1. Budget Briefing Session for Governing Bodies
Becky McIntyre – Director Governance and Partnerships
Tracy Elliott –Strategic Lead Finance
LDC 1st March pm

2. Aims and Objectives Opportunity to ask questions!
Schools Finance position – National and Local
Update on National Funding Formula
School Funding - Dedicated Schools Grant
DSG – include EY, High Needs, Central Budget
School Funding pressures – national picture, local, include apprenticeship levy

3. National Audit Office Financial Sustainability of Schools
Key Points of the report
8% real terms reduction in per-pupil funding for mainstream Schools between 2014/15 and 2019/20 due to cost pressures
£3bn savings mainstream schools need to make by 2019/20 to counteract pressures
60.6% of secondary academies that spent more than their income in 2014/15
DSG – include EY, High Needs, Central Budget
School Funding pressures – national picture, local, include apprenticeship levy

4. National Audit Office Financial Sustainability of Schools
20,179 state-funded primary and secondary schools in England as at January 2016
95.7% of maintained schools’ income came from government grants in
£39.6 billion total schools budget in , comprising the Dedicated Schools Grant and pupil premium
£1.3 billion savings in procurement spending that the Department for Education estimates mainstream schools can make by to address cost pressures
£1.7 billion savings in workforce spending that the Department for Education assumes mainstream schools will need to make by to address cost pressures
11.6% of maintained schools had surpluses worth 15% or more of their annual income in

5. Local Position
2014/ schools planned to use part of their reserves to balance their budgets
In 2015/ schools planned to use reserves to balance their budgets
4 schools with Approved Deficit Budgets
42 maintained schools had surplus balances 2015/16
Overall school reserves
2014/15 £3.0m
2015/16 £2.9m
2016/17 Projected £2.2m
DSG – include EY, High Needs, Central Budget
School Funding pressures – national picture, local, include apprenticeship levy

6. National Funding Formula Background and Context
Policy direction towards ‘national’ funding remains
Use of national data sets for calculation of local funding formula allocations
No inflationary increase to schools funding for a number of years
Additional £390m funding identified for allocating to ‘least fairly funded’ local authorities allocated in remains

7. Background and Context cont…
November 2015 Spending Review:
Core schools budget protected in real terms
Per pupil levels maintained in cash terms
Savings of £600m from Education Services Grant
Plans to consult on a national funding formula for schools, early years and high needs early 2016

8. National funding formulae consultation
Stage 1 (March to April 2016): a vision for the future funding system as a whole and the principles that underpin it, including:
The design of the system
The role of the local authority
The factors to include in each funding formula (schools and high needs)

9. National funding formulae consultation cont….
Stage 2: detailed proposals for the design of the formulae and illustrations of the impact on local authorities and schools, including:
The weightings of the factors within the formulae
The limits on losses and gains under the formulae
Transitional protections
Detailed impact tables for every school and LA in England
Stage 2 open until 22 March 2017

10. National funding formulae consultation cont….
Proposals
Maintain primary and secondary ratio in line with current average
Maximise % of funding for pupil-led compared to school led factors
Increase total spent through additional needs factors (therefore slightly lower % for basic per pupil funding)
Step basic per pupil funding rates from KSA/KS2 to KS3 to KS4, in line with current practice

11. National funding formulae consultation cont….
Additional Needs proposals
Continue to have a substantial deprivation factor in addition to the pupil premium using both pupil level and area level data
Increase substantially the weighting of low prior attainment factor
Increase total spend on the English as an additional language factor
Protect local authorities current spend on mobility but work on a more sophisticated indicator

12. National funding formulae consultation cont….
School-led factors proposals
Provide a lump sum, but at a lower level than the current national average
Spend more on sparsity factor than in the current system
Fund premises factors on the basis of historic spend in 2018/19
Fund the growth factor on the basis of historic spend in 2018/19, but putting forward a proposal to adopt a lagged growth methodology from 2019/20.

13. National funding formulae consultation cont….
Stability for schools
Propose to include a funding floor so that no school can lose more than 3% per pupil overall
On transition – able to afford gains of up to 3% per pupil in the NFF year 1, and a further 2.5% per pupil in year 2.
Consulting on whether the MFG should reamin at -1.5% per pupil throughout.

14. National funding formulae consultation cont….
Detailed Information is available at school level
For maintained schools baselines comes from the 2016/17 Authority Proforma Tool and for academies from the 2016/17 academy allocations.
Overall indicative increase in school funding for North Lincolnshire of 1.8%

15. School Funding Dedicated Schools Grant
Currently 3 blocks
Schools Budget
High Needs Budget
Early Years Budget

16. School Funding Dedicated Schools Grant
Schools Budget
Individual school budgets based on the funding formula
Central Schools Budget
Historic Commitments
Admissions
Servicing of Schools Forums
National Copyright Licences
Former ESG retained duties
Growth Fund

17. School Funding Dedicated Schools Grant
High Needs
High needs funding supports provision for pupils and students with special educational needs and disabilities (SEND) from their early years to 25.  
Includes
Special School Funding
Pupil Referal Units
Top up funding for schools (maintained, academies and independent)
Alternative Provision
SEN Support Services

18. School Funding Dedicated Schools Grant
Early Years
Base Rate:  £4.00 per hour per child
Early Years Pupil Premium: 53 pence per hour per child
Deprivation: 5 pence per hour per child
Sufficiency Lump Sum: £7000/£3000
Disability Access Fund: £615 per annum

19. School Funding Dedicated Schools Grant
Early Years Pupil Premium Payable termly based on the children attending whose families meet the free school meal* criteria or for children that are or have been in the care of a local authority. 
Deprivation funding Compulsory supplement and is payable termly based on the Early Years Pupil Premium criteria.
Sufficiency Lump Sum A lump sum is payable where there is no other 0 – 5 year old childcare provision within 1 ½ miles of the provider and where the provider does not benefit from economies of scale. 
Disability Access Fund A lump sum payable for three and four year olds that are in receipt of Disability Living Allowance.  More information will be shared at the forthcoming PVI meetings and Schools Meetings regarding 30 hours. 

20. School Funding Dedicated Schools Grant
From 2018/19
New central schools services block
A per pupil formula is proposed for ongoing local authority responsibilities with an additional factor for deprivation
Comprises of £15 per pupil from retained Education Services Grant
Total local authority spend on relevant ongoing responsibilities (e.g. admissions, currently funded through DSG Schools Block)
Historic Commitments funded on basis of evidence

21. Considerations for Schools
Apprenticeship Levy
The charge for the apprenticeship levy is 0.5% where the employers paybill is more than £3m.
Deducted as a payroll cost in the same way as national insurance and superannuation
Schools that are required to pay the levy will need to make provision for the relevant cost in their individual budgets
Implications differ depending on the type of school
Superannuation
Potential reduction in the superannuation rate for maintained schools for the next three years due to improved fund performance

22. Considerations for Schools
School Meals