Schools national funding formula and high needs funding reform Government consultation stage one 7 th March to 17 th April 2016

Overview Context and case for change Principles and headline features - schools funding - high needs funding Transition Local authority funding Issues to consider Our response

Context and case for change Current distribution methodology unfair and based on historic allocations from a decade ago Huge disparity in amounts LA’s get per pupil, and how much schools get per pupil Funding no longer matches need

The case for change School funding compared to pupil characteristics

The case for change Local funding formulae creates even greater variation between schools with similar circumstances

The case for change Within that there is a large range of funding values used for each factor

The case for change – high needs Funding for high needs does not correlate well to need

Fairer funding - consultation Two stage consultation Stage one: the vision and principles - the design of the system - the role of the local authority - the factors to include for each block Stage two: detailed proposals for factor weightings and the impact of the new formulae on LA’s and schools Early years consultation to follow later

Fairer funding - principles Supports opportunity Is fair Is efficient Gets funding straight to the frontline Is transparent Is simple Is predictable

Design of the system National schools budget National central schools budget National high needs budget National early years budget Distributed to schools by formula Distributed to local authority by formula LA high needs budget LA early years budget Distributed for high needs places and pupil top-ups Distributed to early years providers by local formulae

“Hard” schools formula In order to ensure that schools in the same circumstances attract the same funding across the county, move to a national formula for schools from Fundamental review of Schools Forum in that time Two years of transition, with local formulae in

“Hard” schools formula Fit with the Government’s wider ambition for all schools to become academies Ring-fence around the Schools Block from , accompanied by creation of Central Schools Block for funding in respect of local authorities’ continuing duties

School formula factors

Transition – “soft” schools formula Schools block will be allocated at LA level according to the national formula LA’s will continue to operate local formulae for 2017/18 and 2018/19 Only change to formula factors in this period is removal of post-16 factor (not used in Devon’s local formula so no impact)

Transition – “soft” schools formula Under the proposals LA’s will be required to pass on all of the funding they are allocated to through schools block to schools. No longer able to move funding between schools, high needs and early year blocks LA’s will be able to use previously accumulated reserves across all blocks

Transition – “soft” schools formula An exercise will be undertaken in March to re-baseline the four DSG blocks Each block should align with the pattern of each authority’s planned spend for 2016/17 Shadow formula – national MFG and cap on gains Local flexibility in setting MFG/capping rates

High needs funding reform Current arrangements based on historic allocations – out of kilter with needs Proposal is for formula distribution based on pupil numbers and proxy indicators of SEN (health and disability) factors, low attainment factors and deprivation factors Formula values and weightings will be stage two consultation

High needs funding reform LA’s will retain control over distribution at a local level An element of current spend will remain in the national formula for at least 5 years £200m capital funding will be made available nationally MFG will apply

High needs formula

Schools Forums and de-delegation Continuing role for 2016/17 and 2018/19 In advance of introducing the “hard” formula the DfE will carry out a review of role, functions and memberships of schools forums De-delegation will be withdrawn from 2019/20 Schools will be able to choose whether to buy services and who from

Support for school efficiency Some schools will lose funding as a result of the National Fair Funding The DfE have developed materials to encourage schools to improve their efficiency and financial health Includes benchmarking data, school efficiency metric, procurement strategy

Education Services Grant (ESG) £600m savings due by 2019/20 £72m reduction in 2016/17 Can’t be achieved by efficiencies alone – the government is reviewing how to reduce statutory burdens on schools and LA’s. LA’s will have no role in school improvement from academic year 2016/17

Funding remaining with LA’s Fourth block – Central Block – will combine DSG funding retained centrally and retained duties element of ESG Funding will be based on a per pupil formula (with area cost adjustment) Will need to evidence ongoing costs of historic commitments (spring 2016)

Removal of duties LA education functions will focus on 3 main areas: - securing sufficient school places are available, fair access and transport policies - vulnerable pupils/ SEND/ promoting attendance/alternative provision - acting as champions for all parents and families

Funding other statutory duties The government recognises that LA’s will need to fund education services once ESG general funding is withdrawn Regulations will be amended to allow LA’s to retain some of their maintained schools DSG to cover the statutory duties they carry out for maintained schools

Some of the issues to consider Impact of loss of discretion in dealing with local issues through local formula Growth – based on historic funding methodology? Sparsity is important for small schools Impact of any top-slice of DSG for LA statutory duties for maintained schools Transitional arrangements – MFG and capping

Responding to the consultation Consultation will close for each of the schools funding formula and high needs reform on 17 th April LA will draft a response and share as early as possible Consultation documents and on-line response form can be found here funding-formula/consult_viewhttps://consult.education.gov.uk/funding-policy-unit/schools-national- funding-formula/consult_view reformhttps:// reform