North Lanarkshire CouncilReport

Agenda item____

LI approval E noting Ref I D a t e 24/04/18

IReviewK.1 INorth LanarkshireJ111 ' l l t' Scheme

From Assistant Chief Executive (Education, Youth & Communities)Email boydisab©northlan.gscx.gov.uk Telephone 01698 302534

Executive Summary

This report highlights the actions taken by the Service to review the North LanarkshireDevolved School Management (DSM) scheme.

Recommendations

The Education Committee is recommended to:

a) Note the Service has reviewed the existing North Lanarkshire DSM scheme inaccordance with national best practice guidelines.

b) Note the Service will continue to monitor and review the effectiveness of theNorth Lanarkshire DSM scheme.

c) Note establishment funding formulas will continue to be amended to reflectfuture approved savings or efficiency proposals which effect school budgets.

Supporting Documents

Appendix 1 Devolved School Management Scheme − Key FeaturesAppendix 2 Devolved School Management Guidelines

Appendix 3 Devolved School Management Self Evaluation Toolkit

1. Background

1.1 Devolved School Management (DSM) was introduced in 1993 and the policy wasmade a statutory requirement per 'The Standards in Scotland's Schools etc Act2000' which committed education authorities to operate a formal DSM scheme forindividual schools. DSM is essentially a partnership agreement between aneducation authority and schools/ nursery establishments which delegatesresponsibility and control of a large portion of the school/nursery budget toindividual Heads of Establishment.

1.2 The Scottish Government has periodically produced supplementary guidelines tosupport the practical implementation and operation of DSM schemes. Whilst thegovernment guidance provides an overarching DSM framework, each authority isable to develop its own administrative and governance arrangements whichreflect local needs and specific spending priorities. In this regard the Serviceregularly reviews best practice within our authority in comparison to thegovernment guidance and through information sharing with professional networkssuch as ADES.

1.3 The North Lanarkshire DSM scheme was introduced in 1997 and has beensubject to committee approved periodic review, updates and amendments in2002, 2003, 2004, 2005, 2006, 2010 and 2014. The key features of the NorthLanarkshire DSM scheme are outlined in Appendix 1.

1.4 The current government guidelines recommend that each authority should reviewtheir DSM scheme on a regular cycle of 3 years, or shorter if an authority wishesto make a significant amendment to a scheme. The previous review of the NorthLanarkshire DSM scheme was completed in 2014.

1.5 The current review has been deferred for a year as authorities awaited detailedguidance on the treatment of Pupil Equity Funding (PEF) in relation to local DSMschemes. The Scottish Government reiterated in updated guidance issued inFebruary 2018 that PEF has to be operated and managed separately from coreDSM funding, and this approach is reflected throughout the remainder of thisreport.

2. Report

2.1 Current DSM Guidelines

2.1 .1 The current national DSM guidelines were approved by the Scottish Governmentand COSLA in June 2012 (Appendix 2).

2.1.2 The national DSM guidelines are underpinned by four key principles in theeffective management of schoolbudgets:−•

Subsidiarity and Empowerment• Partnership Working• Accountability and Responsibility• Local Flexibility

This approach differs from the previous 2006 national guidance which was moreclosely focussed on notional financial or percentage targets as measures ofsuccess of a particular DSM scheme. The current guidelines seek to integrateand strengthen the role of DSM in the daily routine of schools/nurseries with theaim of supporting Heads of Establishment to achieve the best possible outcomesfor their pupils.

2.1.3 The 2012 guidelines also include a 'Self−Evaluation Toolkit'. A key function ofthis toolkit is to provide authorities with assurance that their individual schemesmeet the principles of the national guidelines and to also ensure a measure ofconsistency across all local authorities.

2.1.4 The self−evaluation toolkit has been completed, and a copy is attached asAppendix 3. Based on the results of the self−evaluation exercise the Servicebelieves the North Lanarkshire DSM scheme continues to address the key aimsand aspirations of the current guidance. Examples of good practice within each ofthe key principles are illustratedbelow:−DSM

Principle NLC Good Practice

Subsidiarity and • DSM guidance and financial procedures manuals are available in allEmpowerment schools

• Each Head of Establishment is supported locally by a cluster Adminand Finance Assistant (AFA).

• Aspiring school leaders are given training on the principles of DSMand how it supports and underpins decision making and strongschool financial management.

• A budget note is forwarded to Heads of Establishment at the start ofeach financial year.

