acrss the DSG blcks (Despite this uncertainty DfE have advised that LAs must, during cnsultatins, prvide indicatins f hw all settings wuld be affected by changes t funding factrs. The LA will therefre base all mainstream mdelling n current funding rates with a caveat that these are indicative nly and culd change if fr example funding needs t be diverted frm schls t high needs in 2014/15. Schls Frum is asked t nte that - - whilst 2014/15 DSG funding rates have been cnfirmed fr early years and mainstream schls the value f the high needs blck and therefre the verall DSG settlement cannt be quantified at this stage. - fr mdelling purpses the LA will initially assume existing mainstream funding values will cntinue in 2014/15. Natinal Refrm Issues t Address in 2014/15 Mainstream 3.24 After the radical changes t limit the range f funding factrs that culd be used by LAs in determining mainstream schl funding allcatins in 2013/14, the scpe f the changes required by DfE in 2014/15 are relatively minr althugh

9 the resulting lnger term financial impact n individual settings may nt be. Attached at Appendix 4 is a summary f all the ptins available fr lcal determinatin which are described belw T avid the unintended cnsequences f the 2013/14 frmula changes relating t mainstream funding a number f flexibilities are available fr 2014/15 as summarised belw tgether with the LA s initial thughts n their implicatins and merits. The DfE annuncement states that they expect that significant amunts f MFG prtectin will be payable in 2014/15 and that, with a freeze in DSG funding rates, it will be necessary fr gains t be capped r scaled back. There is ne change t the regulatins in that funding cannt be capped r scaled fr schls which have pened in the last seven years but have nt reached their full number f year grups. Fr Swindn all schls and cnverter academies are currently receiving pupils at all age grups althugh Crft Primary Schl, which pened in September 2012 fr Receptin nly will fill up year n year until pen in all year grups in September As Crft is a spnsred academy funded utside Swindn s DSG the LA will nt be invlved in their capping r scaling calculatins Fr individual mainstream schls and academies MFG prtectin must be prvided t ensure n setting lses mre than 1.5% per pupil and similar prtectin must be affrded fr specialist settings. Any reductins in early years and pst 16 funding are hwever excluded frm this calculatin. The DfE advises that MFG prtectin will cntinue beynd 2014/15 but the level will be determined after the Gvernments Cmprehensive Spending Review has been assessed. New Optinal Sparsity Factr DfE prescribed maximum eligibility with lcally determined fixed r variable values 3.27 This is the nly new factr that can be used and is aimed at supprting necessary small schls mainly in rural areas. Where a sparsity factr is used up t 100,000 per schl can be allcated by effectively tp slicing the DSG t prvide an extra subsidy t ensure small schls remain financially sustainable. The factr can be a flat annual rate r culd taper t prvide individual schls with higher funding fr fewer pupils in the same way as the LA s previus small schls prtectin scheme perated The DfE will predetermine which schls are eligible fr sparsity funding based n them meeting bth f the fllwing criteria; A) Pupil numbers must be lwer than 150 (primary) r 600 (secndary) Based n Octber 2012 pupils this wuld cver 4 Swindn primary settings - Bishpstne (35 pupils), Clebrk infants (136 pupils), Oliver Tmkins Infants (141 pupils) and Suth Marstn (107 pupils)

