School Funding Consultation Event – Somerset Schools Forum Education Services Grant (ESG)

ESG - Background ESG is paid to local authorities (LAs) and academies on a per pupil basis as an un-ringfenced grant. The purpose of the grant is to enable local authorities and academies to fund their schools’ services and responsibilities. Allocations are made as follows: Retained duties rate; this allocation is to meet the obligations that LAs have to fulfil to both academies and maintained schools. It is paid to LAs for every pupil, currently £15 per pupil. General funding rate; paid to LAs for pupils in maintained schools and direct to academies for their pupils. Currently £77 per pupil.

National Changes In the 2015 Spending Review, the DfE announced a saving of £600 million from the ESG by 2019 to 2020. Local authorities will receive transitional ESG funding from April 2017 to August 2017. The general funding rate will then be removed from September 2017 and this equates to £1.736m part year or £2.975m per annum for the LA. Some academies will have protection, depending on when they converted and how much ESG they received upon conversion. This would remove approximately £2.477m from current Academy budgets when the transitional protection ceases.

Retained Duties The Retained Duties ESG will transfer into the Central Schools Block Budget from 2017/18 and require the Schools Forum to approve the line by line expenditure To enable Somerset’s Forum to make this decision we are asking individual schools and academies for views on retaining up to £15 per pupil per annum The publication provided gives details of the planned expenditure for Retained Duties in 2017/18 which is £1.3m and equates to £19.61, more than the allocation of £15 per pupil. Any cost above £15 per pupil will be funded from the LA budget

Retained Duties Director of Children’s Services £125,700 Strategic Planning £386,200 Finance £155,800 Religious Education (SACRE) £7,500 Education Welfare £408,300 Asset Management £218,300

General Duties General duties are specific responsibilities that local authorities hold for maintained schools only. In order to ensure continued delivery of these functions, funding can be retained centrally from maintained schools with agreement of the schools forum. A breakdown of the general duties currently undertaken by the local authority on behalf of maintained schools is included below and within the publication provided. The total cost in 2017/18 will be £361,900, equivalent to £10.20 per pupil. The cost in 2017/18 will only apply from September and therefore maintained school contributions will be required for 7/12th of the financial year, equivalent to £6 per pupil.  

General Duties Finance £49,300 Internal Audit £52,800 Teachers Pensions £5,800 Human Resources £36,400 Health & Safety £100,200 ICT £10,300 Governor Services £30,100 Education Welfare £34,100 Moderation £42,900

General Funding Grant In the School and Early Years finance regulations the statutory duties remain, however the DfE are due to consult on changes shortly. There is unlikely to be publication of the outcomes of the consultation prior to the DfE deadline to confirm the ISB on 20th January 2017 Implications: The LA has to continue to fulfil it’s statutory duties and cannot afford to do so within the LA budget Change the service Charge for the service Cease these statutory duties or other duties to the same value

Options: The DfE are anticipating that maintained schools will agree to fund these services that they value through their delegated budgets or from within the Central Schools Budget Options: The LA has to find LA budget to fund services – impact on all other non statutory services, with costs passed to schools or services to cease Maintained Schools agree to de-delegate funds to pay for services Central Schools Budget is reduced and money allocated to all schools – maintained schools to de-delegate the amount required to deliver general duties (2017/18) Combination of the above

Options After meeting the costs of the funding formula for pupil numbers and updated pupil and school characteristics, there is some unallocated funding. This is sufficient to provide an additional £10 per pupil in 2017/18 financial year for maintained schools and a similar figure for academies for the academic year. This would be equivalent to the full year amount required by Somerset to continue to fund it’s general duties for maintained schools and for academies to partially offset the loss of the ESG. As the grant ceases in September 2017 only 7/12th is required by the LA in 2017/18, equivalent to £6 per pupil. An alternative use for the unallocated ISB would be to partially reduce the HN overspend from 2016/17 which if not repaid will impact on the future level of HN funding received by schools and academies.