• Heads of Establishment take part in working groups considering andreviewing implementation of new working practices and/or deliverymodels.

Partnership Working • Schools are engaged in numerous partnership arrangements for thebenefit of their pupils. Theseinclude:−a.

Catchment schools to ensure strong transition arrangementsfrom early years to primary and primary to secondaryeducation.

b. Vocational education in local colleges.c. Sports and after school clubs.d. Formal and informal support of parents.e. Strong links to professional services, such as NHS,

psychologists, social workers.

• Sharing of resources and best practice between schools on acluster basis.

• When appropriate schools pool resources to procure goods andservices.

• Strong links to partner providers in Early Years sector.Accountability and • Budget formulas and allocations to individual schools are clear andResponsibility transparent.

• Heads of establishment have autonomy and flexibility over theirdevolved budget to best support the needs of their pupils.

• Heads of Establishment integrate available funding into their SchoolImprovement Plans to prioritise resources. This will include use ofbudget carry forwards from one financial year to the next.

• School resources, funding and fundraising is discussed locally withParent Councils.

Local Flexibility • The North Lanarkshire DSM scheme allows Heads of Establishmentto transfer funds between individual school budget lines.

• The DSM scheme allows Heads of Establishment to carry forwardunused budget from one financial year to the next.

• The financial limits for budget transfers and carry forwards are clearand transparent and included in the DSM guidance available inschools.

• Pupil rolls are reviewed on a bi−annual basis to ensure Heads ofEstablishment receive an up to date and accurate budget allocation.

• Heads of Establishment are supported and encouraged to operateSchool Fund accounts which enable pupils to widen their learningexperience through extra−curricular activities such as educationalexcursions and school performances.

2.1.5 The Service also works closely with colleagues in Financial Solutions and InternalAudit, to ensure internal DSM processes are robust and fit for purpose, and arealigned to the wider Council governance frameworks.

2.2 Feedback from Heads of Establishment

2.2.1 A recent Heads of Establishment survey was undertaken to ascertain views onthe operation and suitability of the current North Lanarkshire DSM scheme and tohelp identify any required changes to the scheme. The survey was issued to 172Heads of Establishment and 71 responses (41.3%) were returned.

2.2.2 The findings from the survey have been broadly positive, and based on theevidence no significant changes to the current DSM scheme wererequested/highlighted. However, the survey clearly indicated Heads ofEstablishment would welcome refresher training on DSM and school financialmanagement. The survey questions and results are highlighted in the table

below:−Survey

Question Strongly Agree Disagree StronglyAgree Disagree

%age %age%age %age

1. Within your establishment do senior staffhave a working knowledge of DSM to enable 16.9 70.42 12.68 0them to carry out their duties effectively?

2. Within your establishment do senior staffreceive appropriate levels of support and 29.58 61.97 7.04 1.41guidance from school based finance staff?

3. Within your establishment do senior staffreceive appropriate levels of support and 5.63 54.93 35.21 4.23guidance from HQ finance teams?

4. Within your establishment would senior staffbenefit from refresher training on DSM Yes 91.55%guidelines? No 8.45%

5. Do you consider the North Lanarkshire DSMscheme provides sufficient guidance andflexibility to allow senior staff to manage 14.08 54.94 25.35 5.63their school budget effectively to meet localneeds?

6. Do you consider the current maximum levelof budget virement is sufficient to give 8.45 67.60 19.72 4.23headteachers the required flexibility tomanage their school budget effectively?

7. Do you consider the current maximum levelof Carry Forwards are sufficient to allow 7.04 67.61 25.35 0headteachers to plan effectively across .financial years?

8. Do you consider the North Lanarkshire DSMscheme allocates budget resources on an 5.63 61.97 28.17 4.23equitable basis across all schools?

2.2.3 In response to the survey feedback the Service will further consider and developproposals to roll out additional training and guidance to senior school staff.

2.3 Support to Improve Financial Systems and Major Projects

2.3.1 Since the previous DSM report the following initiatives which support Heads ofEstablishment in streamlining transactions and managing funds have been introduced:

• Full roll out of cashless systems across all schools• Full roll out of online payments across all schools• Implementation of a financial ledger structure to support the PEF programme• A trial has been initiated to review the benefits of Prepaid Purchase Cards within

the school estate

2.4 Proposed Revisions to DSM Scheme

2.4.1 Based on the positive results of the DSM self−evaluation exercise coupled withthe positive results from the Heads of Establishment DSM Survey, the Service isnot proposing to change the existing North Lanarkshire DSM Scheme at thistime.

