1. 1 Schools Forum 14 December 2015 2016/17 Budget Andrew Minall Finance Business Partner, Children’s Services

2. 2 Schools Budget 2015/16 Block Current budget Forecast outturn Forecast variance £000 % Schools 544,956546,1611,2050.2 Early Years 61,90960,691(1,218)(2.0) High Needs 86,39790,3943,9974.6 Total DSG 693,262697,2463,9840.6 Grants (Pupil Premium etc.) 56,584 -- Total 749,846753,8303,9840.6

3. 3 2015/16 Budget – key issues Growth fund - £1.3m overspend –Primary age pupil number growth High Needs Top-Up Funding - £3.3m overspend consisting of: –Mainstream - £1.1m overspend –Special School - £0.8m overspend –Post-16 - £0.6m overspend –Discretionary payments - £0.8m overspend INMSS - £1.1m overspend High needs budget pressure reduced by £1m one-off support from reserves

4. 4 Spending Review – Nov 2015 Schools budget protected in real-terms between 2015-16 and 2019-20 –free childcare from 15 hours to 30 hours a week for 3 and 4 year olds –per pupil protection for the dedicated schools grant and the pupil premium –Implies real-terms cut of approx. 7.5% in spending per pupil (estimate provided by the Institute of Fiscal Studies) –Education Services Grant (ESG) reduced by around £600m (currently £815m) –16 – 19 base rate protected in cash terms

5. 5 Spending Review – Nov 2015 Commitment to introduce a national funding formula for schools in England in 2017 –Consultation early 2016 (all blocks) –DfE view that they have topped up those least fairly funded in 2015 –Fairer school funding gaining political momentum supported by role of the f40 –Transitional phase Apprenticeship levy –Larger employers required to pay –Mandatory employment targets for public bodies

6. 6 2016/17 Schools Budget – key features £4m budget pressure ongoing and likely to increase Savings required – First step to meet budget pressures –Reduction in primary and secondary lump sum –Similar savings planned from special schools –Review of funding policies –Efficiency savings from CERA Budgets finalised in January following DSG settlement late December

7. 7 2016/17 Schools Budget – key features Minimal change in the funding formula ‘Cash flat’ settlement anticipated –Absorption of inflation impact –Impact of NI and pension changes Minimum Funding Guarantee – remains at minus 1.5% per pupil Impact of updated IDACI scores Pupil Premium rates protected UIFSM continuing

8. 8 2016/17 Schools Budget – key features Early Years (update to Forum Jan 16) –Extension of free entitlement to 30 hours –Potential early adopter –Review of nursery flat rate High Needs – significant challenges –Increasing demand and impact of EHCPs –Growing cost pressures –DfE Funding not increasing with growth –£2m one-off funding ends in 2016/17 –Working groups established

9. 9 De-delegation ServiceBasis 2015/16 Budget £000 2016/17 Budget £000 Contingencies AWPU132400 Licences and Subscriptions * AWPU15661 Staff Costs * AWPU492 Behaviour Support Team (BST) * IDACI and Low attainment 1,948 Ethnic Minority and Traveller Achievement Service (EMTAS) * EAL and AWPU1,222 Total 3,9504,123 * Budget subject to updated census data

10. De-delegation Support to continue with all services. Approach to funding BST will be reviewed for 17/18 Licences and subscriptions budget reduced Contingency budget increased in response to increased risk 10

11. 11 Central budgets Service 2015/16 Budget £000 2016/17 Budget £000 Growth Fund5,258 Admissions996 Termination of employment costs658 Fees to Independent Schools for pupils without SEN 220 Servicing of Schools Forum39 Capital Expenditure from Revenue Account (CERA) 6,2562,856 Contribution to combined budgets (Early Help, NEET) 1,943 Miscellaneous Services423413 Total15,79312,383

12. 12 Central budgets (Misc) ServiceDetails2015/16 Budget £000 ITHPSN2 contribution103 Minibus driver training Provide training leading to a MIDAS licence to enable school staff to drive minibuses 35 Headteachers' conferences Venues and reimbursements for chairs and clerks147 TravellersAllows EMTAS to provide targeted support for children of Gypsy, Roma and Traveller heritage, the lowest attaining of any ethnic group. Support is provided in class and at a whole school level. 10 Asylum seekersUsed to support unaccompanied asylum seeking children placed in Hampshire schools and out of county. Support includes interpreting and translation, training for staff, assessment of language and learning needs and professional support. Also allows guidance for professionals to be regularly updated. 21 School leadership succession To retain and grow the supply and quality of leaders in Hampshire schools in response to a national shortage of school leadership candidates. 97 Independent Investigation Additional capacity for EPS to deal with high level of investigations. REMOVED FOR 2016/17 10 TOTAL 423

13. 13 Central budgets Only two areas can be increased – Growth Fund and Fees to Independent Schools for pupils without SEN Others restricted to commitments/previous year figures Reduction to miscellaneous services based on reduced requirements Further reductions in miscellaneous services to be considered by Schools Forum CERA commitment reduces to £2.856m Combined budgets - Early Help (£1.61m), NEET Tracking (£333k)

14. 14 CERA (Paper 6) Only historic commitments allowed £3.4m reduction planned £2m efficiencies achieved through –Improved planning enabled through strength of SLA –efficiencies in new term maintenance contracts –design of a new minor works framework Delegation of £1.4m into schools budget of which £1m to be pooled into SLA

