Agenda and minutes

Schools Funding Forum
Wednesday, 25th September, 2019 8.30 am

Venue: CEME

Items
No. Item

1.

APOLOGIES FOR ABSENCE AND ANNOUNCEMENT OF SUBSTITUTE MEMBERS OR OBSERVERS

Minutes:

Apologies were received for the absence of Dave Waters (LA Maintained Governor), Denise Broom (Secondary Academy), Simon London (Secondary Academy), David Unwin-Bailey (LA Maintained Head Teacher), Kate Ridley-Moy (Primary Academy) and Gary Pocock (Special Academy).

 

Vicki Fackler was substituting for Gary Pocock.

 

2.

ELECTION OF CHAIR AND VICE-CHAIR

To elect a Chair and Vice-Chair until the first meeting of the autumn term 2020. 

Minutes:

Keith Williams was unanimously elected as Chair.

 

Kirsten Cooper was unanimously elected as Vice-Chair

3.

TO AGREE THE MINUTES OF THE MEETING HELD ON 13 JUNE 2019 pdf icon PDF 90 KB

Minutes attached.

Minutes:

The minutes of the meeting of the Forum held on 13 June 2019 were agreed as a correct record and signed by the Chairman.

 

4.

MATTERS ARISING

Minutes:

The following matters arose from the minutes of the previous meeting:

 

·         Minutes No. 7, the members noted the pupil capacity for a new Special School due to open in 2021/22 for 3 – 16 year olds had not been included in the report, it was stated that the new school would have a capacity of 60 pupils.

5.

GOVERNMENT ANNOUNCEMENTS ON ADDITIONAL SCHOOL FUNDING pdf icon PDF 237 KB

Report attached.

Minutes:

A report presented to the Forum gave details of the Prime Minister’s announcements of a £14 billion cash boost for schools.  This was an additional £2.6 billion of funding in 2020/21, with £700 million of this being for high needs, £2.2 billion in 2021/22 and £2.3 billion in 2022/23.  This funding will cover the growth in the number of pupils and pay awards including the proposed increased starting salary of teachers to £30,000 by 2022/23. Primary Schools are to receive a minimum of £3,750 per pupil which is set to rise to £4,000 in 2021/22 and Secondary schools are to receive a minimum of £5,000 per pupil.

 

The minimum funding guarantee will be set at 0.5% per pupil and the gains cap will be removed with the core factors of the National Funding Formula (NFF) to rise by 4%. This will be a formulaic factor for pupil mobility instead of on the basis of historic spending for fairer allocations for all authorities and protection will be implemented for the pupil growth and falling rolls fund to ensure it doesn’t reduce by more than 0.5% of the schools block allocation.

 

This formula model based on lagged growth disadvantaged Havering and the allocation would reduce the Pupil Growth Fund to £1.63m from the current £2.5m.  Options on funding schools for future pupil growth would be brought to the next meeting.

 

The forum was presented with the “Schools Revenue funding 2020 to 2021 Operational Guide September 2019” which was published by the Education & Skills Funding Agency (EFSA). The guide helps Local Authorities and Schools to plan the implementation of the funding system for the 2020/21 financial year. The EFSA will publish the NFF allocations to LAs in early October 2019. After that, the EFSA will then use the NFF to calculate the blocks within the Dedicated Schools Grant (DSG) and it will be allocated to LAs in December 2019.

 

The NFF will be updated with new factor values and other technical changes in 2020/21 and this will be detailed in the NFF technical note and policy documented due to be published in October 2019.  In line with the forecast GDP deflator, the funding floor will be set at 1.84% to protect pupil –led per-pupil funding and will be based on the individual schools’ NFF allocation in 2019/20. It was noted that the free school meals factor will stay at the inflation rate. There will be no NFF gains cap but LAs will still be able to use a cap for their local formulae for affordability.

 

The NFF will continue to pay the teachers’ pay grant and the teachers’ pension grant separately in 2020/21; the rates to be published by the EFSA in due course. The high needs funding floor will be set at 8% and the gains cap will be set at 17%. The guide states the government’s intention to move to a single ‘hard’ NFF to determine every school’s budget. The Forum noted that David Allen will present and explain the relationship  ...  view the full minutes text for item 5.

6.

DfE CONSULTATIONS RELATING TO 2020-21 FUNDING pdf icon PDF 74 KB

Report and appendices attached.

Additional documents:

Minutes:

A report before the forum set out DfE proposals for LAs to implement the mandatory minimum per-pupil funding levels of £3,750 for primary schools (rising to £4,000 in 2021/22) and £5,000 for secondary schools. A second consultation paper proposed extending the Academies Risk Protection Arrangement (RPA) to maintained schools.

