To consider 2016-17 DSG expenditure proposals and approve central expenditure budgets.

The Forum considered RBWM’s 2016-17 expenditure plans for services funded by the schools, high needs and early years blocks of the Dedicated Schools Grant (DSG) and other grants. The Forum was asked to approve a number of central expenditure budgets where required under regulation.

As reported at the last meeting, the DSG settlement was £104.842m, an increase of £1.234m on the previous year as a result of the increase in pre-16 pupil numbers. Table 2 gave details of the breakdown of the total settlement. In the schools block; £39m related to the Academies delegated budget which would be topsliced from the local authority’s DSG allocation. This would change during the year as more schools converted to academy. Table 3 illustrated the total funding available (£113.7m) for the schools budget including high needs, early years and the post-16 grant. Pupil premium allocations were only included for early years (£72,000).

Table 4 illustrated the proposed expenditure for 16/17. Schools block planned expenditure would reduce to 78.9% (from 79.4% in 15/16) to cover an increase in budget required for high needs to 14.8%. Changes were detailed in section 3 of the report and the appendix. For the schools block the funding delegated through the pre 16 formula had increased by £770,000. At the same time post-16 funding had reduced by £563,000. There was an additional proposal to reduce funding for the growth fund by £278,000. Planned expenditure on high needs would increase by £730k, funded by  increased funding for high needs (£316,000) announced in the December 2015 settlement, and a transfer of £414,000 from early years and the schools block.

It was confirmed following a question from the Chairman that the changes were for noting, subject to approvals later in the agenda. Expenditure from the high needs block (e.g. Manor Green) did not require Schools Forum approval.

The Chairman commented that the use of sixth form figures that were 18 months out of date to allocate post 16 funding was odd given the amount of money involved. He suggested feedback to highlight that the latest figures should be used. The Finance Partner explained that all post-16 funding received by the LA from the EFA went directly to schools so there was no impact on the budget. The reduction in the post-16 budget was the result of falling numbers. The main pressure was in high needs, from continued growth at Manor Green and Forest Bridge. There had been some re-allocation to try to fund this as local provision was now available but this had not come through as much as had been expected.

Table 5 illustrated spending by block. Authorities are able to move funding between blocks and many did so. In 15/16 planned schools block expenditure had totalled £89.8m. The council’s schools block allocation was£90.6m therefore the unspent £780,000 had funded additional expenditure in high needs. Table 6 illustrated proposed allocations for 2016/17. The plan was to borrow a larger amount from the schools block than in previous years to fund high needs. Table 7 demonstrated that much high needs funding was used to fund services in mainstream schools.

The Chairman commented that all other aspects of funding had to be backed up by value for money statements. It was difficult to assess value for money with high needs spending. A transparent discussion was needed, particularly if high needs funding was increasing. Isabel Cooke commented that many schools managed behaviour until they were unable to any more. The education of the average child was compromised year on year because of pressure on schools; a group of children received education far in excess of the average child. The Chairman highlighted that the key question was whether interventions made a clear impact or not.

It was noted that increased high needs expenditure was a common theme for most local authorities. The Finance Partner explained that whereas school funding increased based on pupil numbers, high needs funding was based on historical spend. The Head of Schools and Educational Services commented that it was a common view among borough headteachers that there was an increasing number of children with additional needs. At the top end of the spectrum children’s needs were becoming more complex and needed new interventions. It was noted that 25% of the funding was spent on high needs in a mainstream setting. The Head of Schools and Educational Services referred to a government consultation of 30 schools on the top up for primary children with autism. The levels provided ranged from £2,000 to £25,000 for the same pupil description. The Schools Forum could scrutinise whether the balance was correct for borough schools.

Heather Clapp commented that as a child got older their needs often become more complex. If interventions are not made at an appropriate early stage then the situation just became worse later on. It was not the case that one size would fit all. Chris Tomes referred to a recent Westminster Briefing he had attended. It was stated that the issue of differing levels of funding for high needs was a significant issue and it would be addressed through the national funding formula. It would be useful to know where RBWM stood in comparison to other local authorities.

The Chairman commented that it would be important for the Forum to respond to the consultation, which closed on 17 April 2016. It was noted that this consultation covered core funding and high needs; early years would be part of a later consultation expected in May 2016. All feedback would go into a second round of consultation to include proposals, with the aim of establishing a national funding formula that would determine LA DSG allocations for 17/18. The Finance Partner commented that it was being referred to as a ‘soft’ formula as LAs would continue to have flexibility in their local formulae to allocate funding to schools. A local funding formula would still be required for the next two years. By 2019 school funding allocations would be determined centrally, ‘the hard formula’, and therefore the role of the Forum would change. One of the main changes for 2017-18 would be an additional funding block for central schools to fund strategic functions such as admissions. A second stage of consultation would look at the specific funding rates to be used in the national formula. Chris Tomes commented that at the Westminster Briefing it was stated by the DfE that DSG would be replaced by a flat rate approach for the next four years. Representatives from the academies then agreed that as there had been a real term cut of 9-12% it was important to get ahead of this. There had been some discussion of protection in the first year.

Heidi Swidenbank left the meeting at 3.12pm.

The Chairman suggested a separate meeting be set up to discuss the wider issues. He proposed that approval of pre-16 pupil growth be set to one side.

RESOLVED UNANIMOUSLY: That Schools Forum:

i)             Agree the expenditure proposals outline in the paper

ii)            Formally approve the planned schools and early years central expenditure budgets set out in table 8, 9 and 10 (paras 4.3 and 4.6), as required under School Finance Regulations.