1. Sunderland Schools Funding 2017/18 and beyond
Schools Budgets
Sunderland Schools Funding
2017/18 and beyond
David May
Strategic Finance Manager
January 2017

2. Schools Revenue Funding
Schools Budgets
Schools Revenue Funding
A number of funding sources, including the Education Services Grant, have been amalgamated into the Schools Block with the per pupil unit of Funding increasing from £4, to £4,
The October 2016 census data shows that pupil numbers have increased by 295 pupils, with funding increased by £1.941m, from £ m to £ m.
Retention of the Minimum Funding Guarantee – funding per pupil cannot drop by more than 1.5% per year.
No change in Pupil Premium Rates

3. High Needs and Early Years Funding
Schools Budgets
High Needs and Early Years Funding
High Needs Funding
Nationally additional £130m increased funding in /18 with Sunderland receiving £0.440m which increased funding from £22.748m to £23.188m.
Early Years Funding
New Funding Formula 2017/18

4. School Funding Formula
Schools Budgets
School Funding Formula
Datasets are provided by Education Funding Agency (EFA) from the October 2016 census;
LA cannot change these data sets but considers the impact on its local formula and funding values;
Changes made to 2017/18 Funding Formula:
IDACI
Prior Attainment
Additional funding to be distributed through Basic Entitlement for Primary and KS4

5. IDACI – Income Deprivation Affecting Children Index
Schools Budgets
IDACI – Income Deprivation Affecting Children Index
Dataset updated every 5 years by DCLG
Most recent dataset update was included for 2016/17 budgets
EFA recognised that this created ‘unexpected and unhelpful turbulence in budgets at the latter stages of the local formula setting process’
Considered concerns and views expressed from the first stage of the NFF consultation
New update to IDACI banding methodology for 2017/18
Return the bands to a similar size (in terms of proportion of pupils in each band) as in 2015/16
Bands A – G (rather than 0 – 6). Band A being most deprived

6. IDACI – Income Deprivation Affecting Children Index
Schools Budgets
IDACI – Income Deprivation Affecting Children Index
IDACI data has been refreshed and the new bands included
Only consideration for the Schools Forum was the value attached to each IDACI band
The updated dataset received in December 2016 with the additional pupil numbers increase the funding to be distributed by £0.114m

7. IDACI – Income Deprivation Affecting Children Index
Schools Budgets
IDACI – Income Deprivation Affecting Children Index

8. Schools Budgets
Prior Attainment
An optional factor, that acts as a proxy indicator for low level, high incidence SEN
2016 KS2 assessments are the first which assess the new more challenging curriculum
DfE flagged that a higher number of the year 7 cohort in financial year 2017/18 will be identified as having low prior attainment at a national level
National weighting will be applied that does not disproportionally influence the overall total
LAs are not able to change the weighting but can adjust their secondary low prior attainment unit value, which may limit significant turbulence
In updating the formula the new data distributed £0.996m based on the existing unit value of £ The funding allocation associated with this factor is £1.070m. The unit of value has been increased to £406.06

9. Additional Funding to be Distributed
Schools Budgets
Additional Funding to be Distributed
The quantum to be distributed through the Schools Funding Formula is £ m
The formula with the changes to Pupil Numbers, FSM6, IDACI and Prior Attainment distributed £ m, leaving £0.636m.
Agreed that remaining funding would be distributed through the Basic Entitlement for Primary and KS4. The change in rates is shown below:
2016/17
2017/18
Primary
2,918.61
2,942.34
KS3
4,316.72
KS4
4,596.33
4,617.84

10. Schools Block Centrally Retained Services
Schools Budgets
Schools Block Centrally Retained Services
The following items can be centrally retained before allocating formula but no new commitments or increases in expenditure from 2015/16, without the approval of the EFA
Schools Forum approval is required to confirm the amounts on each line before approval is sought from EFA for any changes £m
Admissions
0.164
Servicing Schools Forum
0.045
Termination Of Employment Costs
0.245
Growth Fund
0.105
Falling Rolls Fund
0.050
Copyright Licencing
0.184
Existing Centrally Retained Deductions
0.793
New Retained functions transferred into DSG
0.580
Total Centrally Retained Deductions
1.373

