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Report to Scrutiny Panel
Name of Scrutiny Panel
Children & Young People’s Scrutiny Panel
Meeting Date
18 December 2013
Subject
Changes to School Funding
Wards Affected
All
Report of
Director, Children & Young People’s Services
Type of Item
(please tick )
Review existing policy
Development of new policy
Performance management (inc. financial)
Briefing (inc. potential areas for scrutiny) ✓
Statutory consultation
Council request
Cabinet request
Member request for scrutiny (CCFA)
Why is it coming here?
Scrutiny Panel has asked for an update on changes to school funding for 2014/15 and an
indication of possible future changes.
What are the key points?
The changes to funding for 2014/15 are not significant for Calderdale. However it is understood
that the DfE will shortly be consulting all local authorities on a proposed national funding formula
for all schools from April 2015.
Possible courses of action
For Scrutiny Panel to receive a further update in the summer of 2014 when the DfE may have set
out its plans for 2015/16.
Contact Officer
Mark Woolley – Service Manager Business Support
Should this report be exempt?
No
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Report to Scrutiny Panel
1.
Background
1.1
The value of funding distributed to all maintained schools, academies and early
years providers in Calderdale in 2013/14 was £147 million. This is £10 million for
early years (2, 3 and 4 year olds), £71 million in primary, and £66 million in
secondary. Where Calderdale schools are concerned, their funding is now
distributed using 9 formula factors common to all other local authorities.
1.2
The longer term aim of the Department for Education (DfE) is to move towards a
national funding formula for all schools. This could now happen as soon as April
2015. In between times the DfE wants all local authorities to continue to adopt
more consistent approaches. These further refinements to school funding will make
the final step to any national funding formula easier to manage.
1.3
In Calderdale the proposed changes to school funding for 2014/15 are not
significant. As with any funding changes there has been a movement of funding
between some schools. It has been possible to manage this tightly and guarantee
no school will lose more than 1.5% funding per pupil (the DfE’s Minimum Funding
Guarantee). The largest loss in a primary school is £37k (1.43%) and the largest
loss in a secondary second is £79k (1.43%). Those schools losing funding are
largely those who will benefit from increasing amounts of Pupil Premium, which is
determined by central government and is in addition to formula funding.
1.4
Academies have a separate funding year (September to August) and their funding
is paid by the Education Funding Agency (EFA). However their funding allocation is
calculated using the Local Authority Funding Formula, and is deducted from
Calderdale’s DSG. Hence these changes equally apply to academies.
2.
Main issues for Scrutiny
2.1
Earlier in the year the DfE compared the funding factors and values adopted by 152
local authorities in England from April 2013. The DfE then produced a series of
comparative bar charts showing the range of values adopted by each local authority
for the 11 available factors. (Calderdale had adopted 9 factors).
2.2
As a result of the above findings the DfE announced on 4 June 2013 a number of
refinements to those changes made in 2013/14, aimed at providing more
consistency across all local authorities from 2014/15. In addition it would give local
authorities the opportunity to review any funding values in the light of the
information provided.
2.3
The DfE main changes can be summarised as follows:
a) To protect small, rural schools, local authorities can add a “sparsity” factor. The
value can be up to £100k per eligible school. The DfE will undertake a standard
calculation for all schools and determine any eligible schools.
b) At least 80% of total school funding is to be distributed on pupil characteristics
(Calderdale already achieves 90%).
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c) Funding for low prior attainment (known as low cost, high incidence SEN) in
secondary schools, is based on KS2 results, and is to include children that do
not achieve level 4 at English or Maths, rather than not achieving English and
Maths, as it is now.
d) Schools Forum to appoint a Post 16 representative, from an institute providing
Post 16 education (other than a school or academy).
e) The possibility of local authorities using a separate value for the Lump Sum in
primary and secondary, rather than using the same value. Calderdale currently
uses £110k for both sectors.
f) Schools to be notified of their final funding allocations by 28 February 2014
(rather than 31 March 2014). Calderdale achieved this deadline last year and
will be able to do so again.
2.4
It was anticipated, as in previous years, there would be no increase in school
funding from central government to local government. Therefore any increase in
funding factor values or any new factors created by the above, would need to be
funded from reductions in existing factor values or any funding made available
through reduced funding protection.
