2016-17 School Budgets Consultation 15 th September 2015.

2016-17 School BudgetsConsultation

15th September 2015

Agenda

• Introduction• School Budgets Overview• Discussion around proposals

School Budget 2016-17 Overview• The DfE arrangements on 2016-17 schools funding were

announced in July 2015

• What we know from Government announcements is that:

1. DSG funding is ‘protected’ i.e. flat cash funding per school pupil; and

2. Additional funding will be passported to reflect increases in pupil numbers between October 2014 and October 2015.

• NCC have joined the f40 group, which represents the 40 lowest funded authorities.

School Cost Pressures Overview• However there are real terms costs pressures, which are

unfunded such as:

1. Increased Employer contributions to the Teachers pension scheme from April 15 +2.4% (to 16.5%)

2. Teachers and Local Government pay awards

3. General inflation/price increases

4. Employers National Insurance increase of up to 3.7% (to 13.8%) from April 2016

• At the same time demands on schools are increasing.

School Pressures Overview• Additional one-off funding for schools will cease in 2016-17.

• From 2017-18 schools will experience the impact of the: • One-off funding ceasing; and

• Cost pressures.

• The Institute of Fiscal Studies* recently stated that over a 5 year period, unless any funding changes were made, schools were likely to experience real terms cuts in spending per pupil of between 9% and 12%.

• We need to plan for this collectively and as individual schools.

(Note - * - Source - presentation at Fair Funding Conference - Bristol – June 2015)

2016-17 Consultation• Work has been undertaken with a Schools Forum working

group and Schools Forum to identify areas where it is felt changes in funding for 2016-17 should be considered.

2016-17 Consultation• The DfE will provide updated data on each school in

December 2015 for final school budget modelling.

• It should be noted that the minimum funding guarantee (MFG)is being continued within the national arrangements for 2016-17:

• The DfE have stated that MFG will be continued in subsequent years but have not stated the percentage.

Minus 1.5% per pupil compared to the previous year

Q1) Primary to Secondary Funding Ratio

• As previously discussed with Schools Forum the Northants ratio at 1:1.34 (excluding any one-off funding) is above the national average ratio of 1:1.28.

• An exercise has also been undertaken comparing the ratio to those in our statistical neighbours. The average for this is also 1:1.28 and the information on this is shown in the following table.

Q1) Primary to Secondary Funding Ratio• The Northants ratio of 1:1.34 compares to our statistical neighbours as below

Statistical Neighbour Ratio

Derby 1.31Derbyshire* 1.29

Gloucestershire* 1.22

Kent* 1.27

Lancashire* 1.28

Nottingham 1.34Nottinghamshire* 1.27

Staffordshire* 1.24Suffolk* 1.26

Warwickshire* 1.32Worcestershire* 1.26

Essex* 1.31

Average 1.28

* Statistical Neighbours as per CIPFA nearest neighbour tool 2014

Q1) Primary to Secondary Funding Ratio

• In order to move to the national average it would require £4m of funding to be moved from Secondary to Primary schools funding.

• Schools Forum felt that this could best take place over 3 years, from 2016-17, with 3 alternative options in terms of how this could be achieved. These are shown on the subsequent slides.

OPTION 1Reduction of Secondary AWPU put into Primary AWPU

Move ratio to 1 primary £ to 1.28 secondary £s over 3 years

Year 1 2016-17

Year 22017-18

Year32018-19

Reduction in Secondary AWPU -£35.6 -£35.6 -£35.6

Increase in Primary AWPU +21.72 +21.72 +21.72

Number of schools with reduced budgetsMaximum Budget Reduction

38-£48,096

38-£48,096

38-£48,096

Number of schools with increased budgetsMaximum Budget Increase

193£12,598

195£12,598

197£12,598

OPTION 2Reduction of Secondary Lump Sum over three years

Move ratio to 1 primary £ to 1.28 secondary £s within three years

Year 12016-17

Year 22017-18

Year 32018-19

Reduction in Secondary Lump Sum -£31,667 -£31,667 -£31,667

Increase in Primary AWPU +£25 +£25 +£25

Number of schools with reduced budgetsMaximum Budget Reduction

40-£31,667

40-£31,667

40-£31,667

Number of schools with increased budgetsMaximum Budget Increase

243£14,500

245£14,500

247£14,500

OPTION 3Reduce Secondary Lump Sum by £10k in year 1 and AWPU over 3 years

Move ratio to 1 primary £ to 1.28 secondary £s within three years

Year 12016-17

Year 22017-18

Year 32018-19

Reduction in Secondary AWPU -£32 -£32 -£32

Reduction in Secondary Lump Sum -£10,000 £0 £0

Increase in Primary AWPU +£26 +£26 +£26

Number of schools with reduced budgetsMaximum Budget Reduction

40-£53,232

40-£43,232

40-£43,232

Number of schools with increased budgetsMaximum Budget Increase

195£15,080

196£15,080

198£15,080

Models 1-3 Largest ChangesPounds and Percentage min and max changes in Individual Budget

Share (formula budget) for 16-17 budget modelling

Model Max gain £* Max gain %* Max loss £* Max loss %*

1 – Sec AWPU 37,787 2.1 (144,273) (2.4)

2 – Sec lump sum 43,500 2.5 (95,000) (10.4)

3 – Sec lump sum (£10k) and balance AWPU

45,240 2.6 (139,696) (2.6)

* Total gain/loss across the 3 years

QUESTIONS, COMMENTS AND OBSERVATIONS

Q2) Cap Deprivation Funding

• Schools Forum have previously acknowledged that the Northants element of funding within the 2015-16 formula for Deprivation (£58.3 million/13.98%) is well above the national average of 8.44% of schools formula funding.