10 A further 13 primary settings had between 151 and 200 pupils and wuld nt qualify fr any sparsity factr funding B) The Average distance frm hme pst cdes f pupils in schl t their next nearest schl must exceed 2 miles as the crw flies fr primary schls r 3 miles fr secndary schls. The LA s assessment is that all 4 primary settings with fewer than 150 pupils wuld nt autmatically qualify (Chiseldn is the nly primary schl recgnised as meeting the distance criteria but their pupils exceed 150. Similarly Warnefrd meet the distance criteria but exceed the pupil threshld. Bishpstne and Suth Marstn primary schls culd qualify if the LA sught t amend the criteria t recgnise safe walking distances, which in bth cases exceeds 2 miles. LAs can narrw the eligibility criteria by reducing the pupil number threshld and/r increasing the distance criteria but they cannt widen the scpe f eligibility abve the DfE mdel described abve ther than t request safe walking distance t be cnsidered When small schls prtectin was withdrawn, the DfE s view at that time was that this shuld, thrugh necessity, prmpt small schls t seek pprtunities t reduce/share staffing and ther perating csts by amalgamating r federating with ther schls. Recent experience suggests that schls may be reluctant t pursue this preferring t retain their independence even if faced with lng term reductins in MFG prtectin T remain sustainable withut reducing csts smaller schls will need t be subsidised by ther schls and the LA s initial view is that a sparsity factr shuld be implemented, which wuld be tapered t prvide a lwer subsidy as pupil numbers reached 150. Under the previus lcal scheme funding was allcated fr schls within 3 bands less than 75 pupils, 76 t 91 pupils and 91 t 140 pupils and annual values ranged frm 24,000 t 105,000. Under the new DfE mdel this wuld need t be simplified s that a schl with 75 pupils received 50% f the lcally determined maximum sparsity factr value whilst a schl with 30 pupils wuld receive 80% f the sparsity factr value etc. Schls Frum members are asked fr their initial views n the creatin f a new sparsity factr. Sectr Lump Sums Optinal factr with a maximum value 3.31 The LA can chse t have different lump sums next year fr primary and secndary schls up t a maximum annual value f 175,000. Where tw schls amalgamate the new schl will receive 85% f the ttal lump sums f the predecessr schls fr the next full year.

11 3.32 Fr 2013/14 Schls Frum members will recall that a lump sum value f 106,700 was determined fr Swindn based n a ntinal estimate f the csts f a Headteacher, bursar and ther fixed csts. (The DfE has nt specified the scpe f what the lump sum is suppsed t cver but nw recgnise that the fixed csts f primary and secndary schls are different) Under the previus lcal frmula all secndary settings received apprximately 250,000 per year whilst primary settings received values varying frm 60,000 t 94,000 depending n their pupil numbers. When the single lump sum value was intrduced Schls Frum agreed the LA s apprach that sectr funding ttals wuld be retained i.e. the verall saving t the lcal frmula f reducing secndary lump sum values was recycled as an increase t secndary Basic Per Pupil Entitlement funding Fr 2014/15 the LA s initial view is that: The existing lump sum value f 106,700 shuld be retained and applied t all primary settings The lump sum value fr secndary schls shuld be increased frm 106,700 t the maximum 175,000 allwed but that the additinal cst t the lcal frmula f this, estimated at 683,000 is met by reducing the secndary BPPE rates accrdingly. This will marginally benefit schls with falling rlls as they will lse a lwer amunt f pupil based funding. Schls Frum members are asked fr their initial views n the establishment f separate sectr lump sums. Lked After Children Factr Optinal factr, DfE prescribed eligibility with lcally determined single value 3.35 The LA did nt establish this as an ptinal factr in 2013/14 n the basis that the Pupil Premium already generated additinal funding (currently 900) fr these pupils. If such a factr were t be intrduced next year, funding must be allcated fr any child wh was in care fr at least ne day during the perid specified by DfE which fr 2014/15 funding is as at 31 st March 2013 (based n the LA s SSDA903 return mapped t schls using the January schl census). Apprximately 116 Swindn pupils wuld be eligible fr this funding which wuld have t be created by reducing an existing factr value. Whilst is it imprtant t nte that the number f LAC pupils is relatively small, attainment fr pupils at bth KS2 and 4 is well belw that fr nn LAC pupils. Attainment and prgress has shwn sme imprvement ver 3 years at KS4 but bth have declined at KS2 during the same perid. T further supprt imprving utcmes fr this particularly vulnerable grup f students it is the LA s view is that an ptinal factr fr LAC shuld be intrduced in 2014/15 at a value f 400