3.
Consultation
3.1
In Calderdale’s case, the changes required were not expected to be significant but
would present an opportunity to look at any further simplification to factors, or any
changes to funding values, in the light of the DfE information provided. Schools
Forum agreed on 24 June 2013 to set up a sub-group to consider and develop
between July to September 2013 any necessary proposals (consisting of 3 head
teachers, 2 governors, 2 school business managers and 3 Local Authority officers).
3.2
The sub group of Schools Forum presented their proposals in the form of a
consultation document for Calderdale (titled; Review of Funding Arrangements for
2014/15), distributed to all schools for final consultation between 18 September and
9 October 2013. The proposals schools were consulted are summarised below.
The detailed considerations of the sub-group are provided at Appendix 1.
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Proposal 1
A Sparsity factor is not adopted.
Proposal 2
The Prior Attainment unit funding value in primary and
secondary becomes the same for all eligible children.
Proposal 3
The Post 16 commissioning group elect their own
representative for Schools Forum.
Proposal 4
The Lump Sum funding value in primary and secondary
remains at £110,000 per school.
Proposal 5
The Basic Entitlement unit funding values in primary and
secondary remain at current rates.
Proposal 6
No changes are made to the way in which deprivation
funding is distributed.
Proposal 7
The LAC funding value is increased from £600 to £900 per
eligible child.
Proposal 8
A Mobility factor is not adopted.
Proposal 9
The capping of gains is increased as far as final available
resources will permit.
3.3
All schools and academies were presented with a financial impact assessment in
the consultation document, showing their funding in the current financial year and
the proposed level of funding under any new arrangements from April 2014. No
maintained school or academy would lose more than 1.5% funding per pupil in
2014/15. This is the DfE Minimum Funding Guarantee (MFG). Similarly to fund this
guarantee, no school would will gain more than the cap of 1.5% funding per pupil.
3.4
The Local Authority received three responses to the consultation. These were
shared with Schools Forum at their meeting on 14 October 2013. Two responses
raised no objections but were supportive of the proposals. A third response queried
the reduction in funding at a primary school. This reduction related to reduced
funding protection from a decision in a previous year.
3.5
At their meeting Schools Forum were also made aware of a recent DfE
announcement to increase the Pupil Premium for looked after children from £900 to
£1,900 next year (now the Pupil Premium Plus). The implication being Calderdale
might want to reconsider the proposal to increase formula funding for looked after
children from £600 to £900 next year.
3.6
A number of examples were given of other local authorities providing formula
funding of up to £1,000 for looked after children, with no local authorities looking to
reduce the funding they make available through formula funding as a result of this
announcement. Schools Forum took the view that on balance an increase of £300
next year was still appropriate. The proposals at paragraph 3.2 were approved by
Cabinet on 11 November 2013.
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3.7
The Local Authority and Schools Forum are committed to annually reviewing the
operation of Calderdale’s school funding formula (DfE requirements permitting). To
that extent, Calderdale schools can be reassured that any unintended
consequences will be looked at again in 12 months time.
4.
Further action and timescales
4.1
The DfE has said that it intends to consult all local authorities either before
Christmas or in the early spring 2014, on proposals for a national school funding
formula as early as April 2015. If the consultation goes ahead, it is likely that the
DfE will confirm its intentions for 2015/16 either by the end of the summer or the
start of the autumn term 2014. At that point it would be appropriate to provide
Scrutiny Panel with a further update.
5.
Conclusions
5.1
The review of school funding last year was the most significant review of school
funding in the last 20 years. The refinements to funding for next year are not
significant for Calderdale. The Local Authority is committed to reviewing annually
the operation of Calderdale’s school funding formula. Overall the proposals have
been well managed and well received by schools.
5.2
The DfE are likely to be consulting all local authorities shortly on a national funding
formula from April 2015.
6.
Appendices
6.1
Appendix 1 – Schools Forum Sub Group – Proposals – April 2014.
7.
Background document
7.1
DfE school funding reform: Next steps document.
7.2
Calderdale’s school funding review – Consultation document.
8.
Documents available for inspection at
8.1
Northgate House or on the DfE and Calderdale Council websites respectively.
