1. School Funding Reform Schools Forum 10 October 2012

2. Agenda Why are we doing this? What we’ve done Outcomes Our task

3. Background Next steps towards a fairer system published at the end of March 2012. Response to earlier consultations on changes to school funding. No national reform of school funding at this stage but there are significant changes to the way funding is driven out locally Reforms must be implemented for April 2013

4. 1. National funding formula ‘On hold’ until the next spending review - post general election, likely Autumn 2015? No increase to the funding received through the Dedicated Schools Grant (DSG). Guaranteed unit of funding per pupil £4,746 frozen since 2011 Current reforms are about changing the way this funding is distributed locally

5. 2. Changes to the way local areas are funded DSG will be split into three notional blocks:- 1.Schools – funding for mainstream academies and maintained schools distributed through a simplified local funding formula. Based on October 2012 pupil census data. 2.High needs – funding for pupils and students with high SEN distributed through a ‘place plus’ approach. Based on planned 2012-13 spend. 3.Early years – funding for free 15 hour entitlement for 3 and 4 year olds distributed through early years single funding formula (EYSFF). Based on January 2012 census, updated for 2013 and 2014 pupil numbers.

6. 3. Simplification of the local funding arrangements Changes to the Schools Forum - school and academy membership to broadly represent pupil population at September 2012. 1 secondary : 5 academy : 7 primary plus additional governor representation Non schools membership (PVI, 14-19,diocesan and trade unions) remain unchanged Only school, academy, governor & PVI can vote on proposals for the local funding formula

7. 3. Simplification of the local funding arrangements Simple, fair and transparent local funding formula – aim for equivalent and consistent funding between schools and academies Allowable factors being reduced from 37 to 12, of which only 9 apply in Nottinghamshire. Majority of factors, two-thirds are pupil led. Local funding formula has to be agreed and submitted to the EFA by 31 October 2012

8. 4. Funding pupils and students with High Needs ‘Place plus’ approach to ensure that all providers are funded on an equivalent basis for pupils with high needs. ‘Place’ - Mainstream settings - first £10,000 covered through basic entitlement and notional SEN budget in formula. Specialist settings receive fixed £10,000 per planned place. ‘Plus’ – top up based on the needs of the pupil

9. 5. Funding for early years All providers of free early education will be funded by the local authority on the EYSFF No significant changes to the current EYSFF. Continue to be based on termly headcounts. Free early education for two year olds will transfer to the DSG from September 2013.

10. Our approach to the reforms Nottinghamshire is a high delegating authority Significant protection and investment in school budgets from the County Council e.g. cost of academy deficits, job evaluation Campaigning through the f40 group for fairer levels of funding across the country Commitment in Nottinghamshire to ensure that any losses are minimised - no school or academy will lose funding on a per pupil basis in 2013/14

11. Our approach to the reforms Five key themes were established: 1.Equitable funding between schools 2.Funding follows the pupil 3.Minimise turbulence 4.Protection for small schools 5.Use local flexibility where appropraite

12. Current funding system Dedicated Schools GrantIndividual school budgets Schools’ budget Non schools’ budget Distributed by local funding formula to individual schools and academies School A Pupil units Pupil retention grant Personalised learning Workforce remodelling Teacher pay grant Block allocation Rental of premises Split sites Infant class size School meals Activity led funding Amalgamation funding Admissions Salary support Salary protection Historical grants SEN Ethnicity High pupil turnover Premises Water 5% protection Rates

13. Reformed funding system New funding system changes the method of distribution Dedicated Schools Grant Individual school budgets Schools block High Needs block Early Years block Distributed by local funding formula to individual schools and academies School A Per pupil funding (mandatory) Deprivation (mandatory) Looked after children (optional) Low cost, high incidence SEN (optional) English as an additional language (optional) Pupil mobility (optional) Lump sum (optional) Split sites (optional) Rates (optional)

14. Local funding formula Mapping of existing factors to new allowable factors – aim to preserve existing funding levels where appropriate e.g. deprivation, SEN Proposal to maintain existing funding ratio of the basic per pupil entitlement between primary and secondary phases of 1 : 1.39 (in line with national average) Current proposals show a shift in funding from secondary to primary of £7.5m – why?

15. Local funding formula Removal of historical grants factors means funds can no longer be targeted at individual schools - particular impact on the secondary phase Removal of premises allocations - impact on larger schools Any lump sum value must be the same for all schools irrespective of size or phase. The higher the lump sum, the less there is to distribute through the per pupil entitlement

16. Local funding formula Lump sum intended to cover minimum costs of running a school – average £89,000 for our small schools Shift in funding can be addressed in two ways - alter the lump sum value or change the primary to secondary ratio

17. Protections and limits to gains DfE recognition that moving to the new local funding formula creates turbulence National protection provided through minimum funding guarantee (MFG) – set at minus 1.5% per pupil for 2013/14 and 2014/15 Further minimise this through a local transition package over 3 years – achieved through a gains cap to minimise losses and additional County Council funds

18. Protections and limits to gains Gains cap works by allowing a maximum gain on the per pupil level of funding - funds generated by the cap are redistributed through the basic per pupil entitlement Gains cap tapered on a sliding scale over three years – proposed 5% in 2013/14, 7.5% 2014/15 and 10% in 2015/16 Additional funding provided from the County Council in 2013/14 to support the transition process

19. Local funding formula – calculates a total amount of funding per school or academy Gains cap – recycled back into the formula for distribution Temporary additional County Council funding Protections and limits to gains Minimum funding guarantee – minus 1.5% per pupil

20. Next steps 12 October – consultation closes 16 October – extraordinary meeting of Schools Forum to agree local funding formula for 2013/14. If no resolution achieved then additional meeting can be organised, but this must take place by 31 October. 31 October – proposed local funding formula goes to NCC Policy Committee pre-agenda. Local funding formula pro-forma submitted to the EFA (subject to formal approval) 14 November – Policy Committee approval of local funding formula.

21. Next steps December – EFA confirms pupil numbers for school and early years blocks, updated pupil characteristic datasets and DSG allocations for 2013/14 January – Updated local funding formula (based on actual pupil numbers and DSG) submitted to EFA for final approval by 18/01. Additional Schools Forum meeting required for approval w/c 07/01 February – Maintained school budgets calculated by LA and issued 20/02 March – Academy budgets issued by EFA 31/03