 

The consultation on mandatory minimum per-pupil funding levels showed exactly how the figures were to be calculated to ensure consistency across the country with questions on disapplication, possible negative impact and equitable treatment.  David Allen would consult with finance colleagues before responding.

 

The Forum was then presented with the consultation on “Extending the Academies Risk protection Arrangement (RPA) to Local Authority Maintained Schools (LAMS)”. The RPA was launched for academies in 2014, on an opt-in basis, at a cost of £25 per pupil and this has been reduced in 2019/20 to £18 per pupil after previous claims experience. Havering’s insurance charge for schools in 2019/20 was initially £20.50 per pupil but was brought down to £15 per pupil by the end of the year and refunded to schools. It was proposed that schools could opt in individually or the School’s Forum can agree de-delegation on behalf of all LA Maintained schools and money paid into the RPA. The forum noted that some academies do not opt into the RPA.

 

Paula McLoughlin, the Borough’s Insurance and Risk Manager was in attendance and advised of the differences between the insurance cover available through the contract with Zurich and that available through the RPA. The Borough’s insurance team helps with insurance claims, indemnity, support with making claims, liability claims, support when taken to court, risk management advice etc. which is not provided in the RPA arrangements. There is £125,000 deductible in the Havering contract with Zurich which gives leeway for the best decision to be made when defending claims. The rate is fixed for the first 6 years and there is a risk to the LA if schools pull out within those first 6 years. The Forum noted that there is not likely to be schools transferring to the RPA and that Zurich and the Borough provides excellent service and support. The Forum agreed that decisions on insurance cover should not be taken purely on price. David Allen would respond to the consultation

 

The Schools Funding Forum noted the report and appendices

 

7.

CENTRAL SERVICES - DSG CENTRALLY RETAINED FUNDING 2020-21 pdf icon PDF 297 KB

Report including appendix attached.

Minutes:

It was noted by the Forum that the funding for central services was separate from the Schools Block and allocated to LAs through a 4th funding block, the Central Schools Services Block (CSSB). This block was for the ongoing central services such as admissions, which was previously top-sliced from the schools block. It also included the funding that was previously allocated for the retained duties element of the Education Services Grant (ESG).

 

The forum was then asked for approval the central retention of funding from the CSSB to continue to fund services as agreed in previous financial years. The votes were as follows on a table-by-table basis from page 25-27 of the main agenda pack:

 

Table 1 – It was noted that the budget of £180,000 for central licenses negotiated by the Secretary of State (such as the copyright license) is estimated to be the final figure in December although no Schools Forum approval was required.

 

Table 2 – It was noted that the £50,000 budget required to enable all schools to meet the infant class size requirement mostly went to a single school in the Borough with a half form of entry and the Admissions budget of £496,690 was a set amount that had not changed for several years. The Schools Funding Forum approved the retention of both sums by way of a unanimous vote.

 

Table 3 – The Forum noted that the contribution to the costs of responsibilities that local authorities hold for all schools is retained from the DSG having been transferred from the ESG. The amount available tends to be the balance of what remains in the CSSB once the budgets for the other areas are committed so is unlikely to increase. The Schools Funding Forum approved the central retention by way of a unanimous vote on the condition that the budget allocation for 2020/21 does not increase from the budget for 2019/20 of £569,870. If there is an increase then this would be brought back to the Forum for further discussion.

 

Table 6 – the Forum noted that the capital expenditure from revenue decided prior to April 2013 has ended, hence the value of £0 in the budget for 2020/21 and the contribution to combined budgets is the School Partnership Fund. The Forum approved the £200,000 School Partnership Fund by way of a unanimous vote

 

Table 7 – The Schools Funding Forum deferred decisions on Pupil Growth and Falling Rolls Funds to be presented at the next meeting due to insufficient data regarding the budget for 2020/21.

8.

DE-DELEGATION OF FUNDING FROM MAINTAINED SCHOOLS 2020-21 pdf icon PDF 178 KB

Report and appendices attached.

Additional documents:

Minutes:

The Forum noted that this report was for maintained schools only. The areas for which de-delegation was permitted were set out in paragraph 1 on page 30 of the main agenda pack.

 

The maintained schools representatives were asked to vote to approve the services to be de-delegated. The discussions, votes and results are as follows:

 

1. Contingency for Schools in Financial Difficulty – It was noted that criteria for a school in financial difficulty is if the school was in deficit in the previous financial year, forecasts a deficit for the new financial year and is again in deficit at year end after taking action to reduce costs. The forum supported 10 schools that met these criteria in the current year and the maintained schools voted to approve the budget to be provided through de-delegation of £11 per pupil by way of a unanimous vote.