2.4.2 As advised in previous DSM reports the Service will also continue to amendestablishment funding formulas if Council agree to implement future savings orefficiency proposals which are linked to school budgets.

3. Implications

3.1 Financial Impact

3. 1.1 There are no financial impacts linked to this report.

3.2 HR/Policy/Legislative Impact

3.2.1 There are no HR/Policy/Legislative impacts linked to this report.

3.3 Environmental Impact

3.3.1 There are no environmental impacts linked to this report.

3.4 Risk Impact

3.4.1 There are no significant risks 'inked to this report.

4. Measures of success

4.1 The Service continues to operate within the approved North Lanarkshire DSMScheme guidelines.

Assistant Chief Executive (Education, Youth & Communities)

Appendix I

Devolved School Management Scheme — Key Features

Budget AllocationsThe following table outlines the basis of allocation for each budget heading included in the NorthLanarkshire Devolved School Management Scheme.

Budget Line Description Basis of Budget AllocationEmployee fi−OM . ?Teachers Basic Teaching FTE and Management Structures determined

by approved formula and agreements.

Additional funding included on the basis of deprivation andspecific school−related issues.

Single Status Staff Within Primary, Secondary and Special School sectors,approved staffing formulae will determine entitlement toclerical assistants, classroom assistants and, whereapplicable, technicians, librarians and school finance staff.

Funding for ASN Assistants is allocated following anassessment of need in individual establishments.

Within Early Learning Establishments, posts are allocated onthe basis of agreed staffing formulas.

Other Employee Costs Fixed amount per school plus allocation per pupil.Teacher Cover Allocation per teaching fte.Pe ftVT1Q6itgVY?1# •.Property Rates Based on assessed requirement.Water Meter Charges Based on assessed requirement.Health and Safety Fixed amount per establishment.Energy costs (electricity, gas Based on assessed requirement.and solid fuel)

Cleaning Materials Fixed amount per schoolFacilities Management, Allocation based on agreed charges from Infrastructureincluding grounds Services and Facility Support Services.maintenance, cleaning,window cleaning, janitorialand uplift of wasteSchools Lets Fixed amount per schoolJanitorial Supplies Fixed amount per school plus allocation per pupil. Early

Years establishments receive a fixed amount per child.Security Systems − Line Fixed amount per establishment.RentalPPP Unitary Charge Based on assessed requirement.

ISE—OfficeEquipment and Fixed amount per establishment plus allocation per pupil

MaterialsKitchen Equipment Based on assessed requirement.Early Years Hygiene Fixed amount per establishment plus allocation per pupilContract Hygiene Units Based on assessed requirementFurniture and Fittings Fixed amount per establishment plus allocation per pupilMaterials Apparatus and Fixed amount per establishment plus allocation per pupil.EquipmentEduc Equipment Fixed amount per establishment.MaintenanceLibrary/Resource Centre Fixed amount per establishment plus allocation per pupil.Materials

Appendix I

Budget Line Description Basis of AllocationICT Telecom Voice Services Fixed amount per establishment plus allocation per pupil.School Milk Contract priceContract Catering Contract price with Environmental Services

Other Supplies and Services Fixed amount per schoolTransortTravel Expenses Fixed amount per establishment plus allocation per teacher

Admunistr4tu5nCosts "Printing and Stationery Fixed amount per establishment plus allocation per pupil.Journals I Directories Fixed amount per establishmentPostages Fixed amount per establishment plus allocation per pupil.

Early year establishments allocated per pupil based on headcount

Staff Training Fixed amount per establishment plus allocation per teacherfte

Continuing Professional Fixed amount per establishment plus allocation per teacherDevelopment fteCatering for Meetings Fixed amount per establishmentMembership Fixed amount per establishmentFees/SubscriptionsTV Licence Fixed amount per establishmentPay ñéñttoAgénciés:. H:Health & Wellbeing Allocation per pupilScottish Qualifications Estimated presentations per establishment.AuthorityParent Council Expenses Fixed amount per establishment plus allocation per pupil

Establishment Activities Fixed amount per establishment plus allocation per pupil.Nursery classes will receive allocation per pupil based onhead count

Payments to Fixed amount per establishmentChaplains/Churches

Budget VirementsThrough the DSM Scheme Heads of Establishment have the authority to vire funds betweenindividual budget headings. The criteria are as follows:

• Virement from Teacher Salaries up to a maximum of 1 FTE average teacher salary cost.This is currently equivalent to circa £43,000 per annum.