11. Schools Budgets
Licensing
The cost of the licenses are funded from the centrally retained schools block. Licenses have been arranged under a national contract with the following organisations for all schools and academies:
The Copyright Licensing Agency
The School Printed Music Licence
The Newspaper Licensing Agency
The Educational Recording Agency
Public Video Screening Licence
Motion Picture Licensing Company
Performing Rights Society
Phonographic Performance Licence
Mechanical Copyright Protection Society
Christian Copyright Licensing (International) Licence

12. Licensing The licenses arranged cover:
Schools Budgets
Licensing
The licenses arranged cover:
Print & Digital Copyright content in books, journals and magazines
Printed music
Copyright content in newspapers and magazines
Recording and use of copies of radio and television programmes
The showing of films
Payments for musical performances of covered work
Rights to make CD’s and DVD’s containing copyright music
Hymns and other Christian music
The local authority has provided all schools and academies with a copy of the factsheet on Copyright licencing, provided by the DfE which provides information for schools for 2017/18.

13. Education Services Grant (ESG)
Schools Budgets
Education Services Grant (ESG)
Retained duties ESG – paid to LA for all duties that they undertake for all schools and academies in their area
General ESG – paid to LA for functions undertaken for their own schools, and paid directly to academies for the same functions that they carry out themselves
LA funding for General ESG to cease from September 2017
Academies phased reduction up to 2020
Operational guide for 2017/18 allows LA to withhold funding for LA maintained schools, in order to replace lost grant from September 2017
Change allows DfE to make a saving by cutting the grant (LA=£389.9m), but it will cause an immediate pressure for LA and Schools and Academies
From 2017/18, the retained duties will transfer into the Schools Block

14. Schools Budgets
Pupil Premium 2017/18
Pupil Premium is only paid to those children registered to claim free school meals
DfE will hold schools accountable by:
Scrutiny of performance tables
Requiring schools to publish online how they have used the Pupil Premium

15. Pupil Premium 2017/18 Pupil Premium Rates for 2016/17 Primary £1,320
Schools Budgets
Pupil Premium 2017/18
Pupil Premium Rates for 2016/17
Primary £1,320
Secondary £935
Looked after Children (LA) £1,900
Post Looked After Children £1,900
Service Children £300
Pupil Premium is calculated using the January 2016 school census data, final allocations will not be confirmed until late Summer 2016
Early Years Pupil Premium rate is based on £0.53/child/hour no further announcements for changes in 2016/17

16. Apprenticeship Levy (Handout)
Schools Budgets
Apprenticeship Levy (Handout)
Implementation from April 2017
Applicable to all employers with a pay bill of more than £3m
Employers able to access funding for apprenticeship training and assessment against an approved apprenticeship framework.
Impact for Maintained Schools – current estimate of £300k per annum
Payable through PAYE, similar to NI and Superannuation
Who Pays the Levy
Community Schools;
Foundation and VA schools
Academies
Public Sector Duty

17. New Funding for School Improvement
Schools Budgets
New Funding for School Improvement
Government announced new funding to address underperformance and help ensure every child has a good school place
From September 2017 a £50m a year fund for LA to continue to monitor and commission school improvement for low performing maintained schools
A new £140m Strategic Improvement Fund for academies and maintained schools to target resources at schools in need of support to drive up standards
Education Endowment Foundation (EFF) has also committed to spend a further £20m over the next 2 years to scale up and disseminate evidence based programme and approaches
Sits alongside a wide range of other initiatives aimed at supporting school improvement, including:

18. New Funding for School Improvement
Schools Budgets
New Funding for School Improvement
£60m investment to pilot a series of Opportunity Areas aimed at looking at ways to improve the life chances of young people
£41m maths mastery programme – expansion of programme across primary's
£13m regional academy growth fund supports successful academy trusts to grow and improve standards in underperforming schools
Teaching and Leadership Innovation Fund worth £75m over 3 years focussed on supporting teachers and school leaders in challenging areas to develop
Government’s ambition remains that all schools will become academies where leaders collaborate to drive improvement
Number of good or outstanding places has risen by over 420,000 in the last year