• The split of the overall Northants 13.98% by sector is 13.31% Primary and 14.79% Secondary/All Through schools.

• Deprivation is a DfE mandatory factor in LAs formula.

Q2) Cap Deprivation Funding

• Although a comparatively high percentage of the schools funding formula is distributed via the deprivation factor there is limited evidence that this is having a significant impact in all schools on progress and attainment of economically disadvantaged pupils. The gap in outcomes at KS2 and KS4 between vulnerable pupils and all pupils remains much higher than local, statistical neighbour and national averages and is not closing.

Q2) Cap Deprivation Funding • It was therefore recommended the funding for this area

should as a minimum be capped in 2016-17 (i.e. not increase from the 2015-16 total amount of funding).

• The effect of this would be that if the FSMEver6 numbers used in the 2016-17 deprivation formula increase there would need to be a reduction in the 2015-16 deprivation rates of £2,416.03 Primary and £3,318.22 Secondary

• If the FSMEver6 numbers increase at a similar rate to previous years this would mean :-

• Primary - £130 reduction to £2,286 per FSMEver6 pupil

• Secondary - £158 reduction to £3,161 per FSMEver6 pupil

QUESTIONS, COMMENTS AND OBSERVATIONS

Q3) Reduce AWPU funding to move to the High Needs AP budget

• The numbers and costs of permanent exclusions in both the Primary and Secondary sectors are increasing at a significant rate creating an estimated £1m pressure in 2016-17. The estimated split of the increased cost is £210k Primary and £790k Secondary.

• DfE guidance does not allow the existing Northants clawback rates of £3k plus AWPU per excluded pupil to be increased.

• It is therefore proposed to reduce the 2016-17 AWPU rates by £3.35 Primary and £21.20 Secondary to allow £1million to be moved from the Schools to High Needs blocks to meet this increased cost.

Q3) Reduce AWPU funding to move to the High Needs AP budget

• A number of actions have been agreed with Schools Forum to support schools in this area.

• In the Autumn term schools will be issued with a pack giving information on the support available to support pupils at risk of exclusion

• School clusters will be able to access a DSG fund (on a matched funding basis) in 2015-16 and 2016-17 to enable them to strategically commission services to reduce the need for permanent exclusion.

QUESTIONS, COMMENTS AND OBSERVATIONS

Q4) Split site funding• In 2015-16 8 schools received total funding of £463k via this

formula factor

Reference No. School Name Split Site Funding

9283048 Oundle C.E. Primary £11,667

9285205 Collingtree CE Primary £50,000

9282177 Abington Vale Primary £75,000

9282209 Ecton Brook Primary £50,000

9285208 Woodnewton £11,667

9284014 Wrenn £75,000

9284041 Elizabeth Woodville £115,000

9284550 Magdalen College £75,000

TOTAL 463,333

Q4) Split site funding• A number of these schools have asked for this to be

reviewed as they feel it does not provide sufficient funding for operating a second site.

• This factor currently provides additional funding of up to £115k for Secondary and £75k Primary.

• Only one school, Elizabeth Woodville, operates on sites greater than 5 miles apart. In this type of instance should the school receive through the split site formula factor up to the agreed lump sum amount for the year?

• Should other increases be applied in the funding for other split site schools?

QUESTIONS, COMMENTS AND OBSERVATIONS

Q5) Pupil Growth Fund

• The Pupil Growth fund is outside of the funding formula and supports basic need increases in schools numbers. This is applied where schools are requested to increase their pupil admission number (PAN) by the local authority or where a new school is being established. This requires certain thresholds to be met and is applied where the numbers are not factored into the schools formula funding.

•The pupil growth fund rates of funding have not been updated since the establishment of the fund.

Q5) Pupil Growth Fund

• The base budget is £1.48m

• Note - This excludes the £0.5m contingency held to cover future pressures on this budget.

• The projected commitments based on the existing rates are £1.5m for both 2015-16 and 2016-17.

• We are aware the funding rates have not increased since the Fund was created in 2013-14.

• We therefore feel these rates should be increased to reflect inflationary increases in 2016-17.

QUESTIONS, COMMENTS AND OBSERVATIONS

Q6) Set up and diseconomy costs• The DfE guidance materials on pupil growth funding includes

the following:

• “Support schools which are required to provide extra places in order to meet basic need within the authority, including pre-opening, diseconomy and reorganisation costs.

• Meet the costs of new schools. These will include the lead-in costs e.g. to fund the appointment of staff and the purchase of any goods or services necessary in order to admit pupils. It will also include post start-up costs and any diseconomy of scale costs. These pre and post start-up costs should be provided for academies where they are created to meet basic need.”

Q6) Set up and diseconomy costs

• The pre opening and diseconomy costs of the 2 new schools opening in September 2015 – Hayfield Cross Kettering and Rushden Primary are already being met from the overall Pupil Growth budget so the inclusion of these type of costs in the future should not create a budget pressure.

• As there is a DfE requirement to meet set up and diseconomy costs in new schools (excluding Free schools the EFA are funding) reference to these costs and funding should be included in the Pupil Growth fund criteria for 2016-17.

QUESTIONS, COMMENTS AND OBSERVATIONS

Summary• Increasing pressures on schools and the DSG at a time of

constrained funding.

• The National Minimum Funding Guarantee (MFG) limits the maximum per pupil funding reduction to -1.5% in 2016-17 with any changes proposed.

• We want to hear your views!

• Online responses to the consultation are required from schools by 1st October 2015

THANK YOU FOR TAKING THE TIME TO ATTEND