Cabinet Member (Education) 10 April 2013

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1 abc? Public reprt Cabinet Member Cabinet Member (Educatin) 10 April 2013 Name f Cabinet Member: Cabinet Member (Educatin) Cuncillr Kershaw Directr Apprving Submissin f the reprt: Directr f Children, Learning and Yung Peple Clin Green Ward(s) affected: All Title: Impact f Schl Funding Refrm Is this a key decisin? N Executive Summary: The Schl Funding Refrm directed lcal authrities t implement significant changes in lcal schl funding arrangements fr the 2013/14 financial year. Cventry Schls Frum had set up 2 wrking grups t facilitate the Schl Funding Refrm fr 2013/14 and fair funding frmula change prpsals were develped and cnsulted n with all stakehlders via the Fair Funding Cnsultatin. The utcme f the cnsultatin was apprved by Cabinet in Oct The deplyment f the Schl Budget was apprved by the Schls Frum in January 2013, and maintained mainstream schls have nw received their budget shares fr 2013/14. The Schl Funding Refrm als directed lcal authrities t implement the Place-plus funding methdlgy fr special schls. One f the key features f this funding apprach is that an element f the funding is pupil led therefre this means that special schl budgets will nt be finalised until the end f the financial year. Indicative budgets have been issued t special schls based n the best estimates. Recmmendatins: Cabinet Member (Educatin) is requested t: 1. Endrse the schl level budget impact f the 2013/14 Schl Funding Refrm n maintained schls; 2. Nte the different funding apprach fr pupils with high needs and ptential impact n schls and lcal authrity high needs place planning; List f Appendices included: Appendix A: Analysis f the Schl Funding Changes between 2012/13 and 2013/14

2 Other useful backgrund papers: The Fair Funding Cnsultatin 2013/14 can be accessed via: The Department fr Educatin papers n the Schl Funding Refrm 2013/14 can be accessed via: l-funding-refrm Has it been r will it be cnsidered by Scrutiny? N Has it been r will it be cnsidered by any ther Cuncil Cmmittee, Advisry Panel r ther bdy? N Will this reprt g t Cuncil? N 2

3 Impact f 2013/14 Schl Funding Refrm 1. Cntext (r backgrund) 1.1 The Schl Funding Refrm directed lcal authrities t implement significant changes in lcal schl funding arrangements fr the 2013/14 financial year. Cventry Schls Frum had set up 2 wrking grups t facilitate the Schl Funding Refrm fr 2013/14 and fair funding frmula change prpsals were develped and cnsulted n with all stakehlders via the Fair Funding Cnsultatin. The utcme f the cnsultatin was apprved by Cabinet in Oct The deplyment f the Schl Budget was apprved by the Schls Frum in January The 2013/14 schl budget prfrma had been submitted t the Educatin Funding Agency (EFA) in Jan Maintained mainstream schls have received their budget shares and special schls have als received their indicative budgets fr 2013/ Optins cnsidered and recmmended prpsal 2.1 Changes required by the Schl Funding Refrm n mainstream schl funding frmula include: Allwable frmula factrs are reduced frm 37 previusly t 12 Measurement f frmula factrs are prescribed by the Department fr Educatin (DfE) Pupils with high needs are funded via the Place-plus methdlgy. Schls are expected t pay fr the first 10K (referred t as place funding) and the Lcal Authrity t pay fr the balancing figure based n actual pupil mvements (referred t as tp up funding) 2.2 Changes required by the Schl Funding Refrm n funding fr special schls include: Funding special schl pupils using Place-plus methdlgy. The place led funding is 10K per place and is fixed fr a financial year. The plus funding is frm lcal authrities, being the balancing figure based n pupil s assessed needs (referred t as tp up funding). The pupil led tp-up funding fllws pupil real time mvements Other lcal authrities can cmmissin places with Cventry special schls directly 2.3 These are Department fr Educatin directed changes with little lcal flexibility. Where there are chices, e.g. arund delegatin factrs, ptins were prvided t the Schls Frum Wrking Grup fr cnsideratin and prpsals were drawn n the recmmendatins frm the Wrking Grup. Final prpsals were cnsulted with all stakehlders via the Fair Funding Cnsultatin 2013/14 and were apprved by Cabinet in Oct 2012 and implemented fr 2013/ Results f cnsultatin undertaken 3.1 A cnsultatin n the required changes by the Refrm had been carried ut thrugh the 2013/14 Fair Funding Cnsultatin with Head Teachers/Principals f maintained and Academy schls, Chairs f Gverning Bdies, Trades Unins, Dicesan authrities, the Cventry Gvernrs Organisatin, members f the Cventry Schls Frum. The changes have been apprved by Cabinet and implemented fr 2013/14. 3