19. National Funding Formula (NFF)
Schools Funding
National Funding Formula (NFF)
In 2018/19 the DfE will calculate individual Schools NFFs but pay the allocation to the LA
From 2019/20 the DfE will fund all schools direct
Additional funding of £345m has been provided nationally to support change in formula, decrease from £500m promised as part of Mar-16 budget.
Key issue is growth in formula is 1.3% for period 2015/16 to 2019/20 but cost pressures have been calculated at 8% up to 2019/20

20. The building blocks and factors
The proposed formula factors have been grouped into four ‘building blocks’:
Mobility originally omitted – now restored but on historic spending until indicator can be reviewed.
Looked after Children factor transfer to pupil premium plus to go ahead

21. Reasons for Weightings
Schools Funding
Reasons for Weightings
Maximise % allocated to pupil-led factors
Basic Entitlement currently includes an element of deprivation funding
Increase total spend on additional needs factors, and focus on families ‘just about managing’ via IDACI
Low Prior Attainment – key in identifying support needs

22. Sunderland Schools impact at a glance
Schools Funding
Sunderland Schools impact at a glance

23. Schools Funding
Sunderland Impact
Illustrative examples have been provided to schools by DfE
Characteristics of each individual School/Pupil determine the impact of the funding formula

24. Sunderland Impact Response to the Consultation
Schools Funding
Sunderland Impact
Response to the Consultation
Formula does as intended but 2 Key Issues:
Additional funding is required when implementing significant change to minimise the impact;
Sunderland has always invested in Education but others have not, as shown by significant reduction in Basic Entitlement;

25. Consultation Questions
Schools Funding Reform – January 2017
Consultation Questions
In designing our national funding formula, we have taken careful steps to balance the principles of fairness and stability. Do you think we have struck the right balance?
Do support our proposal to set the primary to secondary ratio in line with the current national average of 1:1.29, which means that pupils in the secondary phase are funded overall 29% higher than pupils in the primary phase?
Do you support our proposal to maximise pupil-led funding, so that more funding is allocated to factors that relate directly to pupils and their characteristics?
Within the total pupil-led funding, do you support our proposal to increase the proportion allocated to the additional needs factors (deprivation, low prior attainment and English as an additional language)?
Do you agree with the proposed weightings for each of the additional needs factors?

26. Consultation Questions
Schools Funding Reform – January 2017
Consultation Questions
6. Do you have any suggestions about potential indicators and data sources we could use to allocate mobility funding in and beyond?
7. Do you agree with the proposed lump sum amount of £110,000 for all schools?
8. Do you agree with the proposed amounts for sparsity funding of up to £25,000 for primary schools and up to £65,000 for secondary, middle and all-through schools?
9. Do you agree that lagged pupil growth data would provide an effective basis for the growth factor in the longer term?
10. Do you agree with the principle of a funding floor that would protect schools from large overall reductions as a result of this formula? This would be in addition to the minimum funding guarantee.

27. Consultation Questions
Schools Funding Reform – January 2017
Consultation Questions
12. Do you agree that for new or growing schools the funding floor should be applied to the per-pupil funding they would have received if they were at full capacity?
13. Do you support our proposal to continue the minimum funding guarantee at minus 1.5% per pupil? This will mean that schools are protected against reductions of more than 1.5% per pupil per year.
14. Are there further considerations we should be taking into account about the proposed schools national funding formula?

28. Decisions on High Needs Block NFF
Schools Funding Reform – January 2017
Decisions on High Needs Block NFF

29. Funding for Specialist Provision
Schools Funding Reform – January 2017
Funding for Specialist Provision
Special schools still funded at £10k place-led plus top up payments for pupils on roll
Mainstream schools with Provisions will receive basic entitlement (AWPU) funding for pupils and £6k place-led plus top up payments for pupils on roll
Separate hospital education allowance
Alternative provision not a separate allocation but only population and deprivation factors applied .