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Appendix 1
Schools Forum Sub – Group Proposals – April 2014
1) A Sparsity Factor
The DfE define small, rural schools, that may require further financial support, as
(a) primary schools with fewer than 150 pupils, and average distance per pupil
to the next nearest school of 2 miles or more, and (b) secondary schools with
fewer than 600 pupils, and average distance per pupil to the next nearest school
of 3 miles or more. Currently only Todmorden High School meets this criterion in
Calderdale.
DfE requirements would allow local authorities to allocate up to £100k per
school, either as a lump sum, or a tapered amount increasing the further a
school roll falls below the above thresholds. Given the limited overall funding
available, and other priorities, the only realistic option for Calderdale would be to
consider a tapered approach. In the case of Todmorden High School, with 588
pupils, this would provide £2k additional funding per annum.
The sub-group were of the opinion the funding formula should be restricted to
those factors that distribute significant resources, to larger numbers of schools,
ensuring the simplicity of Calderdale’s funding formula. To this effect, the subgroup were of the opinion that a Sparsity factor should not be adopted at this
time, and the situation be reviewed in 12 months time.
Proposal 1 – A Sparsity factor is not adopted.
2) Prior Attainment funding
Currently Calderdale’s prior attainment funding values for both primary and
secondary school are slightly above average, when compared to all other local
authorities. However Calderdale has a significant difference between the value
in primary (£1,401) and the value in secondary (£3,263). Amongst other things,
there was support to close this differential.
DfE data for distributing prior attainment funding will now include secondary
pupils who did not achieve level 4 in either English or Maths at KS2 (rather than
English and Maths). This will significantly increase the number of secondary
pupils eligible for prior attainment funding (from 1,100 to 2,800). Ordinarily, if the
sum set aside to fund prior attainment in secondary schools, was simply divided
by the number of children now eligible, the unit value would become £1,295
(much closer to the primary school value).
Further, there was support for removing the above differential (£1,401 in primary
and £1,295 in secondary) by simply dividing all the funding available for prior
attainment in primary and secondary, by the number of pupils eligible for
support, to have a common value of funding. This would provide a funding rate
of £1,360 per pupil in each sector.
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Proposal 2 – The Prior Attainment unit funding value in primary and
secondary becomes the same for all eligible children.
3) The need for a Post 16 representative on Schools Forum
The DfE requirement is to have a representative on Schools Forum from a Post
16 provider, other than from a school or academy. This could include Calderdale
College and other external providers. It was felt important that these providers
should elect their own representative.
Proposal 3 – The Post 16 commissioning group elect their own
representative for Schools Forum.
4) Lump Sum funding
Currently, both primary and secondary schools in Calderdale receive the same
Lump Sum, of £110,000. The DfE comparative information shows Calderdale’s
funding value is probably just below the national average. There is the option to
vary this sum between the two sectors. Given the pressure on funding, and
there being no evidence to suggest the value should be varied, the sub-group
supported keeping the value the same in both sectors.
Proposal 4 – The Lump Sum funding value in primary and secondary
remains at £110,000 per school.
5) Basic Entitlement
The main formula funding factor is the Basic Entitlement. This distributes more
than 76% of overall funding in Calderdale. Separate rates apply to primary
(£2,839) and secondary (£4,143). Calderdale funds the Basic Entitlement at KS3
and KS4 at the same rate. The Basic Entitlement has the main impact on the
funding ratio between primary and secondary. The current ratio in Calderdale is
1:1.24, whereas the national average is 1:1.27.
In addition to delegated funding, secondary schools benefit from funding held
centrally within the overall Dedicated Schools Grant (DSG) of £800k, towards
the Information Advice and Guidance (IAG) service. If this was taken into
account, the funding ratio in Calderdale would be close to 1:1.27. On that basis
the sub-group were of the view that no change should be made to the values of
Basic Entitlement in primary and secondary.
Proposal 5 – The Basic Entitlement unit funding values in primary and
secondary remain at current rates.
6) Deprivation
The level of deprivation funding distributed by Calderdale in 2013/14 was
reduced, to 7.4% of overall funding, and is now in line with the local authority
average. However, the way allocations are calculated has a degree of
complexity. There are two elements; 36% of funding is based on free school
meal numbers (FSM6, which is easily understood) and; 64% on weighted
indices for family income (IDACI, which is less well understood). This was
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agreed to minimise the funding impact on individual schools when the change
was first made last year.
