1. School Funding Formula 2015-16 (Agenda item 7)

2. Overview Provide an overview of the formula headlines Final schools funding formula 2015/16 Base Formula Plus Additional One Off Funding Vote on the formula

3. Timeline Oct 14 Formula factors and indicative rates were submitted to DfE by October 2014 deadline, and have been accepted. Dec 14 DSG settlement – 17 th December 2014 October 2014 data is used to calculate 2015-16 schools budgets made available by DfE. 20 Jan 15 Final formula rates submitted to EFA but agreed with EFA the possibility to update following the Forum meeting. Schools Forum Meeting. Late Jan / Early Feb 15 Provisional Schools Block budgets to be published on website

4. Pupil Number Change Changes in school pupil numbers in the Schools Oct 2014 census (excluding non- recouping academies) 2014/15 (October 2013 census) 2015/16 (October 2014 census) Change Reception Uplift104.5104.0(0.5) Primary59,546.561,165.51,619.0 Secondary35,291.034,834.5(456.5) SEN Units and Resourced Provision(581.0)(420.0)161.0 Total94,361.095,684.01,323 1,323 pupils £4,285.80 £5,670k addition to Schools Block

5. Schools Formula Funding 2015-16 Overview £mExplanation Schools Formula Funding 2014-15 389.3 Movements 9.6 Fairer Funding increase (£9.9m less £0.3m carbon reduction adjustment) 5.7 Additional DSG resulting from growth in pupils 1,323 extra pupils * £4,285.80 (see previous slide for details) 15.6 Additional funding for non-recouping academies to be adjusted following submission of APT in January 2015 to reflect final schools formula figures for non recouping academies 2015-16 (2.2) Transfers to other blocks (see next slide for details)(-£2.4m) and central savings (+£0.15m) Schools Formula Funding 2015-16 418.0

6. £m Increase in overall schools block allocation (net of carbon reduction deduction) 30.9 Fairer Funding Allocation to High Needs block (0.37) Fairer Funding Allocation to Early Years block (0.51) Fairer Funding Allocation – High Needs Top Slice (1.5) Total deduction to other blocks(2.38) Balance from central savings0.15 Total Schools Block Increase for Distribution to Schools 28.67 Funding to Allocate to Schools

7. Overview Schools Block increase to be allocated through the schools funding formula Schools Funding Formula only applies to primary and secondary schools, both maintained and academy including non recouping academies and University Technical Colleges 2015-16 schools formula applies to maintained schools from April 2015 and academies from September 2015 Unit rates for each factor remain unchanged except the AWPU (average weighted pupil unit) rates which have increased to reflect the increased fairer funding allocation (as agreed at the October 2014 forum meeting)

8. Further increases to the cap rate The final cap rate is 8.1% for 2015-16. This is an increase from the 6.65% proposed at the October Forum meeting (2014-15 cap was 4.52%). This increase enables schools to move more quickly to the funding generated by the formula. This benefits a number of school as set out in Appendix A.

9. Overview – Primary/Secondary funding ratio The overall primary/secondary rate across all local authorities is 1:1.27 (page 17 of the Schools Revenue Funding 2015-16 Operational Guide) In 2014-15 NCCs ratio was 1:1.33 The 2015-16 ratio for NCC is 1:1.34 Consideration of this ratio will be required for 2016-17. Should we aim in 2016-17 to be moving closer to the average ratio pending any move to a national formula? A forum working group will established to work on this with the authority

10. Impact of overall pupil changes In the last few years pupil numbers have grown in overall terms in the county. This has been made up of primary number increases and secondary reductions. In AWPU terms this means there are annual ‘savings’ as the secondary AWPU is higher, meaning funding has been ‘available’ to fund other pressures in the schools funding formula (mainly deprivation) In future years the secondary pupil numbers will also grow (DSG funding is at a set/average level) so less funding may be available to fund increases in non AWPU areas of the budget.

11. Future Pupil Number Changes Estimated numbers (Excl 6 th form)PrimarySecondaryTotal 14-15 academic year (October 14)61,42137,52098,941 15-16 academic year (October 15)63,12637,620100,746 16-17 academic year (October 16)65,06338,118103,181 17-18 academic year (October 17)66,44039,211105,651 18-19 academic year (October 18)67,53840,534108,072 Total estimated movement over 5 years 6,117 (10% total, 2% p.a.) 3,014 (8% total, 1.6% p.a.) 9,131 (9.2% total, 1.85% p.a)

12. Deprivation funding Allocation of funding through the Deprivation factor has increased in 2015-16 to £58.3m (14% of total pre MFG funding) due to increased Free School Meal eligibility. The previous percentage based on October 13 data (including previous non recouping schools etc) was 13.5%. This increase of 0.5% equates to £2 million extra that has gone in 2015-16 into the deprivation element of the formula rather than for example AWPU rates. Therefore if FSM numbers continue to grow at similar rates in the future we may no longer be able to maintain the existing deprivation funding rates.