30. Schools Funding Reform – January 2017
Issues
Detailed analysis is required to understand make up of the formula and the timing when Sunderland will receive its full allocation
Year 1 HNB increase by £0.584m, when comparing to 2016/17
2017/18 allocation increased by £0.440m ?
Fully Implemented increase by £3.7m to £25.584m
Need to consider
Impact of Free Alternative Provision School
Potential New Autism school
Increase in Numbers
Timing of funds linked to need, as 50% of 2017/18 Historic funding, frozen for at least 4 years

31. HNB – Consultation Questions
Schools Funding Reform – January 2017
HNB – Consultation Questions
In designing our national funding formula, we have taken careful steps to balance the principles of fairness and stability. Do you think we have struck the right balance?
We are proposing a formula comprising a number of formula factors with different values and weightings. Do you agree with the following proposals?
• Historic spend factor – to allocate to each local authority a sum equal to 50%
of its planned spending baseline
• Basic entitlement – to allocate to each local authority £4,000 per pupil
We propose to use the following weightings for each of the formula factors listed below, adding up to 100%. Do you agree?
• Population – 50%
• Free school meals eligibility – 10%
• IDACI – 10%
• Key stage 2 low attainment – 7.5%
• Key stage 4 low attainment – 7.5%
• Children in bad health – 7.5%
• Disability living allowance – 7.5%

32. HNB – Consultation Questions
Schools Funding Reform – January 2017
HNB – Consultation Questions
Do you agree with the principle of protecting local authorities from reductions in funding as a result of this formula? This is referred to as a funding floor in this document.
Do you support our proposal to set the funding floor such that no local authority will see a reduction in funding, compared to their spending baseline?
Do you agree with our proposals to allow limited flexibility between schools and high needs budgets in ?
Do you have any suggestions about the level of flexibility we should allow between schools and high needs budgets in and beyond?
Are there further considerations we should be taking into account about the proposed high needs national funding formula?
Is there any evidence relating to the eight protected characteristics as identified in the Equality Act 2010 that is not included in the Equalities Analysis Impact Assessment and that we should take into account?

33. Central School Services Block
Schools Funding Reform – January 2017
Central School Services Block
Divided between:
Ongoing responsibilities – funded on £28.61 per pupil plus £11.62 per Ever6 FSM (both adjusted for area costs)
Historic commitments – on basis of 2017/18 budgets

34. Transition for Central School Services Block
Schools Funding Reform – January 2017
Transition for Central School Services Block
Ongoing responsibilities:
Protection at -2.5% per pupil in 2018/19 and 2019/20
Cap on gains at 2.4% in 2018/19, reset annually depending on composition of the block, suggests a review of LA’s functions
For Sunderland, it if had been introduced in 2016/17:
We would have gained £0.207m for ongoing responsibilities
But capped at +2.4% equates to £0.028m
Compensate for reductions in retained duties grant

35. DSG – Early Years 2017/18
Early Years Funding

36. DSG - Early Years Funding
Final funding allocations for are based on Jan-17 and Jan-18 census data, with final notification to LA in Jun-18
LA are funded Jan-17 & Jan-18 with Providers funded termly with significant variations as take up increases throughout the year.
Funding floor ensures that no LA can face a reduction of greater than 10% against its baseline.
All LA should be funded by the EYNFF by
EYPP continues to be paid within the DSG and there are no funding changes for the EYPP for The full 15 hours entitlement is £ or £0.53 per hour
Funding for the most disadvantaged two-year olds is already allocated on a formulaic basis, funding rates to be paid to LA have increased from £5.09 to £5.39.

37. LA passing funding to providers
DSG – Early Years 2017/18
LA passing funding to providers
Minimum threshold on the proportion of funding that the LA must pass on to providers - 93% 2017/18 then 95% 2018/19.
Local authorities are required to set a universal base rate to fund all providers for each hour of the free entitlement, by no later than 2019/20.
Supplementary funding for maintained nursery schools for the duration of this parliament.
Limited set of permitted funding supplements, capped at 10% of the planned value of funding to be passed to providers.
Deprivation (Mandatory)
Flexibility
Quality
Rural / Sparsity
English as an Additional Language (EAL)

