The Business Advisor (Schools) will present a report, Document HA, which updates members on the position of the Dedicated Schools Grant for the 2017/18 financial year. This is a main reference document for this meeting. This report also includes further exploration of the ‘options’, as agreed at the last Forum meeting.

Resolved –

The Forum is asked to note the information provided. This will inform decisions and recommendations to be taken under agenda item 11.

 (Andrew Redding – 01274 432678)

The Business Advisor (Schools) presented the report, Document HA, to the 11 January meeting, which updated members on the position of the Dedicated Schools Grant for the 2017/18 financial year. He explained that the critical aspect of the School Forum’s discussion will be how the £7.02m pressure within the High Needs Block in 2017/18 is to be resolved. He explained how the £7.02m pressure is created and why this is different from the £6.8m figure presented to the December meeting.

The Chair emphasised to Members that the Forum must recommend a balanced DSG to the Council. Within this, the Forum must be careful to understand the value of reserve being deployed in 2017/18.

The Business Advisor, using an options document tabled on the day on 11 January meeting, explained the range of options that have been considered and are being put forward for the management of the £7.02m pressure. He explained that, of the 6 main options, 3 of these have been discounted, leaving 3 for consideration (referred to as options 2, 3 and 4):

·         Option 2: Transfer the £2.1m headroom from the Schools to the High Needs Block, taking £4.9m of spending out of the High Needs Block.

·         Option 3: Transfer a total of £4.5m from the Schools to the High Needs Block (£2.1m headroom; £2.4m explicit contribution), taking £2.5m of spending out of the High Needs Block.

·         Option 4: Transfer a greater sum e.g. £5.6m from the Schools to the High Needs Block (£2.1m headroom; £2.4m explicit contribution; £1.1m further contribution), taking £1.4m of spending out of the High Needs Block.

It was explained that the Forum must consider the impact of these options and also the ‘achievability’ of savings across both the short and longer terms. Much of the Forum’s discussion focused on a) these options in the context of national funding formula in the future and b) the immediate additional pressure that an ‘explicit’ formula funding reduction would produce within delegated budgets. The content of a ‘preferred’ option 4 model became more defined following the Forum’s initial discussion. Following the Forum’s request, an additional report was presented on 18 January, which set out a fully worked through option 4 method for balancing the 2017/18 DSG. A further additional report was also presented to the 18 January meeting, which provided a more detailed view of the potential impact on the PRUs (within option 4) of a reduction in the value of direct ranges funding for pupils without EHCPs.

On 11 January, the Business Advisor explained how the confirmed 2017/18 DSG Schools Block position is different from what was previously estimated due to the changes in data that have been recorded by schools in the October 2016 census. The reduction in the FSM% in the primary phase was particularly highlighted. In response to this, Members asked for further analysis to be presented to the 18 January meeting. Following consideration of this, Members asked for an analysis of the difference in FSM% between reception and year 6 to be presented to the March meeting.

The Chair explained that this change in Census data, and the creation of £2.1m of headroom within the Schools Block, alongside the information we now have about National Funding Formula, alters our view of the options for the contribution from the Schools Block to the £7.02m High Needs Block pressure in 2017/18; moving away from a blanket 1.5% formula funding reduction. The Business Advisor explained this further with reference to Document HD and the options document tabled on 11 January.

The main comments made by Forum Members and the main questions asked on 11 January are recorded below:

• How will schools feel the financial benefit from the creation of new high needs places (when delegated funding will reduce but children with SEND may still be in the mainstream school)? Schools are facing massive financial pressure. A discussion followed from this question on how transition will take place and how children will be placed in new / expanded provisions from a variety of sources, including transferred from mainstream schools. Input was provided by the Chair and the Authority’s Strategic SEN Manager.
• Which of the options fully resolves the £7.02m DSG pressure? The Business Advisor explained that it is only either options 3 or 4 that resolve this, and only option 4 resolves this as well as enabling the financing of new high needs places.
• Will the Schools Block continue in the future to be required to contribute to the High Needs Block? The Business Advisor explained that, on current analysis, 2017/18 would be the last year in which a contribution could be taken from the Schools Block. Although authorities may be permitted to transfer monies under National Funding Formula in the future, because Bradford is a loser in the Schools Block and the majority of schools hit the floor protections, it is highly unlikely that we will have any headroom to transfer. In thinking about a transfer in 2017/18, we also need to think about the High Needs Block position over the next 5 years and that a transfer in 2017/18 will substantially strengthen the High Needs Block position (this is the opportunity to ‘strategically reset’ the DSG allocation).
• The Vice Chair expressed her concerns where the 2017/18 DSG allocation does not enable new high needs places creation. However, it is understood that consideration of option 3 or option 4 is a ‘very big deal’ for schools.
• How much saving can be made in the High Needs Block in 2017/18, to reduce the amount of Schools Block that needs to be transferred? The options, impact and pros and cons need to be presented more fully. It is expected that a suite of measures across the Schools and High Needs Block will be engaged to balance the DSG in 2017/18 to ‘spread the pain’.
• It was noted that the option 4 methodology included the use of £0.5m of reserve.

Reconvening on 18 January:

• Whether the Council’s reserve could be employed to support the DSG’s position in 2017/18? The Director of Finance clarified that the DSG is expected to manage its own pressures.
• The representative of Secondary Maintained schools Headteachers reported that he had asked for the view of colleagues on the outline options; 4 indicated support for option 4 and 3 for option 3. He added that the benchmarking data clearly supports the view for the expansion of high needs places in Bradford.
• A representative of Secondary Maintained governors reported that he had contacted colleagues, who have highlighted to him their concerns about the impact of any reduction in formula funding budgets in 2017/18. Colleagues are seeking re-assurance that such a reduction will help to resolve existing issues as well as building capacity for the future. The Authority’s SEND Strategic Manager responded to provide re-assurance that the Authority is looking for the quick release of vulnerable children from mainstream settings into expended provisions this term.
• Representatives of Maintained Primary Schools reported that, although there is very clear concern about the impact on budgets, option 4 is supported so that new high needs places can be created. Colleagues stress to the Authority that these places now must be created as quickly as possible.
• The Chair reported that he would summarise colleagues’ views from conversations that he has had as ‘concerned resignation’. Forum Members.
• A representation of the Trades Unions stated that the Schools Forum and Bradford schools should understand that the financial position isn’t the making of anyone in Bradford, but that if the Forum does not make a recommendation now to support the High Needs Block, there will be difficulties to face in the future.
• The Chair asked the Director of Finance to give his view about the financial position and the decisions to be taken by the Forum. The Director expressed his understanding of the difficulties of balancing the budget in 2017/18. Looking across the High Needs Block in the longer term supports the view that action needs to be taken now to enable high needs provision to move forward. The Forum has talked about these issues for sometime and now needs to take a firm decision.
• A question was asked about how, within option 4, the saving from the reduction in the direct funding of placements in the PRUs of pupils without EHCPs will actually be delivered. The Business Advisor stated that this will be discussed further with the BACs Strategic Group (there are options for the management of this).
• The Chair, on behalf of the Forum, stated for the minutes, that the position of the funding of Building Schools for the Future within the DSG continues to irritate.
• A request was made for an update to be given on the financial positions of maintained schools, specifically with reference to the possibility of liabilities resulting from deficit in schools that may convert as sponsored academies.

Resolved –

That the information contained in Document HA be noted.