 

2. Attendance & Behaviour – The Forum noted that the cost of buy-back at a similar level of service to that provided through de-delegation is £7,618. It was also noted that 86% of schools, based on 2019/20, would save money from de-delegation compared to buying services at a similar level. The maintained schools did not vote on this point pending a response to a query on the level of access to the service that was proportionate to the amount de-delegated per school.  Because of the timetable for setting budgets, this may require wider consultation with schools.

 

3. EAL Service – The Forum noted that the cost of a similar level of service as that provided through de-delegation is £2,309 and, based on data from 2019/20, 63% of schools would save money from de-delegation compared to buying services at a similar level. The Forum also noted that since 2016, the English as an Additional Language (EAL) pupil population has risen from 17.5% to 22.6%. While discussing the impact of the EAL team, it was noted that the most underperforming ethic group statistically is white British and schools needed more help than they currently receive. The maintained schools voted to approve the service to be provided through de-delegation of £38 per EAL pupil by way of a unanimous vote.

 

4. Free School Meals Eligibility – The maintained schools voted to approve the service to be provided through de-delegation of £9 per FSM pupil by way of a unanimous vote.

 

5. Insurance – It was advised to the forum that the figure for the maximum amount was reduced from £20.50 to £18 to match the RPA charge. The maintained schools voted to approve the service to be provided through de-delegation by way of a unanimous vote on the basis of the decrease to £18.

 

6. Maternity Insurance – The maintained schools voted to approve the service to be provided through de-delegation of £26 per pupil by way of a unanimous vote.

 

7. Trade Union Facility Time – The Forum noted the reduction of the cost per pupil form £5.70 in 2014/15 to £2.50 for the last 2 years following  ...  view the full minutes text for item 8.

9.

SPECIAL SCHOOLS FUNDING pdf icon PDF 329 KB

Report and appendices attached.

Additional documents:

Minutes:

The report presented to the Forum detailed the funding for the 3 current special schools and the provisional 4th special free school, scheduled to open after 2021.

 

The report detailed the number of places in each school including  a special free school that has been DfE approved to cater for 60 pupils ranging from 3-16 years old who have severe or complex ASD or social, emotional and mental health difficulties. The report also notes of the DfE’s recent approval for Forest Approach Academy to expand its age range from 4-16 years old to 2-19 years old. It is noted that Corbets Tey is the only special school of the 3 to be maintained by Havering while Forest Approach and Ravensbourne School are special academies within the Lime Trust.

 

From their DSG High Needs block, the LA must fund £10k for the number of places at each special school/academy. The £10,000 is elements 1 and 2; element 1 is £4,000 equivalent to the Age Weighted Pupil Unit (AWPU) for mainstream schools pupils and element 2 is £6,000. A third element, a top up rate, is paid to the school for pupils with EHCPs by the LA that commissions the places for pupils. The EFSA will pay the £10k for the new special school.

 

Point 3.2 Current Matrix on page 46 in the main agenda pack includes a table for the current funding matrix and a ”top up 2” element. The Forum noted that the top up 2 will be absorbed into the matrix and the number of bands within the matrix funding descriptors, will be reduced. The tables on page 48 of the main agenda pack outline the basis for revising the funding as the adult to pupil ratio for each of the matrix bands.

 

Consideration had also been given to benchmarking against the funding of special schools in other LAs, The maximum allocation that any LA uses it is formula is £36,230 with the lowest being £4,920. The Forum noted that it is difficult to benchmark Havering with other LAs because of differences in the designation of special schools.

 

The Forum noted that for the current financial year, Havering’s High Needs Block is predicted to overspend by £1 million which would increase by £700k if implementing these changes from September 2019.  It was stated that the current overspend may be rectified or at least reduced due to the higher funding level in the next financial year.

 

It was noted that special schools try to give vacant places to Havering pupils to reduce the costs of children being placed out of borough.

 

The report detailed the funding for each school based on the proposed matrix bands with a total increase in a full year of £1.2 million. The Forum voted to approve the revised funding levels to take effect from 1st September 2019 by way of a unanimous vote.

10.

ELECTIVE HOME EDUCATION (EHE) TRANSFER OF FUNDING BETWEEN SCHOOLS pdf icon PDF 172 KB

Report attached.

Minutes:

The report brought before the Forum proposed the transfer of funding between schools for Elective Home Education (EHE) pupils. Havering currently has 185 EHE pupils across all year groups. These pupils are not included in any census for DSG funding so Havering loses approximately £750,000.