15. 15 CERA (Paper 6) Schools Forum to consider options for use of £2m released into overall schools budget

16. 16 CERA Options for ongoing £2m efficiency saving Retain saving to meet ongoing budget pressures –Combined with lump sum reduction, would meet the majority of the current pressure –Saves limited reserves for future pressures Defer lump sum reduction –Would still leave ongoing budget pressure (£2m) –Avoids schools taking first step to meeting pressures

17. Formula modelling Extensive modelling undertaken in response to: –Request from School Forum to look at “de-capping” –Budget pressures requiring savings to be made –Updates to national data sets Challenges included –Conflict with original principles No redistribution of funding between phases Minimise redistribution of funding between factors Set lump sum to minimise impact on smaller schools –Impact of MFG Formula changes result in increased MFG Strong correlation between MFG and certain factors 17

18. 18 Lump sum proposals Option 1 –Reduce by £4,000 across both phases (to £171,000 per school) –Budget reduction of 86% (£1.7m) in primary and 14% (£0.3m) in secondary Option 2 –Reduce proportionately to budget split –Primary schools lump sum reduce by £2,600 (£172,400) –Secondary schools lump sum reduce by £13,000 (£162,000) –Budget reduction of 55% (£1.1m) in primary and 45% (£0.9m) in secondary

19. IDACI Funding 2016/17 National data set updated in 2015 (5 year cycle) Overall level of deprivation in Hampshire reduced as percentage of national total Impact at school level not known until data is released Likely to impact on level of deprivation funding schools receive Reductions may result in MFG protection Option to either maintain overall deprivation funding or accept reduction (after taking into account MFG) 19

20. Disapplication requests All exceptional requests or requests to dis-apply funding regs must be approved by Schools Forum. Types of requests required are: –Variation to pupil numbers –Sparsity funding –MFG exclusion Applications submitted by 31 December Requirement not known until pro-forma analysed following issue by DfE mid December 20

21. 21 Central budgets – Growing schools (5a) Budget pressure as a result of continued growth Supported from one-off funds by £3m p.a. until end of 2017/18 Growing schools –Hampshire policy relatively generous –Changes required for current and newly eligible schools to meet budget pressures –Options for implementation timescales –Impact on schools financial planning –Further changes may be required in 2017/18 following funding reform and in preparation for secondary growth

22. 22 Central budgets – Growing schools (5a) Options –A: Do nothing –B: Remove top up and transfer risk to school if pupil numbers fall below 20 in future years A and B will leave a significant overspend requiring further savings to be identified –C: Change from school level AWPU to £2,300 fixed rate for 30 pupils per additional class –D: Funded through budget share on the basis of 20 pupils per additional class C and D broadly meet budget pressure

23. 23 Central budgets – Growing schools (5a) Transition arrangements for options –Implement changes for all in April or September (options 1 or 2) –Implement changes for newly eligible schools in April or September with existing schools to follow (option 3) –Implement changes for all in April 2017 and meet overspend from reserves (option 4) Funding for additional classes relates to the period Sept to April Changes in April would only impact top-up payments

24. 24 Central budgets – Growing schools (5a) Key recommendations –Policy: Option D – funding through the budget share In line with DfE guidance Promotes transparency Assists financial planning / funding received upfront –Timescales: Option 1 – implement from April 2016 Meets budget pressures Consistency for all schools that are growing (current and newly eligible) A step towards potential further changes that may arise following DfE consultations in Spring 2016 Potential confusion if implemented mid year Impact to majority of schools from September (new class)

25. 25 Other Policy changes (5b) Annual update to policy pack –Refinements to improve understanding –Minor process changes –Inclusion of Education Centre policy to clarify approach to charging –Initial equipping included in other funding streams therefore removed –Minimal change as policies will need to be reviewed in 2017/18 due to wider reform Forum asked to approve revisions / inclusion

26. Summary of 2016/17 proposals Proposals for £4m savings to meet initial budget pressures –Reduction to lump sum –Similar reduction in funding for special schools –Policy changes –CERA saving proposals –Possible early years savings (update Jan 16) Any residual overspend met from reserves Other savings opportunities will be explored and discussed Recognition that reserves are now limited and further savings will be required for 2017/18 Full consultation on formula changes could include further savings proposals 26

27. 27 Schools Forum decisions Growing Schools (paper 5a) 1.Agrees a preferred option to changes to the growing schools policy 2.Agrees a preferred approach to implementation 3.Agrees to a further review in 2016/17 Policy Pack (paper 5b) 4.Approves the revisions to the policy pack 5.Approves inclusion of a policy for Education Centre Funding CERA (paper 6) 6.Agrees the proposed reductions in CERA (w.e.f. from April 2016) 7.Agrees that a further £3m is delegated with £1m calculated into the SLA and £2m available to the overall schools budget

28. 28 Schools Forum decisions Schools Budget 2015/16 and 2016/17 (paper 7) 8.notes the forecast 2015/16 budget position, based on figures as at October 2015. 9.Agrees approach to meet £4m ongoing budget pressure through reduction in lump sum and use of CERA savings 10.Agrees to preferred option for reducing the lump sum in primary and secondary schools (3.4 to 3.10) 11.Considers reductions to the centrally held miscellaneous budgets, as set out in paragraph 3.29. 12.agrees the 2016/17 budget proposals (section 3), subject to confirmation of final figures at the meeting in January 2015. 13.Agrees to the application for exceptional requests (3.63)