4 3.2 N cnsultatin is undertaken n this reprt as the purpse f the reprt is t update the Cabinet Member Educatin n the impact f the Schl Funding Refrm. There is n decisin required fr this reprt. 4. Timetable fr implementing this decisin 4.1 N decisin is required frm this reprt. 5. Cmments frm Directr f Finance and Legal Services 5.1 Financial implicatins Overall city level schl funding 2013/14 Natinally the DSG has been kept at the same cash per pupil level as 2010/11 fr the current cmprehensive spending review perid. The 2013/14 schl funding psitin fr Cventry schls is slightly better than the natinal psitin with schls seeing small investments after funding the budgeted inflatinary csts pressures. This lcal psitin is largely due t cntinued increase in verall pupil numbers in the city althugh this is a balancing picture f a grwing primary phase ppulatin and a declining secndary phase ppulatin with the grwth significantly utweighing the decrease. The delegatin f previusly centrally retained DSG t schls in 2013/14 als cntributed t the 2013/14 schl funding psitin. The ttal amunt delegated t schls frm centrally retained DSG is arund 1.2m net f the funding returned t the LA. The Pupil Premium Grant (PPG) funding fr 2013/14 is set t increase significantly. The ttal prjected amunt f PPG fr 2013/14 is 13.3m (an increase f apprx. 4.1m cmpared with 2012/13) fr Cventry schls. Majrity f the PPG is distributed via deprivatin factr (i.e. the Ever 6 Free Schl Meal factr) therefre schls with few FSM eligible pupils will see little increase in this funding whilst schls with high number f FSM eligible pupils will see a significant increase. The individual schl level funding psitin varies depending n pupil numbers and histrical budget allcatin psitins. Appendix 1 is a summary f the schl 2013/14 budget psitin cmpared with 2012/13. This excludes PPG funding. In terms f mainstream schls: The impact f the resultant changes f the Schl Funding Refrm has been masked by varius ther factrs, e.g. pupil number changes, lcal funding settlement psitin, delegatin f previusly centrally retained Dedicated Schls Grant etc. Althugh it is difficult t separate the impact f the Schl Funding Refrm cmpletely the general fllwing trends are identified: Mre funding is pupil led therefre generally schls that are smaller r experience significant pupil number reductin will be wrse ff under the new frmula There is very little flexibility t fund schl specific characteristics therefre schls wh had previusly received higher levels f funding fr specific circumstances (e.g. Advanced Skill Teachers, frmer mainstreamed grants, higher number f teachers n Upper Pay Scales etc.) will lse ut under the new frmula 4

5 Significant funding fluctuatins are als caused by the DfE restrictins n factr measurement and banding. Fr example, we cntinue t use the Incme Deprivatin Affecting Children s Index (IDACI) factr, but DfE have impsed sme restrictins. This means there are a number f less deprived schls that n lnger receive funding (if they measure belw 0.2). The highest band captures the ppulatin f pupils with IDACI scre abve 0.6 but fails t cnsider the degree f deprivatin. This means pupils with 0.61 IDACI will receive the same funding as pupil with 0.8 IDACI. This is different t hw we were using IDACI previusly, and therefre the least and mst deprived schls have lst sme funding and schls in the middle have gained. N ther prtectin r transitinal arrangements allwed apart frm the Minimum Funding Guarantee (MFG). Previusly there was a budget prtectin mechanism, which prvided additinal funding fr 1 year nly where schls had lst significant funding due t pupil number reductins. Table 1 and Table 2 in the Appendix A demnstrate that significant funding was redistributed thrugh the MFG. Whilst MFG is a cash per pupil prtectin and therefre has its limitatins, there are schls that were prtected frm significant funding lsses by this mechanism. In terms f the special schls: The Place-plus funding apprach means the pupil led element f the funding needs t reflect in-year pupil mvements therefre the schl level impact will depend n the pupil mvements during the financial year. T supprt special schls t manage their budgets in the first year f implementing the Place-plus methdlgy, the Lcal Authrity has aimed at prviding as much funding stability as pssible thrugh the calculatin f the tp-up rates, which means all pupils in each schl have the same tp-up rate and the take-up trend f each schl has als been taken int cnsideratin in the tp-up rate calculatin. The directin f travel fr funding special schl remains a banded framewrk that is linked t individual pupil needs. The Place-plus funding apprach fr high needs pupils als changes the cmmissining relatinship between schls and ther lcal authrities, i.e. ther lcal authrities will cmmissin places with schls directly. This will add planning pressures t hme lcal authrities althugh special schls have agreed fr the Lcal Authrity t take an active rle in the dealing with ther lcal authrities in 2013/14 financial year. On tp f planning pressure there is als ptentially significant financial implicatin. The Lcal Authrity may be put int the psitin f having t place Cventry pupils in ut f city placements due t the lack f places in hme schls, which will nt nly cst mre but will als have transprt csts implicatins. 5.2 Legal implicatins Nne 6. Other implicatins 6.1 Hw will this cntribute t achievement f the Cuncil's key bjectives / crprate pririties (crprate plan/screcard) / rganisatinal blueprint / Lcal Area Agreement (r Cventry Sustainable Cmmunity Strategy)? 5

