Budget Planning Framework 2013/2014

David May

Strategic Finance Manager – Children’s Services

Budget Planning Framework

• School Funding Settlement– Funding Blocks– MFG– Pupil Premium– Education Services Grant

• School Funding Reform– Schools Block

• Centrally Retained • New Areas of Delegation• Business Rates

– Early Years – High Needs Block

• School Meals• Timeframe

School Funding Settlement

• School Funding Settlement announced on 19th December 2012

• Continuation of the “spend-plus” methodology for 2013/2014

• Presentational changes to DSG to show 3 spending blocks:– Early Years Block– Schools Block – High Needs Block

• Baselines have been adjusted to reflect the changes

Dedicated Schools Grant - Funding Blocks

 2012/2013 DSG (new

formula)2013/2014 DSG

Dedicated Schools Grant Pupil

No’s

GUF 2013 / 2014

Total Pupil No’s

GUF 2013 / 2014

Total

  £ £m £ £m

Early Years 2,520 5,116 12.892 2520 5,116 16.034

Schools Block 35,403 4,536 160.586 35,073 4,536 159.145

High Needs Block     21.135   21.172

Total 37,923   194.613 37,593   196.351

Dedicated Schools Grant - Schools Block

2012/13 2013/14 ChangeCash Increase

Pupil Numbers 35,403 35,073 (330)

Guaranteed Unit of Funding £4,535.95 £4,535.95 0

Total £160.586m £159.091m (1.495) -0.93%

NQT Funding £0.054m 0.054

Total £160.586m £159.145m (1.441) -0.90%

School Funding Settlement – Minimum Funding Guarantee (MFG)

• The Minimum Funding Guarantee for schools will continue to reduce turbulence as new local formulas are introduced.

• The guarantee is set at minus 1.5% per pupil for 2013-14 and 2014-15. The level for subsequent years will be announced when spending plans for that period have been decided.

This means that:• No school will see more than a 1.5% per pupil reduction in

2013/2014 budgets (excluding sixth form funding) compared to 2012/2013 and before the Pupil Premium is added

• No school will see more than a 1.5% per pupil reduction in 2014/2015 budgets (excluding sixth form funding) compared to 2013/2014 and before the Pupil Premium is added

Pupil Premium 2013/2014

• Indicative National Allocation £1.7bn• Pupil Premium for disadvantaged pupils is £900 per

pupil.• Service Premium is £300 per pupil• Pupil Premium is calculated using the January 2013

school census data, final allocations will not be confirmed until Summer 2013

• Sunderland’s Illustrative allocation is £11.346m, an increase of £3.838m.

• Illustrative examples have been provided and this will be included in information presented to schools.

Education Services Grant (ESG)

• New grant to be introduced in 2013/14• Replaces LACSEG which will no longer exist• Additional funding is to be delegated to all Schools/Academies through

changes introduced as part of the Schools Funding Reform• The ESG will be allocated to local authorities and academies on a

simple per-pupil basis according to the number of pupils for whom they are responsible.

• The funding for the ESG comes from a transfer from local government of £1.04 billion in 2013-14. Sunderland’s reduction in funding is £5.416m.

• Transitional protection for academies will apply in 2013/14 and 2014/15.

• Provisional local authority ESG allocations will be issued in early 2013.• Final ESG allocations for academies will be issued by 31 March 2013

along with confirmation of the academy’s 2013/14 General Annual Grant.

Education Services Grant

Statutory Functions

Statutory Duties

2013/14

Statutory Duties

2014/15

Local Authority £15 £116 £116

Academies N/a  £150 £140

Special Academies N/a £637.50 £595

Alternative Provision Academies N/a  £562.50 £525

For special academies and alternative provision academies, multipliers of 4.25 and 3.75 will be applied respectively. ESG allocations will be calculated using 2013-14 planned places.