• Virement of up to £20,000 from any other delegated budget line.

There are a small number of budget lines which are excluded from the virement flexibilityprimarily in demand led areas such as ASN Assistants and SQA Fees.

School Carry ForwardsThe carry forward of funding from one financial year to the next is subject to a limit of 2% of thetotal delegated budget for Primary, Secondary and Special Schools and 10% of the delegatedbudget for Early Years Establishments.

Similar to budget virements there are a small number of budget lines which are excluded fromthe carry forward permissions primarily in demand led areas such as ASN Assistants and SQAFees.

Appendix 2

Appendix 2

CONTENTS

1. Introduction .....................................................................................................................42. Background ..................................................................................................................... 43. Updated DSM 2012 Guidenes: Key Contexts .........................................................5

NationalPolicies........................................................................................................5

FinancialClimate ................................................................................................... .... 54. The DSM Steering Group .............................................................................................6

5. DSM Steering Group: Key Considerations ...............................................................6

6. The Revised Devolved School r•1anagement (DSM) Guidelines.. .......................... 87. Principles for Devolved School Management (DSM) ...............................................9

Subsidiarily and Empowerment ............ ........................ ............................ −−−− ... ..9

PartnershipWorking .................................................................................................9

Accountability and Responsibility .........................................................................10LocalFlexibility ........................................................................................................11

8. Advisory Notes for Devolved School Management ................................................12

2

ACKNOWLEDGEMENTS

The development of the new DSM Guidelines involved contributions from a widerange of stakeholders The following organisations and committees are recognisedand thanked for their contributions.

• Association of Directors of Education (ADES) in particular the ADESResources Committee

• ADES/COSLA DSM Working Group

• Association of Heads and Depute Heads Scotland (AHDS)

• COSLA Education, Children and Young People Executive Group

• Educational Institute of Scotland (EIS)

• Education Scotland

• Local Authority Directors of Finance

• School Leaders Scotland (SLS)

• Scottish Government

• Society of Local Authority Chief Executives (SOLACE)

• The Improvement Service (IS)• The National Parent Forum Scotland (NPFS)

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Appendix 2

Appendix 2

DEVOLVED SCHOOL MANAGEMENT (0 SM) 2012 GUIDELINES

1. Introduction

This document sets out the new Devolved School Management (DSM) Guidelinesalong with background and contextual information. The DSM Guidelines were agreedunanimously by councils at the COSLA Convention in March. 2012 and by theCabinet Secretary for Education and Lifelong Learning in June 2012. The guidelineswere produced by a wide range of stakeholders as part of a consensual approach.

2. Background

Education is a fundamental core service that is delivered locally under the strategicdemocratic leadership and accountability of councils. Nearly half of Scottish Councilbudgets are currently spent on school education, with a significant proportion of thisexpenditure funding the salary costs of teaching and support staff. To enhance andimprove the management of resources at local (school) level, Devolved SchoolManagement (DSM) was introduced in 1993. This required councils to devolve 80%of school budgets to headteachers with the twin aims of improving local decisionmaking and providing more flexibility to heaciteachers in responding to the needs ofindividual schools.

The 2006 DSM Guidelines issued by the Scottish Executive recommended that localauthorities increase the level of devolved budgets to 90%. This advice reflected theprinciple that everything that could be devolved should be devolved, except forcertain areas of expenditure that were not considered suitable for devolution. Sincethe issue of the DSt.1 Guidelines, six years ago, there have been significant changesin the policy landscape in Scotland that impact on DSM Moreover, there has been aconsiderable change in the economic and financial climate for local government andthe wider public sector in Scotland

In 2011 Michael Russell, Cabinet Secretary for Education and Lifelong Learning fromthe Scottish Government and d I r Isabel Hutton, COSLA Spokesperson forEducation, Children and Young People agreed that the 2006 DSF.1 Guidelines shouldbe reviewed and amended to take account of a much changed environmentdescribed in the following context paragraphs, albeit with existing local democraticaccountability and oversight of education services being maintained.