 

 

When a pupil is removed from mainstream education for the purpose of EHE, AWPU funding stays at the school at which they were on roll. The proposed change is for the AWPU and Pupil Premium funding within that financial year from the date the pupil is taken off roll to be recovered by the LA to assist in re-engaging the pupil back into mainstream education, and that the AWPU and Pupil Premium funding is allocated to the admitting school from the date of admission to the end of the financial year.

 

The report detailed the lack of funding mainstream schools receive when an EHE pupil is referred back to the school. Some EHE pupils may be vulnerable, meaning the school will incur extra expenses to make reasonable arrangements for the pupil.

 

These changes are hoped to encourage families and pupils back into mainstream education as currently the LA have minimal input with regards to EHE pupils. Havering is waiting on DfE guidance on how to prevent pupils leaving mainstream education for the purpose of EHE and how to route those pupils back in to school.

 

It was noted that in the summary of Havering Alternative Provisions table on page 54 of the main agenda pack, Olive Academy’s places have been reduced from 64 to 40 with effect from 1st April 2020.

 

The Forum voted to approve the transfer of funds between schools for EHE pupils with effect from 1st September 2019 by way of a unanimous vote.

 

11.

DfE CONSULTATION - FINANCIAL TRANSPARENCY OF LOCAL AUTHORITY MAINTAINED SCHOOLS AND ACADEMY TRUSTS pdf icon PDF 124 KB

Report and appendix attached.

Additional documents:

Minutes:

The report presented to the School Funding Forum provides detail on the recent consultation document issued by the DfE on improvements to the transparency of the financial health of LA maintained schools. The document is aimed at LAs and LA maintained schools.

 

Issue 1 proposed that if LAs fail to comply with two deadlines for financial data submissions the LAs’ names will be published on GOV.UK.

 

Issue 2 details proposals on how to strengthen DSG annual assurance returns. The DSG assurance statement will include the number of schools with suspended budgets and notices of financial concern. This is to enable extra support to be provided to LAs that report a high number of suspended delegations or notices of financial concern.

 

Issue 3 proposes that LA maintained schools must provide the LA with 3-year budget forecasts. The Forum expressed concerns over this stating that many factors can affect a budget and a 3-year forecast for some LA maintained school is unrealistic, implausible and improbable. Only between 5 and 10% of Havering maintained school currently provide a 3-year budget forecast.

 

Issue 4 advises that academy trusts must currently report all Related Party Transaction (RPTs) to the EFSA in advance of the transaction taking place. Since April 2019, all academy trusts have to seek approval from the EFSA for RPTs of more than £20,000 and all payments under £20,000 must be declared. The Government have put forward 3 proposals;

 

1.    Schools must append a list of RPTs in their Schools Financial Value Standard document.

 

2.    All schools must report all RPTs, or RPTs above a certain amount, directly to the LA.

 

3.    Schools must seek the permission of the LA to enter into any RPT above a certain amount.

 

Issue 5 raises the issue of the internal audit for LA maintained schools being too infrequent and proposes to change this so schools must be subject to an internal audit at least every 3 years.

 

Issue 6 outlines the proposal to strengthen the arrangements to help schools in financial difficulty. They plan to make a requirement that schools submit a recovery plan to the LA if their revenue deficit goes above 5%; through the DSG annual assurance return from the CFO, the Government wish to collect data on the number of recovery plans in each LA, or; request high level action plans from some LAs.

 

Issue 7 summaries the lack of transparency when it comes to reporting high pay for school staff. The Government states that there are currently discrepancies between public access to data with regards to high salaries in LA maintained schools and academies. Academy trust must currently disclose details of each staff member with a salary of over £100k in their published financial statements, specifically their FTE salary in £10k bands (e.g. £100k-£110k), their job role and description and whether they are focussed on curriculum or school business management.  The Forum commented that the publication of salary information on a school’s website would make it easier to identify the person whereas  ...  view the full minutes text for item 11.

12.

NEXT MEETINGS

Future meetings have been arranged as follows:

 

7th November

17th December

16th January

19th March

18th June

 

All meetings to start at 8.30 am at CEME.

Minutes:

The future meetings for the Schools Funding Forum have been arranged and agreed by the Forum. They are set out below:

 

7th November 2019

17th December 2019

16th January 2020

19th March 2020

18th June 2020

13.

ANY OTHER BUSINESS

Minutes:

The exempt minutes of the meeting of the Forum held on 13 June 2019 were agreed as a correct record and signed by the Chairman.