Transitional protections for academies will be removed from the system over a limited period of time so that the rates for local authorities and academies are brought together

School Funding Reform 2013-15 - Overview

• From 2013/2014 a simple, more consistent and transparent funding system will be introduced that– ensures as much funding reaches schools as possible;– provides equivalent and consistent funding between maintained

schools and Academies; and– supports the needs of pupils.

• Simplification of local formulae is a major change to how school budgets are calculated and the first substantive step towards a national funding formula

• Key priority that the schools budgets are driven more by pupil in the schools and their needs than by other factors

• Funding can only be distributed based on 12 factors and using data provided by the DfE - No flexibility;

• Changes in the formula factors and data to be used will cause funding turbulence between Schools

Schools & Early Years Finance Regulations 2012

• Legislative framework that brings together all the changes in the School Funding Reform

• Effective from 1st January 2013• Local Funding Formula must be compliant with the

Finance Regulations• School Forum approval required for central schools

and early years block items • Education Funding Agency validate local funding

formula to ensure compliance

Reconciliation of Schools Block Allocation

£

Total Indicative Schools Block DSG 159,090,777

NQT Funding 53,554

Revised 159,144,331

Add Transfer from High Needs Block: 1,918,097

Less Transfer to Early Years Block (249,573)

Revised Schools Block 160,812,855

Centrally Retained Schools Block Funded Services: (913,318)

Total Individual Schools Budget 159,899,537

Transfer from the High Needs Block

• Work has been undertaken to consider the impact of changes to the way statements are funded from within the schools block and high needs block.

• Existing statements have been examined to quantify the value of top up required within the High Needs Block and the funding to be transferred from the High Needs Block into the Schools funding to contribute to the first £6,000 to be paid by schools

• £1,918,097 is to be transferred to the schools block.

Transfer to Early Years Block

• In reconciling the funding blocks an error has been found between the Early Years and Schools Block control totals.

• This relates to 4 Academy schools iro 3 and 4 year old funding being retained in the Schools Block in error.

• In order to ensure appropriate funding is available within the early years funding it is necessary to transfer £249,573

• No impact on school funding as the funding has always been related to the 3&4 year old offer

Central Services retained by the LA

2012/2013 2013/2014

School Admissions £203,676 £203,676

Schools Forum £44,642 £44,642

Termination of employment costs * £660,000 £245,000

Carbon Reduction * £270,000 £320,000

CLA & MPA Licences * £100,000

Total £1,178,318 £913,318

* Future slide

Difference of £265,000 will be delegated to Schools

as part of School Funding Reform

Central Services retained by the LA

• Termination of employment costs – In previous years the School Forum agreed to contribute

£660,000 to school based Redundancies– Academies received a proportion of the budget through

Schools Block LACSEG– From previous decisions agreed by the Schools Forum

ongoing commitment of £245,000– Uncommitted budget remaining of £415,000 to be delegated

to schools and academies

Central Services retained by the LA

• Carbon reduction commitment– Increase of £50,000 approved by SF 13th December 2012– Increase based on current estimates and forecasts– In 2014/15 the forecast allowance price will rise to £16 per

tonne of carbon dioxide, an increase of £4 per tonne.– Estimated Increase of £90,000, to £410,000 in 2014/15– The Chancellor’s Autumn Statement 2012 contained

measures to simplify the CRC scheme.

Central Services retained by the LA

• CLA & MPA Licences– From April 2013, the Department for Education will manage a

national CLA Schools Licence for all state maintained schools in England and a MPA licence for the copying of sheet music. 

– The funding for these specific licences should be held centrally for both maintained schools and recoupment Academies.  We will be issuing a general dispensation under the Regulations to enable all LAs to hold this funding centrally.

– Authorities will need to remove the budget provision they have made for these licences from the ISB.

– No detail has been provided of the cost implication for Sunderland. CLA licence costs in 2012/13 are £49,000.

– As the agreement is for CAL and MPA licences it is proposed a budget of £100,000 is retained at this stage.