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Appendix 2

3. Updated DSM 2012 Guidelines: Key Contexts

National Policies

There are a number of key national drivers for modernising DSM Guidelines. Theimplementation of the national reform of the school curriculum is well advanced.Curriculum for Excellence affords individual schools and groups of schools workingtogether considerable autonomy in shaping a curriculum which best meets theircircumstances. As such, an increase in curricular autonomy will require a greater and

more consistent level of resource and management autonomy across Scotland'sschools,

Since the establishment of Single Outcome Agreements (SOAs) there has been agrowing recognition of the importance of an outcomes−based approach to planning,managing and evaluating public services. Schools have a key role in deliveringimproved outcomes for Scotland's children and young people. Therefore, planningand budget management at school level need to be increasingly aligned to that end.

DSM schemes in 2012 and beyond need to take account of the range of strategicpolicy frameworks that impact on children's services including 'The Early Years','Reaching Our Potential'. 'Equally Well', Looked after Children and Young People:We can and must do better' and More Choices, More Chances'. These policyframeworks are underpinned by the 'Getting it right for every child' (GIRFEC) agenda.GIRFEC is not a policy framework but rather a programme for delivering moreresponsive and better integrated services, through significant culture and practicechange.

The report of the Christie Commission published in June 2011 recommended thatpublic services should be built around people and communities, achieve outcomes,prioritise prevention, improve performance and reduce costs. The report is of clearrelevance to DSM and the direction of public services since the management ofschools is crucial to the ambitions of local authorities and their community planningpartners for childrens services.

Community planning is currently the subject of a formal national review. Therefore,the revised DSFl Guidelines are intended to be flexible to incorporate potential futurechanges for community planning.

Financial Climate

The revised DSM Guidelines have been considered in relation to the financialpressures that the public sector is experiencing and will continue to experience overthe years ahead. In Scottish Councils there are around fifty thousand teachers (FullTime Equivalent) employed with approximately £5 billion spent on school education.

The DSfvl Guidelines take into account that the fact that many local authorities nowprovide a mixed economy of services which are procured and delivered on a strategic

5

Appendix 2

shared service basis to create efficiencies and reduce costs. Given the challengingfinancial climate, it is likely that more services will be shared or procured on a councilwide basis instead of being available as resources to be devolved at a local level.

4. The DSM Steering Group

A series of COSLA led senior officer meetings were held to take forward the review ofDevolved School Management from December 2011 to February 2012. The groupcomprised senior officer representation from the Association of Directors of Education(ADES). School Leaders Scotland (SLS), Association of Heads and Depute HeadsScotland (AHDS), the National Parent Forum Scotland and the Scottish Government.Other key stakeholders were consulted outwith DSl,1 Steering Group meetings.These included the Educational Institute of Scotland (EIS). Education Scotland, theImprovement Service and the Society of Local Authority Chief Executives (SOLACE).

The work of the DSM Steering Group was overseen at a political level by the COSLAEducation, Children and Young People Executive Group and its sub−group theCOSLA Education and Children's Services Public Sector Reform (PSR) StrategyGroup.

5. DSM Steering Group: Key Considerations

After detailed consideration of the changing policy context, the DSM Steering Groupagreed that while the 2006 Guidelines for DSM need to be updated to take account ofsignificant policy, legislative and procedural changes that have occurred over the pastsix years, they nonetheless remain a source of valuable advice to local authoritiesand headteachers. Their key principles are no less relevant now than when they werefirst framed. The variable scope of current DSl1 schemes is, in significant measure, areflection of the inconsistent application of the 2006 Guidelines across the country.However, it is apparent that those guidelines have supported the establishment in anumber of councils of suitably empowering schemes which devolve significant levelsof resource and functional responsibilities to schools.

The DSM Steering Group were of the view that in assessing the potential of DSMschemes. the percentage of budget devolved is less relevant in a modern contextthan the actual functions, controls and powers that are devolved to tieadteactiers. Itwas felt that comparing specific percentages from council to council is problematicsince we are not necessarily comparing 'like with like' due to different localcircumstances e.g. varying levels of rurality or deprivation. It was therefore agreedthat new guidelines should contain a clear statement on the principle of subsidiarityas well as references to Additional Support for Learning (ASL) and the newcurriculum. It was also agreed that the guidelines for DSM should be regularly

6

Appendix 2

reviewed at a local level e.g. e v e r y three years in terms of their implementation and ata national level within an appropriate tinieframe.

