1. School funding reform – changes for 2014-15 1 Schools forums Autumn 2013

2. Beginning the second year of school funding reform – the context  The changes introduced in the current year were the first step towards a national funding formula for schools  The simplification of local authority funding formulae was a radical step and produced some outcomes that were unexpected  Ministers therefore committed to reviewing the impact with the possibility of some changes for 2014-15 and continue to move towards a national funding formula  The announcement on 4 June set out the changes as a result of this review.  Compared to the changes for 2013-14 they are relatively modest

3. The 13-14 reforms mainly stay in place  The structure of the 13-14 reform remains in place  The simplified local formula is still at the centre of the system  There is still a closely limited set of factors that can be used in the school formula distribution  There will be LA proforma submissions in October and January as for 13-14  The high needs system remains broadly as in 13-14  The changes being introduced for 14-15 are relatively minor and the result of a review by DfE with local authorities of the impact of the 13-14 factors  The Minimum Funding Guarantee continues at -1.5% per pupil with the same exclusions + sparsity The changes for 14-15 are therefore a development of 13-14 and continue the journey towards a national funding formula for pre-16

4. The principal changes for 2014-15  There is one new factor – an allowance for sparsity, aimed at supporting necessary small schools, mainly in rural areas  Where a sparsity factor is used the maximum allowable for a sparse school is £100,000. The factor can be flat rate or tapered (ie the sparsity amount increases the smaller the school).  Allocations can only be made to small schools in sparsely populated areas  Changes to the lump sum: –LAs can now choose to have different lump sums for primary and secondary schools – with middles getting a weighted average –The lump sum is now capped at £175,000 per school –Where two schools amalgamate the new school will receive 85% of the total of the lump sums of the predecessors for the next full year. This removes the previous disincentive to amalgamate

5. The principal changes for 2014-15 (2)  The mobility factor will use a threshold to target funding more effectively to schools with the greatest mobility  The prior attainment factor will include the changes to the Early Years Foundation Stage for this year’s cohort  The secondary prior attainment factor will change to not achieving level 4 in English OR Maths (was English AND Maths in 13-14, so will reach a wider group)  No choice over the dataset used for Looked After Children  Authorities will have to distribute at least 80% through pupil-led factors (nearly all achieved this in 13-14)

6. The principal changes for 2014-15 (3)  In addition to the growth fund LAs may also create a fund for funding to cover temporary falling rolls in advance of a population bulge – but only for good or outstanding schools or academies  As with the growth fund, schools forum must approve the criteria and be consulted on allocations, and we will check the criteria when the proforma is submitted  The fund needs to relate to local place planning decisions  The falling rolls fund must not be used to support unpopular or failing schools  Forum regulations will be required to have one member from an institution providing education to 16-19 year olds, other than schools or academies – replacing the 14-19 partnership. This reflects the changes to post-16 high needs funding.

7. Disapplying the regulations  Local authorities can apply for exceptions to be made in a number of cases, including for:  Exceptional premises factors (eg rents, joint use) – 13-14 approval can be automatically carried forward if criteria still met  Exclusions from the MFG to avoid inappropriate levels of protection – for example if a split site school moves on to a single site  Changes in pupil numbers as a result of reorganisation or changes in years of admission. We expect that there will be an application in these cases so that the new academic year’s pupil numbers can be used instead of the previous year’s census

8. The principal changes for 2014-15 – high needs  In 13-14 we recommended that authorities delegated sufficient funding to allow schools to meet up to £6000 of special needs costs. This is now mandatory.  Where additional funding (not top-up funding) is given to some schools with disproportionate numbers of high needs pupils, we will expect the criteria to be decided in advance and described on the form submitted by the authority  We announced in July the details of a high needs place review – authorities have to undertake place reviews and return template to the EFA by 23 December. The high needs block of the DSG will be confirmed by 31 March.

9. Equal treatment  When constructing the formula, authorities must take into account the characteristics of all maintained schools and academies, including free schools, in their area.  When incurring central expenditure (other than de-delegated budgets), maintained schools and “recoupment” academies (where we recover funding from the local authorities’ DSG) must be treated on an equivalent basis.  All high needs providers must be treated on an equivalent basis when making placements.

10. Powers of schools forums  Schools forums have decision-making powers on specific issues: –Approving levels of expenditure on central schools block budgets –Funding a carried forward deficit from the schools budget in the following year –Approving the criteria for the growth and falling rolls funds –De-delegation of budgets (maintained schools only) –Changes to the scheme for financing schools (maintained schools only)  In other areas (eg the formula, arrangements for high needs) the authority decides but has to consult the forum

11. Sources of information  The announcement on 2014-15 funding arrangements is at – School Funding Arrangements for 2014-15 School Funding Arrangements for 2014-15  For the latest guidance on Schools Forums please see – Schools Forums adviceSchools Forums advice  Queries and applications to disapply the regulations should be sent to - ReformTeam.funding@education.gsi.gov.ukReformTeam.funding@education.gsi.gov.uk  Recoupment guidance for 2013-14 can be found at - Academy Funding Recoupment 2013-14 Academy Funding Recoupment 2013-14