The Principal Finance Officer (schools) will present a report, Document GK, which asks the Forum to consider the consultation document, which outlines the proposals for the formulae to be used to calculate budgets for Primary and Secondary schools (and academies) for the 2017/18 financial year and the criteria that will form the basis of the allocation of additional funding to schools (and academies where appropriate) from DSG centrally managed funds. If agreed, the responses from the consultation will be presented for consideration to the 19 October meeting.

Recommended –

The Schools Forum is asked to agree that the consultation (Document GK Appendix 1) is published.

(Sarah North – 01274 434173)

The Principal Finance Officer (schools) presented a report, Document GK, which asked the Forum to consider the consultation document, which outlines the proposals for the formulae to be used to calculate budgets for Primary and Secondary schools (and academies) for the 2017/18 financial year and the criteria that will form the basis of the allocation of additional funding to schools (and academies where appropriate) from DSG centrally managed funds.

The Principal Finance Officer summarised the proposals included in the document Appendix 1, stressing that no structural changes to the primary and secondary formula are proposed other than the changes in data use required by the DfE. She explained the amendment to the IDACI bands and that the weighting within the secondary low attainment factor would be adjusted by the DfE in the dataset we will receive in December.

The Principal Finance Officer stressed that a key purpose of the consultation document, and the modelling attached with this, is to give schools and academies early warning of a reduction in formula funding in 2017/18 that is likely to come from the Forum’s discussions on how to meet the growth in High Needs Block cost. She stated that these key messages had been presented to primary business managers last week and will be presented to secondary business managers.

The Principal Finance Office also drew Member’s attention to the proposal for the clarification of the criteria to be used to calculate and allocate in year growth funding to secondary schools and academies, as growth in this sector is not quite as straightforward as has been in the phase.

In the discussion that followed Members asked the following questions and made the following comments:

• Is the 1.5% shown in the document a reduction on some or all formula factors? It was clarified that this was a reduction only in the pupil-led factors. It was agreed that this will be stated more explicitly in the consultation document.
• Is the assumption, with the cost assessment built into the proposed criteria, that growth funding will not usually be allocated to the secondary phase? The Principal Finance Officer clarified that this won’t be the assumption. We would actually assume that growth funding would be allocated, but we feel that it is reasonable, given that how a secondary school can adjust to handle changes in pupil numbers is more complicated than in a primary school, that an assessment is carried out to ensure than an additional allocation from the DSG represents value for money.
• Will secondary growth funding be limited to growth in year 7, not for growth in other year groups during the year? It was confirmed that growth funding would only be applied for year 7 growth within the normal admissions round, where this growth comes from the request by the Local Authority for the school to increase its PAN to meet basic need sufficiency. It would not fund pupils admitted on appeal.
• What will the cost assessment look like within the secondary growth fund criteria? The Business Advisor (Schools) stated that this would be a budget conversation with the school. A Member emphasised that this conversation would need to take place at the point the Authority consults with the school about increasing its PAN. The Business Advisor (Schools) agreed that this would be the case.
• What are the positions of school carry forward balances? How challenging will it be for a reduction of 1.5% to be managed by individual schools? The Business Advisor stated that the picture of carry forward balances becomes clearer from quarter 2 budget monitoring returns in October. Some schools will be better placed than others to manage this reduction. He also emphasised that the figure of 1.5% has been used in the consultation document as this is a way of getting a clear message out to schools as simply as possible. He referred to discussion earlier in the meeting regarding the possibility of taking a contribution at a value greater than 1.5% and also that, on current numbers, 1.5% will not be sufficient to balance the DSG allocation in 2017/18 (Document GG shows that there is still a £1.2m budget gap). The Principal Finance Officer explained that we are also providing schools with a view of their worst case scenario in 2017/18 (the point at which the school is funded on the DfE’s Minimum Funding Guarantee). The HCSS Budget Software will also enable schools to model the combined impact of income reductions and expenditure increases.
• This cumulative impact of income reductions, including reductions in early years and post 16, and expenditure increases, needs to be analysed.
• A Member commented that a reduction of 1.5% is probably just the ‘tip of the iceberg’ where we look at the costs that have already been absorbed by schools over the last 2 years and as we look forward to the implications of National Funding Formula and the further growth of costs in schools.

Resolved –

That the consultation document, as set out in Document GK, but incorporating the amendments agreed by Members that are recorded in the minutes of the meeting, be published.

Action:           Principal Finance Officer (Schools)