The DSM Steering Group considered specific case studies from Angus, East Ayrshireand West Lothian Councils to inform discussions about wider organisationalapproaches to OSM and about more specific aspects such as parental involvementand the virement of budgets. The potential use of 'pooled" budgets in differentmodels of learning communities or school groupings was also discussed withreference to community planning arrangements for a more integrated approach topublic service delivery. Given the ongoing national review of community planning, itwas agreed that in developing new DSM Guidelines, it would be important to ensurea degree of flexibility to reflect future changes to the operation of community planningpartnerships and the contributions of schools to these partnerships.

The DSM Steering Group is of the view that the revised guidelines are sufficientlyflexible to support local variation and local circumstances. In carrying out this reviewexercise, the Steering Group has had regard to the outputs of previous discussionson DSM, and crucially to the continuing need for a DSM framework which recognisesthat local education services are accountable to elected members and other keystakeholders. The OSM 2012 Guidelines will have a statutory underpinning since thenew guidelines, as was the case for the 2006 guidelines are linked to the Standardsin Scotland's Schools (2000) etc Act.

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Appendix 2

S. The Revised Devolved School Management (DSM) Guidelines

The aims of the revised Devolved School Management Guidelines are toempower headfeachers to meet local needs and deliver the best possibleoutcomes for young learners, in line with the objectives of Curriculum forExcellence, GIRFEC and the Early Years Framework. Moreover, they areintended to ensure that existing best practice in relation to the operation ofDSM Schemes will become standard practice across the country, based on thecore values of subsidiarity, openness, transparency and local accountability.

The DSM Guidelines are based on nineteen principles that are grouped under thefollowing four headings with a set of advisory notes outlined at the end of thedocument.

• Subsidiarity and Empowerment;

• Partnership Working;

• Accountability and Responsibility; and

• Local Flexibility

The new DSM Guidelines are also supported by a DSM Self−Evaluation toolkit whichis intended to enable councils and schools to assess the 'fitness of purpose' of localDsM schemes. Its use will serve to raise awareness of the updated guidelines and ofwhat is, in essence, a new national framework. This toolkit will allow electedmembers, chief executives, directors, headteacliers. teaching staff and parents theopportunity to evaluate their local DSM scheme and related procedures.

As part of an evolving approach to DSM, the OSM Self−Evaluation toolkit is to beavailable as an initial version on the Improvement Services website along with goodpractice case studies and weblinks to specific publications which promote otherinnovative approaches. Consideration may also be given to a proposed nationalworkshop based event for the DSM Guidelines and the DSM Self−Evaluation toolkit.

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Appendix 2

7. Principles for Devolved School Management (DSM)

The principles below should form the basis of local DSl1 schemes. The principles aregrouped under headings which are reflected in the DSM Self−Evaluation toolkit.These principles are similar to some of those set out in the 2006 guidelines, whichare still considered relevant to the operation and management of DSM schemeswithin local authority frameworks.

Subsidiarily and Empowerment

• Devolved school management schemes should provide headteachers andother school staff with the autonomy and flexibility to make decisions at theappropriate level and to make the most effective use of resources which bestsuit local circumstances.

• Local and national leadership programmes linked to the Donaldson Reviewshould be developed to foster an approach to DSM which encouragesenterprising decision−making, with a focus on maximising outcomes for childrenand young people. Other professional and support staff should also haveaccess to training to support the operation of more enabling and morecomprehensive DSM schemes.

• Councils should continue to explore ways of increasing devolution of budgetsand/or decision making where there are clear benefits for school communities.

• Local DSfvl arrangements should seek to support the delivery of the bestpossible outcomes for children and young people in line with the strategicdirection and policies of the council and its community planning partners.

Partnership Working

• Devolved school management should be informed by local priorities and issuesto ensure it contributes towards shared agendas and improved outcomes.Devolved school management schemes should also enable strongerpartnership working with other agencies and stakeholders in communityplanning partnerships and effective collaboration between education providersas part of learning communities where this adds value.

• Effective joint working involving chief officers. education directorates.headteachers and other school staff is an important element of a robust DSMFramework overseen by local elected members. Given the importance ofmulti−agency approaches to meeting the needs of children and young people,headteachers need to understand and take account of the corporate and widercommunity planning partnership arrangements in managing their schools and,therefore, devolved budgets.

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Appendix 2

• DSM Schemes need to 'influence' and be influenced' by a schoolscollaboration with parents and with a range of other partners. This joint workwith partners should be guided by agreed priorities framed in the SchoolImprovement Plan, Education and Children's Services Planning and theCommunity Plan.

