Agenda item

The Forum received a report that outlined the second stage consultation on changes to the funding of schools through a national formula.  The revised arrangements were to be introduced from 2018-19 with the direct funding of schools from the Government in 2019-20.  The deadline for responses was noted as 22 March 2017 and it was intended that the Forum consider a full response at the next meeting.

 

The report informed that the intention was that funding would be allocated directly to schools from 2019-20 through 13 different factors with the standard funding rates for all schools applied to each factor, adjusted for area costs.

 

Funding allocated through pupil-led factors was to be maximised so that as much funding as possible was spent in relation to pupils and their characteristics.  This was not, however, achieved through the basic per pupil factor (AWPU) but through increases to the amounts allocated through the additional needs factors.

 

It was stated that there would therefore be significant differences between the current and proposed funding rates.  2018-19 was to be a transitional year in which the Government would allocate funding to LAs according to the new formula factors and funding rates but LAs may continue to determine individual schools’ funding allocations through their local formula.

 

The report indicated that the funding received by the LA would therefore be the aggregate total of each school’s notional budget having applied the new national funding rates, the MFG of -1.5% and a gains cap of 3%.  The 2018-19 Schools Block would be ring-fenced although it would still be possible to transfer funding from the Schools Block into the High Needs Block with local agreement.

 

The report also noted that it was also proposed that ratio of funding between primary and secondary phases be moved to the national average of 1:1.29.  Havering’s ratio is currently 1:1.35.

 

The report informed the Forum that the combination of these changes would lead to gains and losses for individual schools, so protections and gains caps have been included in the new arrangements.  The minimum funding guarantee would continue to be applied to ensure that no school loses by more than 1.5% per pupil each year to a maximum of 3% and gains would be capped at 3% in 2018-19 and at a further 2.5% in 2019-20.

 

The report outlined the following Formula Design Proposals

 

·         Maximising the proportion of funding allocated through pupil-led factors

 

The proposal was to allocate 91% through pupil-led factors. The funding allocated through premises-related factors would therefore reduce where possible.  Funding for premises factors would be maintained in the first year and further consideration given for the hard national funding formula.  The amount allocated for lump sums, would however reduce.

 

·         Basic amount for every pupil

 

The amount allocated through the basic amount per pupil (AWPU) would reduce slightly from £24.4 billion in 2016-17 (77% of the total) to £23.3 billion (73%).  The report indicated that stepped rates would continue between primary, KS3 and KS4, reflecting the current national position.  No LA funds primary more than secondary and three quarters increase their per-pupil funding with each key stage.

 

In the current system, LAs could choose to include a ‘reception uplift’ to capture additional pupils who arrive after the October census, as applied in Havering.  The proposal was to remove this factor.

 

·         Additional Needs Factors

 

The current additional needs factors were to continue as follows:  deprivation, low prior attainment and EAL.  Funding for additional needs is to be increased from £4.1 billion (13%) to £5.8 billion (18%) as the government was keen to invest in these areas in order to promote social mobility and support schools in raising the attainment of pupils from deprived backgrounds and those who are just about managing.

 

Deprivation was to be the biggest additional needs factor, accounting for £3.0 billion (9.3%).  Three factors were to be used: FSM eligibility, Ever 6 FSM eligibility and IDACI (Income Deprivation Affecting Children Index).  Low prior attainment was a strong predictor of pupils’ later attainment therefore funding was allocated to enable schools to give extra support.  The funding allocated was £2.4 billion (7.5%) compared to 4.3 % in the current system.  The funding would enable schools to support all children who need to catch up with their peers, this factor directs funding to schools likely to be supporting pupils with special educational needs.

 

The primary schools, data from the Early Years Foundation Stage Profile would continue to be used as a basis for funding.

 

The secondary schools, KS2 test results would be used but adjusted for pupils taking the new, more challenging assessment.  The factor may be refined in the future to take account of pupils in the lowest 10% or 20%.

 

The report detailed that English as a second language would also continue for pupils who have entered the state education system during the last 3 years.  The factor would attract 1.2% of the total schools block compared to 0.9% in the current system.  Three quarters of the EAL funding was to be directed to primary schools reflecting the higher proportion of EAL pupils in that sector.  Further work was to be carried out on this factor to include the level of English proficiency recorded in the census of each EAL pupil.

 

It was also noted that a mobility factor was currently applicable as the Government was seeking views on the costs incurred by schools on pupils who join in-year rather than the normal admission dates.  In the meantime, funding would be allocated on an historic basis.  It was stated that in Havering, 16 primary schools received funding through the factor ranging from £192 to £8,708 (total £64k) and one secondary school (£1,711).

 

·         School-led factors

 

It was indicated that the Lump sums would continue but reduced to £110,000.  The reduced sum would affect smaller schools that were more reliant on an element of funding that was not driven by pupil numbers.  The lower lump sum reflects the Government objective to encourage schools to share services and functions where possible.  Schools in more remote areas were likely to receive additional support through the sparsity factor.

 

The report stated that there was no Havering school that had qualified for the funding in previous years.

 

·         Area Cost Adjustment

 

The Forum was informed that Havering applied the national funding rates to each school’s data, therefore the total would be uplifted by an area cost adjustment.  The cost was calculated to reflect variations in the labour market costs and variations in the teaching workforce, in Havering the ACA was 1.0809.

 

·         Growth factor

 

The national funding formula would also include a growth factor in order that it was responsive to significant changes in pupil numbers that were not recognised by lagged funding.  In 2018-19 funding for growth would be allocated on the basis of historic spend.  The favoured approach would be to fund Local Authorities on a lagged basis on the actual pupil number increases in every school between the two previous years.  The funding would be allocated to an LA on a per pupil basis although it would be the year after the growth had occurred.  It would be for LAs to manage their total growth funding.

 

 

 

 

 

·         A comparison of LBH funding rates and those of the national funding formula was in the following table:

 

 

The Forum received additional information on the impact on Havering and on individual schools at the meeting.

 

Following a brief discussion the Forum agreed to organise a funding formula specify meeting to consider the impact of the proposals on schools funding, and arrangements for wider consultation with head teachers and governors to inform a response to the consultation.

 

 

 

 

 

 

 

 

·         A comparison of LBH funding rates and those of the national funding formula was in the following table:

 

 

The Forum received additional information on the impact on Havering and on individual schools at the meeting.

 

Following a brief discussion the Forum agreed to organise a funding formula specify meeting to consider the impact of the proposals on schools funding, and arrangements for wider consultation with head teachers and governors to inform a response to the consultation.