School funding reform – changes for Paper F Schools forums Autumn 2014 Presentation to the Sheffield Schools Forum Meeting on 18 September 2014

Fairer Schools Funding announcement Set out the Government response to the Fairer Schools Funding consultation in March this year and confirmed further reforms that we will make to schools funding system for These will come into effect for maintained schools from April 2015 and for academies/free schools in September It includes:  Minimum funding levels (MFLs) for local authorities  Changes to the sparsity funding factor  Confirmation that non-recoupment academies will become recoupable in  High needs funding policy changes  Confirmation of Minimum Funding Guarantee(MFG) of minus1.5% for

Minimum Funding levels in  The starting point is that all local authorities will be funded at least at the same cash level per pupil as in  We will then allocate an additional £390m (£40m more than set out in the consultation) to the least fairly funded local authorities.  Every authority will attract a minimum funding level (MFL) for the pupils and schools in its area.  If an authority already attracts at least these MFLs, we will not make any change to the amount of funding per pupil that it received.  If an authority attracts less than these MFLs for the pupils and schools in its area, we will increase its budget to meet these levels.

Minimum Funding levels in  It will be for the authority, in consultation with the Schools Forum to decide how best to design its local formula to meet local circumstances. Authorities will have the same freedom to set local formulae for their schools in as they did in  Individual schools and academies should therefore not expect that their funding will necessarily be at or above the MFLs.  That said, the expectation is that authorities look to delegate any additional funding they receive for to schools and academies.  It remains important that all schools engage early with their representatives on their Schools Forum to ensure their views are represented.

Sparsity funding factor in  The sparsity funding factor was introduced last year. In response to concerns raised, we are making minor changes to this factor for  The sparsity distance thresholds will be the same as the formula.  But the school size criteria will change. The number on roll criteria will be replaced by a new average year group size criteria.  A further change in is that authorities will be able to make an application to include an exceptional additional sum of up to £50,000 for very small secondary schools in sparsely populated areas.

Converting non-recoupment academies to recoupment in  Non-recoupment academies (mostly free schools and old academies) will form part of the authority’s formula submission to bring the modelling for these schools in line with other academies  This change does not impact on the way existing non- recoupment academies and free schools are funded by the Education Funding Agency. The calculation of funding by the Education Funding Agency and the calculation of a notional budget by the local authority are two separate processes.  Former non recoupment academies will now have equal access to some other central budgets such as the growth fund (if not funded on estimates) or the falling rolls fund.

High needs funding  We are not planning significant changes to high needs funding arrangements for  We are though making a small number of minor changes for We are simplifying the process leading to the allocations of place funding: –The place numbers used for the academic year 2015/16 will be the published numbers for 2014/15, with a limited process for handling exceptions. –Additional high needs funding for demographic growth to be allocated on the basis of: Extra places identified through the exceptions process, then A flat rate distribution per capita of the 2-19 population –All allocations to be finalised earlier – DSG for authorities in December, and place funding for schools in early 2015

High needs funding Improvements made to Alternative Provision (AP) funding: –AP places in free schools will be funded from a DfE budget for the first and second year the free school is open, but thereafter the cost will be met by deductions from the relevant authorities’ DSG in the same way that their DSG bears the cost of all other AP places. –We are consulting on regulations which would increase funding of AP places, from £8,000 to £10,000 per year from September If agreed, we expect to see reductions in the top-up funding for AP, so that this adjustment is cost- neutral for local authorities and schools. – We will make small changes to the schools forum regulations to increase the representation of special and AP academies and ensure that important issues concerning SEN and AP funding are discussed in the forum.

Education Services Grant (ESG)  The Chancellor announced in June 2013 that the Government would make savings of about £200m to the ESG in  The ESG announcement set out the Government’s response to a consultation earlier in the year on how to achieve the savings.  ESG is paid to local authorities and academies on a per pupil basis as an un-ringfenced grant. In the academic year 2014/15, academies receive the same basic rate per-pupil as local authorities but also receive a top-up of £27 per-pupil, bringing their rate up to £140 per-pupil. There is also a protection which limits the loss incurred by any academy as a result of ESG changes as a proportion of its total budget.  Local authorities receive additional funding (£15 per pupil) for the obligations that that they have to fulfil to both academies and maintained schools.

Education Services Grant (ESG)  For , the per pupil rate for retained duties for LAs remains at £15.  The 20% savings will be made from the ESG “general funding rate”, which will now be £87 per pupil.  There will be no top up for academies, but there will be continuing protection against large budget reductions. The protection will be set in tapered bands, so that academies that received higher ESG allocations after protections were applied in 2014/15 will be subject to a lower protection relative to their overall budget.

Timetable  Authority Proforma Tool (APT) issued in July.  Deadline for disapplication requests 30 September  Authorities to submit provisional APT by end October 2014, with a final return due in January  Total schools block allocation confirmed to authorities in December  High needs allocations confirmed to authorities in December  Allocations to academies and free schools (that open by January 2015) by end March 2015.