Whilst the use of free school meals is simplistic, the sub-group agreed that by
adding an element of IDACI provided for a more sophisticated approach. Simple
FSM6 was considered a blunt instrument. Further, any increase in the use of
FSM6 would increase the level of funding protection (MFG) needed. It is
estimated that a distribution based on 50% FSM6, rather than 36% FSM6, would
increase the amount required for funding protection (MFG) by £130k.
Proposal 6 – No changes are made to the way in which deprivation funding
is distributed.
7) Looked After Children (LAC) and English as an Additional Language (EAL)
In Calderdale, schools receive additional funding of £600 to educate a looked
after child, and £565 in primary and £700 in secondary for a child with English
as an additional language (for their first 3 years schooling). In the case of looked
after funding, the value was set to match the rate of Pupil Premium (albeit the
rate in the previous year, due to the timing of government announcements on
rates of Pupil Premium). The Pupil Premium in 2013/14 is now £900. The value
of EAL funding was simply based on the amount of funding previously
distributed. There was a strong desire to see the LAC value increase to £900.
This would cost an additional £55k and could be found from reduced funding
protection (MFG). To increase the EAL value by £100 would cost an additional
£180k and therefore any increase was considered unaffordable.
Proposal 7 – The LAC funding value is increased from £600 to £900 per
eligible child.
8) Mobility and Post 16 factors. Calderdale’s funding formula in 2013/14 did not
include these factors.
A Mobility factor – Calderdale did previously provide a small amount of funding
for mobility (£100k). To access this funding, a school roll needed to change
during the year by more than 15% (that was new entrants during the year, plus
leavers, as a proportion of the total roll at the beginning of the year). The budget
was later rolled into deprivation funding when mobility was seen as a lesser
issue.
The DfE requirement is to only fund those schools with changes of 10% or more
of their school roll, taking account of only new entrants. Further, these schools
would only be funded for the percentage above 10%. There are currently 24
Calderdale schools above 10%. Many of these are only marginally above 10%.
This equates to funding for 212 pupils. If £100k was again allocated for Mobility,
this would provide £470 per pupil, with most schools receiving between £0k and
£8k per annum.
The sub-group debated at length the merits of adopting a Mobility factor. This
included discussion on the additional costs these schools might face (for
example the need for bilingual interpreters and class room support assistants),
and the additional funding these children might already be attracting (prior
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attainment funding, deprivation, EAL and Pupil Premium). It was noted that 62
of the 152 local authorities had adopted a factor last year.
The sub-group supported the need for the funding formula to be restricted to
factors that distribute significant resources, to larger numbers of schools,
ensuring the simplicity of Calderdale’s funding formula. Further, the sub-group
recognised that many of these children already attract other funding (prior
attainment, deprivation, EAL and Pupil Premium). Consequently the majority
view of the sub-group was that a Mobility factor should not be adopted at this
time, and that the situation should be reviewed in 12 months time.
Proposal 8 – A Mobility factor is not adopted.
The Post 16 factor – this was only to be used by local authorities using
delegated DSG funding in 2012/13 to support post 16 provision. Calderdale
provided no delegated funding for post 16. There is no need for Calderdale to
consider any further changes here.
9) Funding protection and capping of gains.
As a result of the new funding formula this year, funding protection (MFG)
applied so no school lost more than 1.5% funding per pupil. In order to pay for
that protection, gaining schools were restricted to gains of no more than 1.5%
per pupil. Next year the DfE’s funding protection (MFG) will again ensure no
school loses more than 1.5% funding per pupil. However, as each year moves
on, less funding protection (MFG) is required. The best estimate at this stage of
the reduction in funding protection for 2014/15 is £500k.
This means that the available resources to fund any formula changes will be
around £500k. The proposal to increase the LAC value, consumes about £55k
of this sum. Changes to prior attainment funding have the greatest effect. Using
an average value for both sectors consumes £150k (mainly in MFG protection)
and the increased number of eligible pupils (English or Maths at level 4 not
English and Maths) consumes a further £200k. This totals £405k and leaves
£95k at this stage to increase the cap on any gains (from 1.5% to 1.55%).
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