6 6.2 Hw is risk being managed? The Lcal Authrity Schl Finance Officers will wrk clsely with schls t supprt them in managing the funding changes and setting a balanced budget. Any ptential deficit r lng term sustainability issues will be reprted back t the Lcal Authrity as early as pssible t enable plans t be put int place t manage the situatin. 6.3 What is the impact n the rganisatin? Schls may nt able t balance budgets. If as a cnsequence f implementing sme f the prpsals there are surplus staff in individual schls then full cnsultatin will be undertaken with bth staff and the trade unins in accrdance with city cuncil plicies. 6.4 Equalities / EIA There is limited flexibility in the Schl Funding Refrm that the Lcal Authrity can use t reflect the needs f all the pupils in their lcal funding frmula. The prpsals are largely driven by existing factrs in current fair funding frmula and reflect that additinal funding is targeted twards scial deprivatin and pupils frm ethnic minrity backgrund in the current frmula. As part f the DfE s new annuncement in June, lcal authrities are allwed t use a mbility factr t recgnise the additinal csts assciated with increasing the achievement f transient pupils. Evidence suggests sme Cventry schls have big transience issues therefre the wrking grup supprted the inclusin f Mbility factr fr 2013/14. The nly relevant factr that the Lcal Authrity des nt prpse t use is the Lked After Children (LAC) factr. This is nt an existing factr and the needs f this grup f children are being mnitred and managed by the Lked After Children Educatin Service. There is als additinal funding targeted at LAC in the pupil premium grant. Therefre the prpsal is nt t use this factr fr 2013/14 but keep this under review. 6.5 Implicatins fr (r impact n) the envirnment The peratin f the high needs Place-plus methdlgy may lead t higher transprt csts if all special schls are full by taking pupils frm ther lcal authrities. 6.6 Implicatins fr partner rganisatins? Nne. 6

7 Reprt authr(s): Name and jb title: Teng Zhang, Lead Accuntant Directrate: Children, Learning and Yung Peple Tel and cntact: Enquiries shuld be directed t the abve persn. Cntributr/apprver name Cntributrs: David Haley Title Assistant Directr (Educatin and Learning) Directrate r rganisatin Children, Learning and Yung Peple Rachael Sugars Finance Manager Children, Learning and Yung Peple Date dc sent ut Date respnse received r apprved 15/03/13 18/03/13 15/03/13 18/03/13 Elaine Atkins Slicitr Finance & Legal 15/03/13 18/03/13 Michelle Salmn Gvernance Custmer and 15/03/13 18/03/13 Services Officer Wrkfrce Neelesh Sutaria Human Resurces Manager Services Children, Learning and Yung Peple Names f apprvers fr submissin: (fficers and members) Finance: Barry Hastie Assistant Directr Finance and Legal Services Legal: Elaine Atkins Slicitr Finance and Legal Services Directr: Clin Green Directr Children, Learning and Yung Peple Member: Cuncillr Kershaw Cabinet Member (Educatin) 15/03/13 27/03/13 15/03/13 18/03/13 15/03/13 18/03/13 15/03/13 20/03/13 15/03/13 20/03/13 This reprt is published n the cuncil's website: 7

