Budget Briefing Session for Governing Bodies Becky McIntyre – Director Governance and Partnerships Tracy Elliott –Strategic Lead Finance LDC 1st March 2017 6.30pm

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

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

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 2014-15 £39.6 billion total schools budget in 2015-16, 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 2019-20 to address cost pressures £1.7 billion savings in workforce spending that the Department for Education assumes mainstream schools will need to make by 2019-20 to address cost pressures 11.6% of maintained schools had surpluses worth 15% or more of their annual income in 2014-15

Local Position 2014/15 - 26 schools planned to use part of their reserves to balance their budgets In 2015/16 - 27 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

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 2015 - remains

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

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)

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

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

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

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.

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.

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%

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

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

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

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

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. 

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

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

Considerations for Schools School Meals