Issue - meetings

It was explained that the Chartered Institute of Public Finance and Accountancy’s Treasury Management Code required that authorities report on the performance of the treasury management function to Full Council at least twice per year (mid year and at year end).  The Authority’s treasury management strategy for 2018/19 was approved at a meeting of the Authority in February 2018.

The key highlights of the Mid-year report were as follows:

·         Investment portfolio average quarterly return was 0.85% as at 30 September 2018 compared against the average quarterly 3 month LIBOR benchmark of 0.73%.

·         The Treasury Advisor’s benchmarking club of 15 London Boroughs had an average return of 0.84% in Quarter 2 on comparable internally managed investments.

·         No breach of the Authority’s prudential indicators and treasury indicators.

The Authority held a £7m LOBO loan, where the lender had the option to propose an increase in the interest rate at set dates and the Authority would consider repaying the loan at no break cost if the opportunity arose as it was not currently viable to restructure the loan at this time.

The Committee received the 2018/19 Budgeted Capital Financing Costs and were advised that the interest earned to date and the forecast capital financing costs took into account a forecast reduction in capital expenditure during the year from £185m to £118m due to slippage in the capital programme. 

RESOLVED: That

i)          The treasury management activities for the half year detailed in the report, be noted.

ii)         Section 7 on the separation of structures of larger UK Banks into retail (ring fenced) and investment (non ring-fenced) banks, be noted.

Members received a report which advised of the Government’s announcement of the increase in employer contributions to the Teachers’ Pension Scheme in 2019 and the allocation of grant.

Following advice from the HM Treasury, the Teachers’ Pension Scheme had announced that the increase in employer contributions was likely to rise from 16.48% to 23.6%, compared to the 19% increase from April 2019 that schools had been advised to budget for.  The increase had been delayed until September 2019 and the Government had advised that the increase would be fully grant funded.

The Schools Funding Forum noted the arrangements for grant funding the increase in teachers’ pension contributions from 2019.

The Forum received a report which sought its approval for the de-delegation of funding to maintain the provision of a central EAL service in 2019-20 as permitted by the Department for Education Schools Funding Regulations. 

The results of consultation with all maintained primary school head teachers were:

Number of responses:        22 (51%)

Agree to delegation:                        16 (73%)

Disagree                                  6 (27%)

The Local Authority maintained school representatives agreed to the de-delegation of funding from the budgets of Local Authority maintained schools to support a central EAL service for the 2019-20 financial year.

Members received a report that requested that the Havering’s Schools Funding Formula followed the Department for Education National Funding Forum for a second year in 2019-20 and considered, based on current modelling, if this would be achievable within Havering’s Schools Block allocation from the Dedicated Schools Grant.

The Forum was provided the indicative allocation of schools block funding to Havering for 2019-20 at its meeting on the 20 September 2018. There was an issue that the funding from the Department for Education was based on previous year estimates and would be insufficient to pay actual NNDR costs in 2019-20 and that the actual funding received would be calculated according to a new formula and would be significantly less than the £3.3m figure.  

The Schools Funding Forum agreed to a consultation with schools on the allocation of funding for 2019-20 using the funding rates within the National Funding Formula, including a 0.5% minimum funding guarantee and a gains cap that was affordable up to a maximum of 3%.

A summary of APT formula – Cap , MFG and Funding Floor was circulated at the meeting.  The summary was based on unverified data by the Department for Education, as local authorities would not be in receipt of the final DSG calculations until mid December.

The Forum considered the options presented and agreed that a minimum funding guarantee of 0.5% be applied, capped at 2%. The Forum agreed that an exemption to exclude the mobility factor be applied for to the Secretary of State.

The Forum was requested to consider transferring £800,000 from the Schools Block to the High Needs Block. After much consideration and debate, the Forum did not agree to the transfer request.  It was considered that a per pupil contribution of £23 would place further pressures on schools budgets and could mask the real problem of the DFE’s underfunding of high needs.

Members received a draft report that sought to set out how Havering’s allocation of funding from the Dedicated Schools Grant (DSG) High Needs Block was deployed to support and place, in appropriate provision, pupils and young people with special educational needs and/or disabilities and pupils with challenging behaviour requiring intervention or alternative provision. 

The inadequacy of funding to local authorities through the DSG High Needs Block was a national issue, with an increasing number of local authorities reporting year end overspends of their High Needs funding and attempts of some to take remedial action having been the subject of judicial review.

There were a number of competing pressures on high needs funding, which included:

·         An increasing number of pupils and students requiring Educational Health Care Plans within a growing pupil population;

·         An increase in the complexity of need of children requiring placement in Havering schools;

·         The revenue costs of funding a new special school for Social, Emotional and Mental Health and Autism Spectrum Disorder;

·         The revenue costs of more additionally resourced provisions in mainstream schools;

·         Funding that recognised the pressures on schools with high numbers of pupils with Educational Health Care Plans;

·         The need for additional support within children’s early years;

·         An increase in post 16 provision up to the age of 25;

·         Pupils with medical needs but no Educational Health Care Plan; and

·         Additional training for school staff for children with Special Educational Needs and Disabilities.

In 2018-19, the Government introduced a National Funding Formula (NFF) to redistribute allocations to local authorities for high needs, with the aim to have a fair, transparent and predictable funding system. Based on the application, Havering received an increase in funding of 8.2%, however there was a cap of 3% which had limited the additional funding that Havering would receive. Although this additional funding eased some pressure on budgets, Havering continued to under-fund almost all areas of high needs provision.

The government also provided all local authorities with Special Provision Capital Funding over three years starting in 2018/19, to be used to improve facilities for children and young people with high needs and for increasing the number of places available.

The three special schools in Havering were currently funded £10,000 per place and an element 3 top up per pupil form the commissioning Local Authority. The new free school would be funded by the Education and Skills Funding Agency at £10,000 per place x 60 places and element 3 top up funding from the Havering’s high needs block. 26 pupils were identified who could have attended this new school and these children and young people were currently attending a range of independent or non-maintained provision averaging at just over £63,000 per place per year. 

The three secondary schools and three primary schools in Havering which had an Additional Resource Provision (ARP) were allocated £6,000 (element 2) per place with additional top up funding (element 3) of a further £6,000 per place.  In addition, a further ARP was expected to open in September  ...  view the full minutes text for item 18