WSF Agenda 11Th Janaury 2013

MEETING OF THE WORCESTERSHIRE SCHOOLS FORUM (WSF)

Friday 11th January 2013 at 2.00pm Council Chamber, County Hall

A G E N D A 1. Apologies

2. Minutes of the Last Meeting 29th November 2012 (attached – blue)

3. Matters Arising

4. Any Other Business

5. School Funding Settlement 2013-14 a) Dedicated Schools Grant (DSG) (attached – pink) b) Education Services Grant (ESG) (attached – green) c) Pupil Growth Fund and School Specific Contingency Proposals (attached – yellow)

6. School Funding Review Update a) DfE Invitation to WCC (attached – white) b) F40 Group Analysis (attached – blue)

7. The School and Early Years Finance (England) Regulations 2012 (attached – pink)

8. The Management of Surplus Balances 2012-13 (attached – green)

9. Changes to the Worcestershire Fair Funding Stephanie Simcox Scheme for Financing Schools (attached – yellow) Head of Finance and Resources 10. Free Nursery Education for 2 Year Olds (attached – white)

Children's Services 11. Academy Update (attached – blue) PO Box 73 County Hall Spetchley Road Worcester Date of Next Meeting: Thursday 28th February 2013 at 2pm WR5 2YA Council Chamber, County Hall Tel 01905 766342 Fax 01905 766156 Please pass apologies to Andy McHale who can be contacted on E-mail Tel 01905 766285, fax 01905 766156 or e-mail [email protected] [email protected]

DSG ALLOCATION 2013-14 APPENDIX A

Schools Early Years High Needs 2 Year Old Funding NQT Total £ £ £ £ £ £

Baseline 2012-13 289,397,944 15,572,986 39,871,070 344,842,000

Adjustments Hospital top slice (484,656) (25,872) (65,470) (575,998) Recoupment 462,703 (462,703) 0 SEN Block Grant 1,868,695 1,868,695 Cross border 556,129 556,129 Hospital tuition 360,033 360,033

Adjusted Baseline 291,244,686 15,547,114 40,259,059 347,050,859

Places 68,832 4,814 £/place 4,231.27 3,229.56

New year pupils 68,734 4,814

DfE Notified DSG 2013-14 290,832,112 15,547,102 40,258,000 3,817,874 105,000 350,560,088

Variance (412,574) (12) (1,059) 3,817,874 105,000 3,509,229

Statutory Place 2,741,597 Trajectory Building 1,076,277 3,817,874 AGENDA ITEM 5a) WORCESTERSHIRE SCHOOLS FORUM 11th JANUARY 2013

REPORT TO THE WORCESTERSHIRE SCHOOLS FORUM (WSF) SCHOOL FUNDING SETTLEMENT 2013-14 – DEDICATED SCHOOLS GRANT (DSG)

1. PURPOSE

1.1 To advise the WSF on the DSG settlement for 2013-14.

2. BACKGROUND

2.1 On 19th December 2012 the DfE announced the details of the school funding settlement for 2013-14.

2.2 This included details of: -

(a) The LA DSG allocations.

(b) Indicative allocations for the Pupil Premium.

3. KEY ISSUES

3.1 On the DSG settlement the key issues are as follows: -

(a) The distribution of the DSG to LAs will continue to be based on the current 'spend- plus' methodology for 2013-14, but the presentation of the settlement has been changed to show three spending blocks for each LA: an early years block, a schools block and a high needs block.

(b) In addition the baselines of LA's have been adjusted to reflect the incidence of high needs pupils and places supported by each LA. The High Needs Block has therefore been adjusted for the ending of inter LA recoupment, the inclusion of post 16 funding and for growth in places.

(d) Although the overall schools budget will stay at the same level on a per pupil basis before the addition of the Pupil Premium, the actual level of each school’s individual budget will vary. To protect schools from significant budget reductions, the DfE will continue with a Minimum Funding Guarantee (MFG) that ensures no school sees more than a 1.5% per pupil reduction in 2013-14 budgets (excluding sixth form funding) compared to 2012-13 and before the Pupil Premium is added.

(e) Funding is also included for early education places for 2-year-olds from lower income households. These allocations are those announced on 27th November 2012. Proposals for this funding stream are discussed further under Agenda Item 10.

(f) In September 2012, the induction regulations changed so that teaching schools can act as the appropriate body to monitor and quality assure NQT induction. In order to allow schools to pay for the services of their preferred appropriate body, the funding for NQT statutory induction of NQTs, currently included in Local Government Revenue Funding, will move into the DSG so that it can be delegated directly to all schools through local funding formulae. The total allocation of £10.2m has been based on average costs, and the number of NQTs entering the system each year. This has been allocated to each LA on a per pupil basis (using the pupil numbers used for the Schools Block).

(g) A summary comparison to the adjusted baseline and the notified DSG is in the following table with a full analysis attached at Appendix A: -

Funding Block Adjusted Baseline Notified DSG Variance £'m £'m £'m School 291.245 290.832 -0.413 68832 pupils 68734 pupils GUF £4,231.27 GUF £4,231.27 Early Years 15.547 15.547 0.000 High Needs 40.259 40.258 -0.001 2 Year Old Funding 3.818 +3.818 NQT's 0.105 +0.105 Total 347.051 350.560 +3.509

(h) An assessment is currently being made of the impact of the reduction in the Schools Block DSG on the new schools funding formula proforma submitted to the EFA on 31st October 2012. There may have to be some adjustments to the units of resource. LAs have until 22nd January 2013 to make any adjustments and submit their final formula proformas.

