Agenda item

Report by Executive Director Children, Adults, Health, Families and Education and Director of Education and Skills.

Following consultation with schools and the Schools Forum on proposed changes to funding arrangements affecting school budgets, the report sets out the suggested change to the distribution of funding for 2019/20.

The Committee is asked to consider the implications of the National Funding Formulae on the local funding formula for mainstream schools in West Sussex, to consider the impact of spending pressures for schools and on high needs expenditure. Finally, the Committee is asked to preview and support the Cabinet Member decision for changes to school funding in 2019/20.

36.1   The Committee considered a report by the Executive Director Children, Adults, Health, Families and Education and the Director of Education and Skills. The report was introduced by Andy Thorne, Strategic Finance Business Partner, who took the Committee through a presentation (copy appended to the signed minutes) which outlined the potential changes to mainstream school funding in 2019/20 in West Sussex. A summary of the key points were as follows:

·         In 2018/19, the new National Funding Formula (NFF) was introduced. In order to manage the implementation of the new formula, local authorities were able to manage the distribution of the Dedicated Schools Grant (DSG) through a local formula.

·         This arrangement remains in place for 2019/20, and WSCC was required to engage schools and the Schools Forum to consult on proposed changes to funding arrangements affecting school budgets.

·         Last year, the Schools Forum agreed a transition through the local formula to protect primary and small schools, which represent over half the schools in West Sussex. It was possible to maintain their funding level at £150,000 as larger schools were doing better via the minimum per pupil level of funding. This meant these smaller schools received a budget allocation higher than their indicative notional funding from the NFF, to enable WSCC time to consider their future viability.

·         This year, in order to increase the local formula in line with the NFF, the primary lump sum value could not be maintained at £150,000. Four options were provided in a consultation document as follows:

Ø  Option 1: Phased reduction in primary lump sum

Ø  Option2: Full reduction in primary lump sum

Ø  Option 3: Full reduction in primary lump sum and application of full minimum per pupil funding rates

Ø  Option 4: Phased reduction in primary lump sum with 0% minimum funding guarantee.

·         The Schools Forum agreed to support Option 1.

·         In order to boost funding for the High Needs block, further transfers from the DSG were again required. The proposed transfers were £2.3m from the Schools block and £0.4m from the Early Years block to the High Needs block, representative of 0.5%.

·         In December 2018, schools and the Schools Forum voted against the proposed transfer to the High Needs block from the Schools and Early Years blocks. In anticipation of this transfer being turned down, WSCC submitted an appeal to the Secretary of State for Education on 30^th November 2018. This disapplication request asked that the Schools Forum decision was overturned, and that the transfer takes place. The outcome will be known in January 2019.

·         In order to understand the impact the proposed transfers would have on individual schools budgets, four options were presented:

Ø  Option A: Transfer through reduced minimum per pupil funding level and area cost adjustment

Ø  Option B: Transfer through basic entitlement unit values

Ø  Option C: Transfer through combinations of Options A and B

Ø  Option D: Transfer through combinations of Options A and B with 0% minimum funding guarantee.

·         The Schools Forum agreed that if the requested transfer of 0.5% to the High Needs block was successful, Option C represented the least unfair route.

·         The Secretary of State for Education had received 28 other requests to make a similar transfer to the High Needs block.

·         In recognition of the pressures on the High Needs element of the DSG, in December, the Secretary of State for Education announced an additional £250m of high needs funding to be paid over two years. West Sussex will therefore receive an additional £1.8m in 2018/19 and 2019/20. This has reduced the disapplication transfer request to £0.5m.

36.2   The Committee thanked the Strategic Finance Business Partner for the presentation and report. They recognised that the NFF and DSG leaves schools and vulnerable children significantly underfunded and that further investment is required from government.

36.3   The Cabinet Member for Education and Skills advised that WSCC needed to continue to make the point to government that the funding allocation for the High Needs block in particular does not keep pace with the expenditure required. He added that he was grateful for the clear steer from schools, the Schools Forum and the Committee that Option 1 and Option C presented as the least unfair choices in an ultimately challenging funding situation.

36.4   Resolved that the Committee:

1.   Considers the impact of spending pressures for schools and on high needs expenditure.

2.   Supports the change to the distribution of school funding for 2019/20 as set out in paragraphs 2.5 (Option 1) and 2.9 (Option C) in the report, which is to be considered by the Cabinet Member for Education and Skills in January 2019.