SCHOOLS NorthEast School Business Management Conference National Funding Formula 23 June 2016 David Shirer Durham County Council

Consultation First stage of consultation: – General principles – Started March 2016 – Ended April 2016 Second stage: – More detail about the formulas – Not yet started – Opportunity for individual feedback

National Funding Formula Funding of mainstream primary and secondary schools Will replace local formulas Will directly affect funding for individual schools from (hard NFF) Will directly affect funding for local authorities from (soft NFF) May cause changes to local formulas in and Wider changes to the role of local authorities

Hard/Soft NFF Both are national funding formulas Difference is how they are used: – Hard NFF determines formula funding for individual schools Schools funded the same across the country From – Soft NFF determines funding for local authorities Local authorities continue to set a local formula From to

Soft NFF to hard NFF Next two years will be run-up to hard NFF Opportunity to influence hard NFF Soft NFF indicative of hard NFF for individual schools? – Sensitive to pupil numbers – MFG / capping difficult to forecast

Soft NFF The EFA will use the soft NFF to calculate funding for each school and academy in each LA, including MFG/capping The total for schools and academies in each LA will form that LA’s Schools Block allocation of the Dedicated Schools Grant (DSG)

Soft NFF Schools Block Must be distributed to schools through a local formula – cannot be moved to other blocks (Early Years or High Needs) Local formula set in the usual way – consultation with schools and schools forums Schools will be able to compare soft NFF allocation with local formula allocation ( & )

Soft NFF and local formulas May cause significant changes in allocations to individual authorities Authorities may have to review local formulas if existing formula is not affordable No MFG for authorities Possibility of local variations to MFG - reduced protection to make formula affordable? Schools Forum approval?

Setting local formulas Still a local authority decision after consulting schools and forums Comparison with soft NFF - options – Maintain local formula? – Move towards soft NFF? Influence on hard NFF?

Soft NFF factors No details yet, but March consultation identified proposed factors Based on factors allowed in current formulas Opportunity for schools, forums and authorities to influence the formula – relative weightings – Primary : secondary – AWPU : deprivation/prior attainment/EAL – Pupil-led : lump sum/sparsity

Soft NFF factor criteria To be included, factors should be: – Linked to significant costs in schools – Make a significant difference to the distribution of funding between schools – Use accurate, quality-assured data, avoiding perverse incentives to for schools to increase funding – Link to pupil characteristics where possible

Basic per-pupil funding AWPU – Primary – KS3 – KS4 No differentiation for KS1 and KS2 More funding for KS4

Socio-economic deprivation Current Free School Meals entitlement History of FSM entitlement (Ever6) – EFA looking at Universal Credit – income which will trigger FSM entitlement – Auto-enrolment? IDACI – EFA aware of impact of change in dataset – implications for bands? Balance of funding – between FSM and IDACI?

Pupil Premium No plans to incorporate into formula during this parliament No plans to change methodology Different to deprivation funding – PP is targeted to raising the attainment of eligible pupils – Deprivation funding is a broader measure of the need for additional resources at school level

Low prior attainment Criteria – Primary – alternative to EYFSP? – Secondary – expected standard at KS2 – revised standard Summer 2016

English as an Additional Language Proposing to use EAL 3 (pupils recorded on the census as EAL in past three years) Looking at whether to introduce a new measure of English language proficiency

Lump sum All schools to have a lump sum? To benefit small schools Recognises fixed costs that are a greater % of spending by small schools No clear pattern in local formulas – seeking views Vary within phases: – Size, rurality, deprivation?

Sparsity factor For small rural schools Distance to second nearest school As the crow flies Pupils’ nearest school (i.e. not necessarily the one that they attend) Maximum of £100,000 per school

Sparsity proposal Continue current arrangements Use taper option Allow applications to increase the maximum lump sum Seeking feedback on how this works in practice

Sparsity feedback Concerns: – Clarity over criteria – Distance as the crow flies Improvements – take account of: – Distance by road to the nearest alternative school? – Deprivation – Cost of funding home to school transport to alternative schools

Other factors – Rates – Split-sites – PFI – Exceptional premises Proposal is to use historic information in NFF Alternative using actual figures? Exempt schools/academies from rates?

Growth funding Soft NFF allocations based on historic spend in and ? Measure of actual need would work better? To be included in hard NFF from , but EFA seeking views about how this should work Incorporates falling rolls fund

Area cost adjustment (ACA) Based on: – General Labour Market data; or – A combination of GLM and teachers’ salaries Proposal is for this to be a multiplier to formula funding Multiplier for schools in the North East likely to be zero

ACA considerations No negative adjustment to formula funding, but will come out of the total funding available, so other formula funding likely to be lower Doesn’t take account of difficulty of recruiting high quality teaching staff: – Rural areas – Areas suffering significant deprivation

Excluded factors Not proposing to include: – Looked after children & post LAC children – continue with LAC Pupil Premium – Mobility – concerns about quality of data – Historic post-16

Minimum Funding Guarantee First stage consultation refers to a national MFG Proposals as part of second stage consultation No indication that protection will reduce but, emphasis is on under-funded schools gaining through the national formula as quickly as possible

Cap on gains Gains will have to equal MFG protection Simple cap – maximum percentage increase Combination: – Lower cap – Greater increases for most under-funded schools Preference is for the simple cap Neither option has an implication for the amount of MFG protection

De-delegation To end after Replacement with SLAs? – Contingencies – Behaviour support services – Underperforming ethnic groups / bilingual learners – Free school meals eligibility – Insurance – Museum and library services – Licences/subscriptions – Staff costs supply cover (e.g. trade union facility time)

Local authority functions Currently funded by retention from Schools Block / Education Services Grant (ESG) New Central Services Block from Planned savings of £600m = significant reduction in funding Possible retention of some maintained schools DSG? Functions that will/may cease in the future? Implications for schools and academies?

Changes to local authority functions Consulting on changes to local authority functions Role in school improvement to cease from September 2017 Other services, for which ESG funding will cease after : – Music services – Visual and performing arts, – Pupil support – Outdoor education

Other local authority responsibilities School admissions Servicing of schools forums Fees to independent schools for pupils without SEN Education welfare services Asset management Statutory and regulatory duties

SEN Funding Currently historic funding To be based on a formula from Element of protection for five years Encouraging provision in mainstream schools Notional SEN consultation SEN units in mainstream schools

High Needs Formula Basic unit of funding – pupils and students in specialist settings Population – children and young people 2 – 18 yo Disability living allowance Children in bad health KS2 low attainment – not achieving level 2 in reading KS4 low attainment – not achieving 5 A* GCSEs FSM – current eligibility IDACI spending level

Notional SEN Not seen as helpful and no consistency between authorities Replace with guidance on how to determine allocation to SEN Decision for schools Implications for targeted support by LAs?

SEN units in mainstream schools Current funding is £10,000 per place but no formula funding Funding to be £6,000 per place plus formula funding Current method provides more certainty to allow schools to plan staffing of units Change census to record pupils in SEN units, so that they can be excluded from formula?