13. Non recouping academies The EFA have stated that the schools block funding will be increased to reflect increases in pupil numbers in non recouping academies. Pupil numbers have increased for these schools so estimated additional DSG grant funding has been included in the funds available for distribution through the schools formula.

14. 2015-16 School Funding Formula Basic Pupil Entitlement (AWPU) £315.2m Deprivation (Ever 6 FSM) £58.3m Lump Sum £37.3m Split Sites £0.5m Rates £4.4m Private Finance Initiative Funding £1.8m Schools Block Formula Total pre MFG / Cap £417.6m Minimum Funding Guarantee Requirement £1.8m Funding Cap at 8.1% (£1.2m) Schools Block Formula Total post MFG / Cap £418.2m

15. 2015-16 School Funding Formula Appendix B provides a summary of the 2015-16 formula including the base unit rates for each factor.

16. Additional One Off Allocation As reported to Forum at previous meetings there is one off funding available for delegation in 2015-16 through the individual school budgets (ISB) as set out below. £m Balance of 2013-14 in year schools block underspends1.1 2014-15 in year central schools block underspends1.2 Utilisation of part of 2014-15 early years block underspend (offsets Fairer funding top slice to early years block in 2015/16) 0.5 Reserve release – previously agreed with Forum October 135.4 One off funding element for previous non recouping academies (included in 2015-16 DSG transfer) 0.3 Total Additional One Off Delegation to primary and secondary schools in 2015-16 8.5

17. Additional One Off Allocation The basis of distribution by phase for the £8.5m is the number of pupils by phase. Primary 61.4k pupils – 62% Equals £5.3m Secondary 37.4k pupils – 38% Equals £3.2m

18. Additional One Off Allocation The one off impact on the funding formula for 2015-16 only is as follows. Primary £5.3m £15,000 Increase to the lump sum value per school (as 14-15) Remaining balance (£1.4m) allocated through the AWPU £23 increase (£59 in 14-15) Secondary £3.2m £50,000 Increase to the lump sum value per school (maximum) as 14-15 Remaining balance (£1.1m) allocated through the AWPU £30 increase (£70 in14-15)

19. Additional One Off Allocation Importantly this additional delegation is outside of the MFG / Cap (agreed with the EFA) meaning schools and Northamptonshire academies will get the full benefit of this additional one off funding. 2015-16 is the second year of the agreed 3 year release of reserves. Therefore, schools should note 2016-17 will be the final year when one-off funding will be released on a similar scale and should plan their budget accordingly. Appendix C provides a comparison of the base 2015-16 formula to the final 2015-16 formula including the one off adjustment.

20. Changes to Unit Rates 2014/15 base value (£) 2015/16 Base increase from Fairer Funding (£) 2015/16 One off increase (£) Total 2015/16 (£) Primary AWPU2,58873232,684 Sec KS3 AWPU3,78168303,879 Sec KS4 AWPU4,28068304,378 Primary lump sum 125,000015,000140,000 Secondary lump sum 125,000050,000175,000

21. Summary A positive settlement overall. Real increase in schools spending power from net increase via Fairer funding and one off funding. Additional one off investment approved by the EFA and factored into budgets. Special and Nursery schools also to receive relevant share of one-off allocation. Key messages to go out to all schools / academies in Forum Matters. Also via letter on the one-off funding to keep schools up to date and to assist with school financial planning and investment in improving school standards.

22. School Funding Formula – Vote The final decision for the School Funding Formula is the responsibility of the Local Authority Delegated authority has been approved by the Cabinet to the: Director for Children, Families and Education; in consultation with : The Cabinet Member for Learning, Skills and Education; Supported by the S151 Officer / Director of Finance.

23. School Funding Formula – Vote 1.The School and Early Years Finance Regulations set out the requirement for the Forum to vote on the funding formula although the final decision remains with the Authority. 2.Transfer between Blocks – a) From schools block to high needs and early years blocks (see slide 6) - £2.38 million base adjustment b) To schools block from early years underspend (one off) - £0.5 million VOTE