Accountability and Responsibility

• Increased devolution of resources to schools brings increased managementresponsibilities and increased accountability. Headteacliers have responsibilityfor these resources in line with the strategic direction of the council and itsinternal procedures. The management of council and school budgets shouldalso operate within Best Value regimes and seek continuous improvement.

• Where appropriate and possible, the development of three year indicativebudgeting horizons should be considered while recognising financial pressuresand constraints.

• While headteachers should be given maximum flexibility over their budgets,there are some areas of expenditure that are generally not considered suitablefor devolution. These are outlined in the Advisory Notes. The underlyingprinciple should be that devolution should be meaningful and allowheadteachers the flexibility needed to ensure that decisions that need to bemade locally are made locally.

• Stalling strategies set by councils should be developed in ways that allowheadteachers to manage their resources effectively and efficiently. Councilsshould work to facilitate headteacher discretion by being robust in providingsupport, such as sharing information on good practice, whilst challengingschools by ensuring that heaciteachers have applied rigorous analysis to theirspending decisions as well as putting in place appropriate review andevaluation procedures.

• A quality education service needs support structures to raise attainment anddeliver better outcomes for Scotland's children. The design and operation ofDSM schemes should take account, within the context of widerservice/corporate budgets of the requirements for support structures andprofessional teams with quality management responsibilities.

• Councils should review local DSM Schemes every three years in terms of theirimplementation to ensure that they remain lit for purpose.

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Appendix 2

Local Flexibility

The scope of devolved schemes should enable devolution to a local level of theresources needed to allow a heaciteac her to plan and make provision for services thatrequire to be delivered at school level.

• Criteria for devolving resources to a local level will vary according to thecharacteristics of each council. However, Key criteria will be based aroundschool roll, deprivation and rurality factors. The criteria should be transparentand be 'owned' by the main stakeholders i.e. elected members, headteachers,teaching staff and parents.

• All decisions about resource use at school level should have regard to theactions that will best meet the needs of the school and its pupils and toinevitable judgements about what provides best value, drawing on corporatefinance and procurement guidance.

• Councils should decide where appropriate and possible within the context ofthree year indicative budgets, what flexibility to allow for carry forwards,positive or negative, having due regard to a school's agreed improvementpriorities. It will also be a matter for individual councils to agree the percentagelimits to be applied to carry forward facilities.

• Three year indicative budgeting horizons, where appropriate and possible,should allow schools to manage their staffing over a period of years within aclearer distribution framework. Headteachers should be able to anticipatestudent roll movements in most circumstances, although there will be a needfor flexibility to allow for unexpected changes.

• Local DSM schemes should clearly set out the council's policy on virement.They should encourage the responsible use of this facility with due regard tocorporate guidance.

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Appendix 2

8. Advisory Notes for Devolved School Management

DSI.4 must give Iieadteachers and schools maximum flexibility. However, there aresome areas of expenditure such as elements of additional support for learning (ASL)that cannot easily be broken down to school level as they would tend to bringunnecessary and unproductive bureaucracy were the funding to be devolved. Inaddition, there are other areas of expenditure that should not be devolved if a councilneeds to protect its schools from unacceptable levels of risk.

For the purposes of these updated guidelines the following areas of expenditure aregenerally not considered suitable for devolution in relation to the budget for schools:

• Capital expenditure, including all PPP/PFI costs;

• Central support services e.g. English as an additional language support,hearing, visually impaired services, educational psychology services;

• School meals;

• Bursaries, clothing and footwear grants;

• Expenditure supported by central government specific grants, where it isexplicit that the purpose is to support council wide initiatives;

• Home−to−school transport,

• Premature retirement costs;

• Centrally funded support for children and young people who require significantadditional support whether from education (e.g. auxiliary support, specialistaids and appliances) or from other agencies (e.g. health services);

• Education Maintenance Allowances;

• Council contracted work on managing the School Estate where applicable;

• School security running costs.

Although the spending areas outlined above tend to be exempt from DSMarrangements, councils could devolve part or all of the sums involved it this issensible and practical based on their own local circumstances. This list is notexhaustive).

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Appendix 3

The DSM 2012 Guidelines aim to meet local needsand support the delivery of the best possibleoutcomes for young learners, in line with theobjectives of Curriculum for Excellence, GIRFECand the Early Years Framework.