38. DSG – Early Years 2017/18
Provision for disabled children and children with special educational needs (SEN)
Legislation prescribes that LA must ensure that disabled children entitled to a place are found suitable provision.
Two new measures are being introduced for 2017/18 to support children with disabilities or SEN:
Disability access fund - the child is in receipt of child disability living allowance and receives free early education. (£615 per year)
SEN inclusion fund - LA should target the fund at children with lower level or emerging SEN. Further consideration is required to develop a new system

39. Indicative Allocation of EY Block
DSG – Early Years 2017/18
Indicative Allocation of EY Block
Funding Settlement
DSG
Early Years
2016/17
2017/18
2018/19 £m
Universal entitlement for 3&4 year olds
13.007
12.356
11.703
Illustrative Nursery Funding
0.000
0.758
Illustrative Disability Access Funding
0.086
Illustrative EY Pupil Premium
0.333
0.205
13.340
13.405
12.752
3 & 4 Year Old - Additional Hours
1.876
3.046
15.281
15.798
2 year old funding
2.783
3.014
16.123
18.295
18.812

40. Indicative Allocation of EY Block
DSG – Early Years 2017/18
Indicative Allocation of EY Block

41. DSG – Early Years 2017/18
Agreed Formula 2017/18
Universal Base Rate (90%) – Single Rate all be paid to all providers at £4 per hour
Supplementary Factors (Capped at 10%)
Deprivation (Mandatory) - IDACI Rates £113 - £550
Flexibility – A rate of £0.44 per pupil per hour to apply from April to those children taking up the flexible offer:
Summer Term – Existing criteria
September Paid to providers offering 42 weeks or more per year
Rural Schools Protection – Using existing criteria - Sustainability
Nursery Funding (Mandatory)
Transitional Protection – Hourly Rate /18 only

42. Final Proposal – Cost Implication
DSG – Early Years 2017/18
Final Proposal – Cost Implication

43. Early Years - Next Steps
DSG – Early Years 2017/18
Early Years - Next Steps
Indicative budgets provided based on 2016 data. Early Years Census is held on 19th January, LA will have data available on the 22nd February that will allow further check on the workings on the formula
SEN Inclusion Fund working group to be established
Final report on SEN Inclusion fund to the Schools Forum on 16th March 2017

44. Key Issues for Consideration by Schools and Academies
Budget Planning
Key Issues for Consideration by Schools and Academies

45. Funding Pupil Number Changes Infant FSM impact on Pupil Premium
Budget Planning
Funding
Pupil Number Changes
Infant FSM impact on Pupil Premium
Impact of ESG funding changes on Academy budgets
Impact of NFF
Impact of Inflation

46. Financial Management Impact of moving to a National Funding Formula
Budget Planning
Financial Management
Impact of moving to a National Funding Formula
Further scrutiny on use of school and academy balances
Need to make decisions to protect school long term
Increase in financial notices to improve affecting academies as well as maintained schools

47. Good Financial Management
Budget Planning
Good Financial Management
Informed decision making
Balanced budget
Accurate and robust financial reports presented to Governors
Good Links between Personnel and Finance committees of Governing Bodies
Long term fully costed school development plans

48. Timetable Date Event 20th January 2017
Deadline for submission of final 2017/18 APT proforma to EFA
28th February 2017
Deadline for confirmation of schools budget shares to maintained schools
31st March 2017
Deadline for confirmation of General Annual Grant to Academies opened by 9th January 2017
June 2017
Early Years Block updated for January 2017 early years pupil numbers
June 2018
Early Years Block updated for January 2018 early years pupil numbers

49. Statutory Publication of Budget Information
Sunderland City Council : SBFF
Statutory Publication of Budget Information
Must be published by 28th February EFA must publish by 31st March 2017 for Academies. Planned date for publication is w/c 20th February 2017.
Information provided for maintained schools:
Formula Budget Statement
Pupil Premium Statement
Early Years Indicative Funding Statement
Indicative High Needs Pupil Statement
Guidance on Budget Process, Early Years & High Needs Funding
Information for Academies:
Early Years & High Needs Indicative Funding Statements
Guidance on Early Years & High Needs Funding

50. Summary
Any Questions?