8 Appendix A: Analysis f the Schl Funding Changes between 2012/13 and 2013/14 The table 1 and table 2 belw summarise the schl budget cmparisn between the 2012/13 1 financial year and 2013/14 financial year fr the primary and secndary phase respectively. Table 1: Primary Schl Funding Changes between 2012/13 and 2013/14 Primary Range f Change N f schl cash change in each range befre MFG f which N f sch belw MFG funding level* Schl level impact (cash level) aft MFG N f schl N f Schl n MFG abve 100K K t 100K K t 50K K t 30K K t 20K t 10K K t -10K K t -20K K t -30K K t -50K K t -100K Over -100K Ttal Maximum Gain 333, ,744 Maximum lss (158,167) (22,164) Table 1 abve demnstrates that in the primary phase: Majrity f schls had received funding increase after the Minimum Funding Guarantee (MFG). This is mainly a reflectin f significant pupil number increase in the primary phase (968 additinal pupils frm Oct 11 t Oct 12, 3.7% increase). There are 17 schls n MFG, ut f which 14 had budget increase and 3 had budget decrease after the MFG. The same schl had the maximum gain befre and after MFG ( 334K befre and 277K after MFG). This is mainly due t significant pupil number increase in the schl (61 additinal pupils, a 17% increase in Oct 12 cmpared with Oct 11). Schl with the maximum lss befre MFG ( 158K) is nt the schl with the maximum lss after MFG ( 22K). The schl with maximum lss befre MFG histrically had received high level f funding thrugh frmer grants that were mainstreamed int the DSG. These funding was delegated based n pupil numbers in 2013/14, which had led t funding being diverted away frm the schl. Under the EFA prescribed IDACI banding system, deprivatin funding was diverted away frm affluent schl and deprived schl, this schl has cmparatively high level f deprivatin and were adversely affected by this change. This schl had als received additinal 97K funding via MFG in 2012/13, which represented /13 budget shares are adjusted fr High Needs Place-plus De-delegatin and Grwth Fund t ensure they are cmparable with 2013/14 schl budget shares. 8

9 a large prprtin f the lss. Hwever the 2013/14 MFG had put 215K additinal funding back int this schl, resulting in an verall budget increase f 57K cmpared with 2012/13. This schl is als due t receive significant amunt f Pupil Premium Grant increase. The schl with the maximum cash lss f 22K had decrease in pupil numbers (by 6 pupils), which is the main reasn fr the budget reductin. Table 2 belw demnstrates that in the secndary phase: Table 2: Secndary Schl Funding Changes between 2012/13 and 2013/14 Secndary Range f Change N f schl cash change in each range befre MFG f which N f sch belw MFG funding level* Schl level impact (cash level) aft MFG N f Schl n MFG N f schl abve 100K K t 100K K t 50K K t 30K K t 20K t 10K K t -10K K t -20K K t -30K K t -50K K t -100K Over -100K Ttal maximum Gain 333, ,864 Maximum lss (879,738) (438,988) Significant gains and lsses are bserved in the secndary phase. This is the impact frm bth the pupil number changes and the Schl Funding Refrm fair funding frmula changes. Overall pupil number in secndary phase reduced by 110 (a 0.6% reductin) with sme schls pupil numbers increased significantly and sme schls pupil numbers decreased significantly. 13 (68%) ut f 19 (including academies) secndary schls received funding increase befre MFG and 12 (63%) f schls experienced funding increase after MFG. There are 5 schls n MFG and 3 f them had significant cash increase and 2 f them had significant cash decrease. The maximum gain befre the MFG is 334K and after the MFG is 299K and they are nt the same schls. The schl with the maximum gain befre MFG had increased pupil number (mderate increase f 5 pupils) and the main reasn fr the budget increase is the Schl Funding Refrm related frmula changes. E.g. funding previusly targeted at schl specific characteristics is nw delegated via pupil numbers and this schl had benefited frm this change significantly. This schl had an average deprivatin prfile and it had als benefited thrugh the IDACI banding system prescribed by the EFA/DfE. Secndary schl Special Educatin Needs budgets were delegated via prir attainment factr 9

10 (previusly via deprivatin factr) and the schl had gained significantly frm this change t. The budget increase f the schl with the maximum gain after MFG is mainly caused by significant pupil number increase. The schl had 59 additinal pupils between Oct 11 and Oct 12, the largest secndary pupil increase. The MFG als put 89K additinal funding int the schl, which had resulted in an verall funding increase f 299K. The schl with the maximum lss befre and after MFG is the same schl. The substantial funding lss is caused by bth significant pupil number reductin at the schl and the Schl Funding Refrm frmula changes. The schl s pupil number reduced by 56 (10% f the verall pupil number f the schl). The schl had received significant level f funding based n its specific characteristics previusly, e.g. 83K funding vacant places funding, 165K frmer Teacher s Pay Grant funding, 168K budget prtectin factr funding, and high level f frmer mainstreamed grant ( 208K) etc. All these budgets were allcated via pupil numbers fr 2013/14. This had led t significant funding reductin fr the schl. The schl had als received significant transitinal prtectin funding in relatin t the change in the delegatin f deprivatin budgets in 2012/13. The Lcal Authrity can n lnger perate lcal prtectin arrangements under the Schl Funding Refrm therefre the schl had lst the prtectin funding. MFG had put 470K back int the schl and this had reduced the schl s lss t 439K. 10

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