12 per pupil. Based n current eligible LAC students this cst apprximately 46,400 per year Schls Frum members are asked fr their initial views n the establishment f a Lked after Children funding factr. Optinal Split Site Factr 3.36 The LA des nt intend t intrduce a split site factr as this was debated and dismissed during the last cnsultatin. Schls Frum members are asked fr their initial views n the establishment f an ptinal split site funding factr. Lw Prir Attainment Factr Optinal factr, DfE prescribed eligibility with lcally determined single r sectr values 3.37 The LA did use this ptinal factr in 2013/14 and currently allcates per eligible pupil. Fr 2014/15 eligibility fr primary age pupils will be based n thse pupils nt achieving a gd level f develpment within the new Early Years Fundatin Stage Prfile and thse achieving fewer than 78 r 73 pints under the ld prfile (SBC decided n 78). Pupils in Octber 2013 will have been assessed under the new prfile intrduced in September 2012 whilst ther pupils assessment will still be measured via the ld prfile The main change fr 2014/15 is that fr secndary age pupils eligibility is extended t include thse pupils which at Key Stage 2 did nt achieve level 4 in English r Maths whereas currently eligibility is nly based n pupils wh did nt achieve level 4 in bth subjects. Frm 2013 the DFE will nt be calculating an verall level fr English but utcmes fr grammar, punctuatin, spelling, and reading will be reprted separately. Initial estimates are that an additinal 1,462 pupils will becme eligible fr this funding at an annual additinal cst at current rates ( ) f 1,025, The LA s view is that this factr shuld be retained in 2014/15 but that it wuld be unaffrdable t retain the same funding value and further wrk needs t be dne n this ptentially significant item. Schls Frum members are asked t nte the increased eligibility fr secndary sectr pupils, cnfirm the retentin f this factr and fr their initial views n the value that shuld be paid t each sectr. Pupil Mbility Factr - Optinal factr, DfE prescribed maximum eligibility with lcally determined values 3.40 The LA did nt use this ptinal factr in 2013/14 as it was nt cnsidered a significant issue fr Swindn. If such a factr were t be intrduced next year,

13 funding must be allcated when the number f mbile pupils exceeds 10% as determined by DfE. This is calculated using the schl start date fr each pupil frm the Octber census and any funding must be allcated if the number f pupils in the last three academic years which did nt start in August r September exceeds 10%. Schls with up t 10% mbility wuld nt be eligible and nly funding and a schl with 15% mbility culd nly attract additinal funding fr 5% f its pupils The LA s initial view is that an ptinal factr fr mbility shuld nt be intrduced in 2014/15. Schls Frum members are asked fr their initial views n the intrductin f a pupil mbility factr. Basic Entitlement Funding Levels Mandatry factr with DfE prescribed minimum sectr values in 2014/ The requirement t fund all primary age pupils at the same rate and fr ne r tw factrs (KS3 and KS4) t be used fr secndary age pupils remains unchanged frm 2013/14. Althugh DfE have nt prescribed a rati between primary and secndary funding this is t be expected in future years and they have set minimum BPPE values fr 2014/15 which are shwn belw tgether with Swindn s current rates: DfE Minimum Values 2014/15 SBC Actual Values 2013/14 Primary KS1 and KS 2 2, , Secndary KS3 3, , Secndary K4 3, , Schls Frum members are asked t nte that SBC s current levels f BPPE funding cmfrtably exceeds the DfE minimum requirement. Pupil Based Funding Levels DfE prescribed %ages 3.43 DfE have als intrduced a new cnditin which requires at least 80% f delegated mainstream funding t be distributed by pupil led factrs in 2014/15. SBC s psitin is summarised belw: Primary Secndary Pupil Led Funding (BPPE, FSM, LPA, EAL etc.) m m % Pupil Led 87.4% 95.0%. Schl Led Funding (Lump sum, NNDR etc.) 7.921m 2.387m Ttal Delegated Funding m m

14 Schls Frum Members are asked t nte that SBC s current frmula cmfrtably exceeds the DfE minimum requirement t allcate at least 80% f funding based n pupils. Temprary Falling Rlls Fund Optinal factr. Lcally determined scheme and values but DfE defined eligibility 3.44 Under the new guidance the LA may, by tp slicing the DSG, create a centrally retained fund t cver temprary falling rlls in advance f a ppulatin bulge where there is clear evidence that it is likely that rlls will rise again. As with the existing pupil grwth fund, the Schls Frum must, after cnsultatin, apprve the criteria and funding methdlgy attached t any such falling rlls fund which wuld als have t be validated by the EFA. DfE are clear that the falling rlls fund must nt be used t supprt unppular r failing schls and a summary f the requirements f any such fund are as fllws; The fund shuld be restricted t ppulatin increases expected in 2 t 3 years in necessary schls which are classed by OFSTED as gd r utstanding. Surplus capacity must exceed a lcally determined pupil number r % f published admissin numbers and lcal planning data must demnstrate that a defined prprtin f the surplus places will be required within 2 r 3 years. Funding can be allcated as a value per vacant place r as a lump sum calculated t meet specified csts and differences are permitted between phases. Funding shuld nly be prvided where existing funding available t a schl will nt supprt prvisin f an apprpriate curriculum fr the existing chrt and/r the schl will need t make redundancies in rder t cntain spending within its frmula budget Frum members will be aware that there has been an verall fall in secndary age pupils acrss the Brugh whilst significant additinal primary places cntinue t be required. The LA s estimate f secndary pupil numbers ver the next few years is summarised belw. This shws an increase frm Octber 2016 althugh the extent t which demand culd be met by free schls, the University Technical Cllege and FE Clleges admitting age pupils is difficult t determine. Estimated mainstream pupils as at Primary Secndary Octber ,683 10,853 Octber ,204 10,625 Octber ,697 10,468 Octber ,299 10,386 Octber ,683 10,476