This initial version of the DSM Self Evaluationtoolkit should be used in conjunction with therevised DSM Guidelines by elected members, chiefexecutives, directors of education, headteachers,teaching staff and Parent Councils.

A key function of this Self Evaluation toolkit is toensure that the updated DSM Guidelines are beingconsistently applied across Scotland. The purposeof this first version of the toolkit is therefore to

provide local authoritiesand schools with assurancethat their DSM schemesfollow all of the principleslaid out in the newguidelines.

The DSM Self Evaluation toolkit can be used at alocal level to assess DSM schemes by anappropriate group of stakeholders within a localauthority. This group of stakeholders couldconsist of representatives from an existing or newgroup and would include local elected members,directors of education, headteachers, heads ofestablishment (nursery or special schools), parentrepresentatives, other teaching staff etc.

It is suggested that the stakeholder groupoverseeing DSM should not be overly bureaucraticand should help to facilitate more collegiateworking across a council and its partners.However, it is entirely the decision of localcouncils to how these arrangements should beestablished to meet local circumstances.

Furthermore, it is recommended that once theDSM Self Evaluation toolkit has been used ananalysis of current local DSM arrangements isundertaken through a workshop based approachwith a focus on identifying improvement actionsthat can also be potentially informed by bestpractice from other councils.

The 2012 Guidelines are based on the core valuesof subsidiarity, openness, transparency and localaccountability. The DSM Guidelines are also basedon nineteen principles that are grouped under thefollowing four broad headings accompanied bysome brief explanatory information.

Subsidiarity and EmpowermentScottish local authority education services shouldsupport decision making at the most appropriatepoint to empower headteachers and other teachingstaff.

For schools this would mean ensuring thatdirectors of education, headteachers, other staffand Parent Councils understand the key aims andprinciples associated with the management ofdevolved budgets. These arrangements should bemanaged in ways which ensure a clear focus onthe best educational outcomes for learners.

Partnership WorkingEach local authority should have in placeappropriate arrangements to review and updatetheir own DSM Scheme, which will include inputfrom and consultation with headteachers, teachers,parents and other key stakeholders to promoteeffective partnership working between educationproviders within learning communities. Jointwork with partners should be guided by agreed

local priorities framed inthe School ImprovementPlan, the Education andChildren's Services Plansand the Community Plan.

DSM schemes should alsofacilitate and promote effective joint workinginvolving chief executives, education directorates,headteachers, other staff and parents within aDSM framework overseen by local electedmembers.

INTRODUCTION CORE VALUES AND PRINCIPLES OF AROBUST DSM SCHEME

Appendix 3

Accountability and ResponsibilityDSM Schemes will clearly state how budgets aredevolved to establishments, and whichresponsibilities have been devolved to school level.Related advice should address the need for schoolsto meet the minimum standards agreed by a localauthority.

Local FlexibilityAs the financial year does not run concurrentlywith the academic year it is considered goodpractice to allow establishment headteachers theability to carry forward funds. Any decision by aheadteacher to notify a carry forward of fundsfrom one financial year to the next must besupported by a sound educational business caseand, if required, by local authorisation.

Local authorities should ensure that allheadteachers are consulted and fully engagedwhen setting minimum or core staffing standards.It should also be recognised that these minimumstaffing standards maybe subject to review fromtime to time and should be aligned to meetnational outcome targets. Staffing allocationsadditional to the core allocations can, however, bedeployed flexibly by headteachers to meet widerschool educational and learning priorities.

An effective DSMscheme will ensurethat head teachers canmanage theirresources to best meet

N o − c o m m u n i t y

local Idneeds, thereby maximising the

learning experiences and outcomes for all youngpeople. Furthermore, DSM schemes should focuson the nature and range of service functions ratherthan the devolved percentages of budgets. Theirmanagement should be accountable to localcouncils since probity and efficiency in the use ofpublic monies are essential.

It is a matter for individual councils based on localcircumstances to agree the percentage limits to beapplied to the amount of funding able to be carriedforward by headteachers. This funding carriedforward by headteachers should allow them toaccumulate resources to secure key educationaloutcomes for learners. It should be recognised thatschools may wish to use this carry forward facilitynot only for on−going revenue expenditure butmay also wish to save towards a longer termplanned objective such as school refurbishmentsetc. Therefore, any scheme should allow suchflexibility where possible.

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