• Net Impact - £265,000 will be delegated to Schools as part of School Funding Reform

New Areas of Delegation

• Schools Block– Free school meals eligibility;– Insurance;– Staff costs - trade union facility time;– Behaviour support services;– Contribution to Combined Services

• Education Safeguarding Team;• Derwent Hill Advisory Service

• High Needs Block– Support for minority ethnic pupils or underachieving groups;– English as an Additional Language

• De-delegation will not be applied to Maintained Schools. • All schools/Academies will receive funding in their budgets.• Traded services will be developed for Schools and Academies.

Review of the Non-Domestic Rates Discretionary Relief Policy to Academy and Voluntary Aided Schools• Schools receive budget equal to the cost of business rates. Any

increases in business rates through revaluations or change in policy will be funded from the Dedicated Schools Grant.

• Maintained schools as part of the Academy transfer receive funding for 20% of the business rates charge.

• Academies and VA schools currently do not pay business rate.• On conversion Saving to the DSG of 80% - Loss of Funding to

the Council 20% - Saving to the Academy of 20%• Changes in the Business Rate System and LA funding

necessitate that from April 2013 the 20% discretionary relief will be removed

• Business rates charge to VA Schools, budget will need to be provided from the DSG an increase of £113,000 that can be funded from savings achieved through Academy conversion

Reconciliation of Early Years Block

Early Years Block £16.034m

Add Transfer from schools block £0.250m

Less Transfer to High Needs Block(Early Years SEN Statements) (£0.025m)

£16.259m

Early Years Funding Block

2013/2014

3 & 4 Year old Offer £10.818m

2 Year Old Offer £3.142m

Concord & Thorney Close Day Nursery’s £0.749m

Commissioned Childcare £0.846m

Childcare Team & Locality Based Working £0.704m

Total £16.259m

Reconciliation of High Needs Block

Total Indicative High Needs Block £21,172,147

Less Transfer to Schools Block: (1,918,097)

Add Transfer from Early Years Block 24,996

Revised High Needs Block Total £19,279,046

High Needs Block

• Balancing block• Confident that Schools and Early Years Block are

accurate• Uncertainty and work to complete• Within Early Years Block growth of 2 year olds – one

off slippage that will support the High Needs Block• Updates will be provided at each meeting

Dedicated Schools Grant - Funding Blocks

  TotalStatement

AdjustEarly Yrs

Correction Total

  £m £m £m £m

Early Years 16.034 -0.025 0.250 16.259

Schools Block 159.15 1.918 -0.250 160.813

High Needs Block 21.172 -1.893   19.279

Total 196.35 0.000 0.000 196.351

School Meals

• The School Forum has up until now agreed the price per meal as the decision influenced the local funding formula that directed funding to schools.

• New Funding Formula - No School Meal factor allowed• Funding is delegated to Schools based on Pupil Number and

Deprivation• Significant inflationary increase to food prices over the past 2

years• School Meal Consortium asked the Schools Forum to approve

an increase to the price of a School Meal from September 2013 by 10p (last increase September 2011)

• Sunderland primary school meal price second lowest in the region

• Following discussions at the last Schools Forum and changes in the School Funding Reform that break the link with funding it is considered appropriate that the decision to increase the price of a school meal is for each individual school to determine.

School Funding Reform 2013-15 - Timetable

Jan 17th School Forum Meeting

Jan 22nd LAs submit final pro-forma to EFA (this is a changed date from 18th January)

W/c Feb 25th

School Funding Statements issued to schools

Mar 21st School Forum Meeting to discussEarly Years and Alternative Provisions (PRU)

Briefing Sessions

• School Funding Briefing Sessions– Barmston Mere January 22nd 9.00 -10.30– Barmston Mere January 22nd 11.00 -12.30

• Governor Briefing Sessions– Sandhill Centre January 22nd 6.00 – 7.30– Washington Arts Centre January 24th 1.00 – 2.30