15 3.46 The LA s initial view is that the establishment f a factr will nt be required in 2014/15 and that the peratin f a temprary falling rlls funds will create significant cmplexity and may require significant ghst pupil funding t be unnecessary allcated t certain schls t the detriment f the verall DSG and therefre all ther educatin prviders in Swindn. Furthermre the LA has n invlvement r rle in mnitring the financial psitin f an Academy after cnversin and culd nt effectively judge whether reasnable steps had been taken t reduce csts in line with pupil reductins as pprtunities presented themselves Creating such a fund wuld appear t be a step away frm a simple, transparent, pupil led funding mdel and the LA feels that any setting which experiences a temprary fall in rlls shuld be able t remain sustainable via a cmbinatin f reducing perating csts and managing their balances. The LA s initial view is that a temprary falling rlls fund shuld nt be intrduced in 2014/15. Schls Frum members are asked fr their initial views n the intrductin f an ptinal temprary falling rlls fund. Ntinal SEN Funding Mandatry Factr, DfE prescribed value, but lcally determined make up f funding 3.48 All LAs are required frm 2014/15 t ensure they have delegated at least enugh funding fr mainstream schls t meet the first 6,000 f additinal csts fr their high need pupils. Where additinal funding is allcated t schls with disprprtinate numbers f high needs pupils, the EFA will be required t validate the methdlgy used. Schls Frum members are advised that the LA met the delegatin requirement in 2013/14 and expects the methdlgy used t be apprved by the EFA. Areas which culd be reviewed but changes are nt required by DfE 3.49 In establishing the 2013/14 frmula Schls Frum members may recall that steps were taken t harmnise funding rates between sectrs with crrespnding increases r decreases t BPPE rates t bradly maintain verall sectr funding ttals. In the interests f stability the LA is seeking t maintain the existing frmula in 2014/15 unless DfE require factrs t be reviewed (these are detailed abve) r there is an verwhelming lcal reasn which wuld clearly increase the fairness f funding allcatins Summarised belw are thse factrs which are currently in use and the flexibilities available which the LA is nt prpsing t review in 2014/15:

16 Factr per pupil unless therwise stated Primary Secndary EAL (1,2 & 3yrs) EAL Flexibility allwed Culd reduce eligibility t 1 r 2 years Culd have a different amunt r different amunts per sectr Culd cease altgether as ptinal factr IDACI Band 1 40% is ntinal SEN IDACI Band 2 40% is ntinal SEN IDACI Band 3 40% is ntinal SEN IDACI Band 4 40% is ntinal SEN IDACI Band 5 40% is ntinal SEN IDACI Band 6 40% is ntinal SEN 1, , IDACI Flexibility allwed Culd set new band values which culd be different per sectr Culd cease altgether and use FSM/FSM6 fr all deprivatin funding FSM Ever 6 40% is ntinal SEN FSM Flexibility allwed Culd mve frm FSM6 t FSM (current) Culd set new values which culd be different per sectr Culd cease altgether and use IDACI fr all deprivatin funding NNDR (Business Rates) - per schl Actual cst Actual Cst NNDR Flexibility allwed Culd cease altgether as ptinal factr NB a minr change is being intrduced frm 2014/15 whereby all settings must be funded based n the LA s estimate f actual csts any adjustments due t revaluatins etc. must be made in the next funding perid. This prcess is line with the prcess applied t Swindn schls where all settings are funded based upn the LA s latest estimate. Actual rates are cnfirmed in February and paid in April. Schls are charged in line with the estimated value included within their frmula allcatin. Any differences between estimated and actual rate charges are managed centrally. Schl allcatins are updated in the fllwing funding perid. PFI Affrdability Gap funding per schl Actual cst Actual Cst PFI Affrdability Gap Flexibility allwed Culd cease altgether as ptinal factr but wuld have t create a matching centrally retained budget which wuld marginally reduce any tp up charges paid by ther LA pupils fr placements at Swindn Special Schls

17 Schls Frum members are asked t agree that the abve factrs will remain unchanged in 2014/15 ther than if there is any scpe t apply inflatinary increases frm DSG. Exceptinal Premises Factr Optinal Factr 3.51 Althugh Swindn did nt intrduce an exceptinal premises factr in 2013/14 a number f LAs did btain DfE apprval t recgnise and prvide additinal funding where the nature f a schl s premises resulted in them facing exceptinal high csts. This typically included schl premises which were rented, listed buildings r where a schl had a farm which was included as part f its educatin prvisin. Any such csts had t equate t mre than 1% f the schls budget and affected fewer than 5% f an LA s schls/academies. Mre relevant t Swindn is that funding culd als be allcated where a schl has t hire PE facilities r has jint use f leisure facilities. This is the case fr Highwrth Warnefrd, Drcan and Cmmnweal academies Althugh the csts levied t these settings have histrically been relatively lw (the annual charges are currently 12,000, 45,000 and 14,000) the cuts t lcal gvernment funding have required all Leisure and Culture subsidies t be reviewed. T qualify as being eligible fr exceptinal premises funding annual csts wuld have t exceed 1% r 40,000 t 50,000 per academy. The LA s initial view is that a new exceptinal premises factr shuld be cnsidered fr intrductin in 2014/15 althugh it is unlikely that any Swindn setting wuld becme eligible fr funding in that year. Furthermre as these settings d nt have the perating csts f maintaining their wn facilities the LA wuld seek DfE apprval t fund 50% f any rental csts. Schls Frum members are asked fr their initial views n the intrductin f an ptinal exceptinal premises funding factr. Equal Treatment 3.53 When cnstructing frmulas LAs must take int accunt the characteristics f all maintained schls and academies in their area including nn-recupment academies and free schls. Fr SBC this means Swindn Academy (Frmer Penhill primary and all secndary prvisin) and all Crft Academy pupils must be cnsidered even thugh these pupils are funded utside the scpe f Swindn s DSG In practise the nly issue identified fr Swindn, as reprted elsewhere n tday s agenda, is that despite receiving DfE cnfirmatin that this wuld nt be the case, it wuld appear that the LA must include Crft pupils in its pupil grwth (trigger funding) calculatins and make in year allcatins frm Swindn s DSG.

18 Schls Frum members are asked t nte that pupil grwth must be prvided t all settings where this is required t meet basic need fr places even where settings are funded entirely utside the LA s DSG. Schls Frum Representatin 3.55 A minr change t the Schls Frum regulatins will require ne member f an institutin prviding pst 16 educatin (ther than a schl r academy) t jin the Frum whereas previusly, this culd be a representative f the partnership. Schls Frum is advised that this change des affect SBC as the 4-19 representative psitin n the Frum is already held by the principals f Swindn and New Cllege n an alternating basis. Cnsultatin Prgramme Mainstream Optins 3.56 Althugh the scpe f 2014/15 changes is less than 2013/14 there are still a significant number f issues t cnsider and the LA is required t cnsult with all affected schls. The EFA timescales require funding factrs and indicative values t be identified by the end f Octber with final values set by the 21 st January. The LA intends t fulfil the cnsultatin requirements via presentatins t Headteacher Assciatins fllwing a similar prgramme t last year as summarised belw; Event Date 1) Awareness raising event fr all Headteachers and schl gvernrs t prvide an verview t the changes required, July/August 2) Presentatin cnsultatin t Swindn Assciatin f Primary September? Headteachers with indicative mdelling f ptins 3) Presentatin cnsultatin t Swindn Assciatin f Secndary September? Headteachers with indicative mdelling f ptins 4) Update reprt t Schls Frum 8 th Octber 5) Initial prfrma submitted t EFA 31 st Octber 6) Indicative 2014/15 funding allcatins issued fr discussin at a. SAPH Nvember b. SASH Nvember 7) Update reprt with indicative 2014/15 funding allcatins 21 st reprted t Schls Frum January 8) Final prfrma submitted t EFA 21 st January 9) Final Reprt t Schls Frum 11 th March

19 Schls Frum members are asked t cmment n the prpsed mainstream cnsultatin prgramme. 4. Alternative Optins 4.1 The LA has a statutry duty t manage and distribute the Dedicated Schls Grant (DSG) in accrdance with prevailing grant cnditins and the Schl Finance Regulatins. DfE have prescribed the ptins available t Lcal Authrities, sme f which are mandatry whilst sme are discretinary, but in mst cases funding values are t be lcally determined. The ptins available are described thrughut this reprt and will be included in cnsultatins with all schls. 4.2 The LA s final prpsals relating t 2014/15 will be presented t the Schls Frum in January 2014 and will need t be validated by the Educatin Funding agency t ensure they are in cmpliance with the new regulatins. 5. Implicatins, Diversity Impact Assessment and Risk Management Financial and Prcurement Implicatins 5.1 As this is essentially a financial reprt the implicatins are explained thrughut the dcument. At this stage the impact f any funding changes n individual early year s settings, schls, sixth frms, clleges and ther prviders cannt be determined althugh schls are prtected by the Minimum Funding Guarantee which fr 2014/15 prevents annual lsses f mre than 1.5% per pupil. 5.2 It is imprtant t recgnise that n setting is currently financially prtected against reduced pupils r students althugh frm 2014/15 the LA has an ptin t prtect gd and utstanding schls and academies frm temprary falling rlls as described in sectin 3. Legal and Human Rights Implicatins 5.3 There are n legal and human rights implicatins arising frm this reprt. All Other Implicatins (including Staff, Sustainability, Health, Rural, Crime and Disrder) 5.4 Althugh the impact n individual settings cannt be determined at this stage the schl funding refrm prgramme is causing a degree f vlatility in schl finance which may have implicatins fr schls and ther prviders which are detrimentally affected by the redistributin f funding, As reprted elsewhere n tday s agenda, cuts in pst 16 high needs funding is directly affecting Further Educatin prviders in 2013/14 and whilst schls will benefit frm MFG prtectin in future years the actual level f prtectin beynd 2014/15 is subject t the natinal Cmprehensive Spending Review and may well be lwer than the current 1.5% per pupil.

20 Links t One Swindn, Strategic Objectives, Plans and Plicies 5.5 Utilisatin f the DSG has a direct link t tw f the Cuncil s five pririties Right skills, right jbs in the right place and Make the best use f Swindn s resurces inside and utside the Cuncil. Diversity Impact Assessment 5.6 The DfE s schl funding refrm prgramme is aimed at simplifying fair funding and althugh funding changes at individual settings are inevitable the DfE believes that the MFG prtectin scheme fr schls will be sufficient t minimise any adverse impacts. The refrm prgramme is clearly aimed at ensuring funding is targeted at disadvantaged pupils and at pupils with lw prir attainment and/r special educatin needs in rder t narrw the attainment gap between these and ther pupils. Risk Management 5.7 The key risks arising frm this reprt are that lcal decisins relating t schl funding culd lead t an verspend n the 2014/15 DSG and/r that the EFA culd deem that ur funding arrangements d nt cmply with the schl finance regulatins requiring budgets t be recalculated. 6. Cnsultees 6.1 The Bard Directr Resurces (Sectin 151 Officer) and Directr f Law and Demcratic Services (Mnitring Officer) are cnsulted in respect f all reprts. 7. Backgrund Papers 7.1 Varius dcuments issued by the Department fr Educatin n 4 th June 2013 annuncing the 2014/15 schl funding refrm changes. 8. Appendices 8.1 The fllwing appendices are attached: Appendix 1 Summary f mainstream funding factrs and values used t determine 2013/14 delegated budgets. Appendix 2 Indicative impact f funding deferred primary schl admissins. Appendix 3 Cnsultatin plan re funding fr High Need pupils in specialist settings t fllw. Appendix 4 Summary f mainstream cnsultatin issues.