3.2 On the Pupil Premium the level of funding for 2013-14 for disadvantaged pupils is £900 per pupil. The Service Premium for 2013-14 is £300 per pupil. The DfE have published indicative allocations of the Premium for each LA, Parliamentary constituency and school. As the Pupil Premium is calculated using the pupil numbers from the January school census, final allocations will be confirmed in summer 2013. The indicative allocation for Worcestershire is £12.9m.

3.3 On the High Needs Places and Hospital Provision the key issues are some Further Requirements attached at Appendix B and High Needs Places and Hospital School provision attached at Appendix C. The LA is required to confirm by 25th January 2013 the place numbers and Hospital School provision both of which concur with previous returns made.

3.4 On Other Issues: -

(a) Independent School Transfers

Where independent schools transfer into the maintained sector, in or after April 2013, the actual pupil count used in the Schools Block allocations will be adjusted to add the relevant pupil numbers, depending on when the school transfers and the portion of the year for which it is a maintained school.

(b) Copyright Licensing

The DfE has agreed with the Copyright Licensing Agency (CLA), and the Music Publishers Association (MPA), to purchase a single national licence managed by the DfE for all state-funded schools in England. This means that LAs and schools will no longer need to negotiate individual licences and there will be savings both in administration and in the overall cost of the licence. The DfE will pay the cost, including VAT, to the CLA and will provide this as a service to LAs at a charge. This means that LAs can continue to reclaim VAT on the licences as they do now. These arrangements will cover recoupment Academies as well as maintained schools, and we will allow LAs to hold this money centrally rather than include it in school budgets. The charge for Worcestershire is £135,000 net (£162k gross) and the DfE will confirm shortly how it will be administered. LAs need to take into account that schools will no longer have to pay for these licences when calculating school budgets.

5. RECOMMENDATIONS

5.1 The WSF notes and comments on the issues.

5.2 The WSF authorises the completion of the DfE returns as required.

Andy McHale Service Manager Funding and Business Development January 2013

Table 1: Growth in High Needs Places between FY2012-13 and FY2013-14 Created on: 18 December 2012 Financial Year 2012-13 Financial Year 2013-14 Total Places in Maintaining Number of funded Number of POST- SPECIAL UNITS, Number of LA number Number of funded places in Total Number Of 16 HIGH NEEDS RESOURCED Number of Number of planned places in Total Number Of Academy as Number of funded Total Places in (LA that places in SPECIAL MAINTAINED these funded PUPILS (Years 12 PROVISION and planned places in planned places in MAINTAINED these funded Establishment Provider at 1st places in ALTERNATIVE maintains or Establishment Name UNITS and SPECIAL Specialist High and 13 or MAINTAINED SPECIAL UNITS ALTERNATIVE SPECIAL Specialist High Number5 Type4 December ALTERNATIVE PROVISION used to RESOURCED SCHOOLS or Need Funded equivalent) placed SPECIAL and RESOURCED PROVISION SCHOOLS or Need Funded 2012 PROVISION settings3 settings3 maintain the PROVISION SPECIAL Places in these specialist SCHOOLS OR PROVISION settings3 SPECIAL Places setting) ACADEMIES settings SPECIAL ACADEMIES ACADEMIES Annualised1 Annualised1 Annualised1 Annualised1 Annualised1 Annualised1 Annualised1 Annualised1 Annualised1 Annualised1 Annualised1 885 Worcestershire 7 248.0 179.0 1,199.0 1,626.0 173.0 1,447.0 179.0 261.0 189.0 1,202.0 1,652.0 885 1103 Perryfields Short Stay School PRU 0 0.0 9.0 0.0 9.0 0.0 0.0 9.0 0.0 14.0 0.0 14.0 885 1105 The Beacon Primary Short Stay SchoolPRU 0 0.0 8.0 0.0 8.0 0.0 0.0 8.0 0.0 13.0 0.0 13.0 885 1119 Forest Oak Short-Stay School PRU 0 0.0 46.0 0.0 46.0 0.0 0.0 46.0 0.0 46.0 0.0 46.0 885 1120 Newbridge Short Stay School PRU 0 0.0 68.0 0.0 68.0 0.0 0.0 68.0 0.0 68.0 0.0 68.0 885 1121 The Forge Secondary Short Stay SchoolPRU 0 0.0 48.0 0.0 48.0 0.0 0.0 48.0 0.0 48.0 0.0 48.0 885 2019 Meadows First Primary 0 10.0 0.0 0.0 10.0 0.0 10.0 0.0 12.0 0.0 0.0 12.0 885 2105 Great Malvern Primary School Recoupment Academy1 10.0 0.0 0.0 10.0 0.0 10.0 0.0 10.0 0.0 0.0 10.0 885 2121 Cherry Orchard First Primary 0 8.0 0.0 0.0 8.0 0.0 8.0 0.0 8.0 0.0 0.0 8.0 885 2128 Batchley First Primary 0 6.0 0.0 0.0 6.0 0.0 6.0 0.0 8.0 0.0 0.0 8.0 885 2162 Cranham Primary 0 12.0 0.0 0.0 12.0 0.0 12.0 0.0 12.0 0.0 0.0 12.0 885 2172 Nunnery Wood Primary 0 10.0 0.0 0.0 10.0 0.0 10.0 0.0 10.0 0.0 0.0 10.0 885 2197 Beaconside Primary 0 8.0 0.0 0.0 8.0 0.0 8.0 0.0 9.0 0.0 0.0 9.0 885 2202 Oldbury Park Primary 0 8.0 0.0 0.0 8.0 0.0 8.0 0.0 9.0 0.0 0.0 9.0 885 2204 Somers Park School Recoupment Academy1 6.0 0.0 0.0 6.0 0.0 6.0 0.0 0.0 0.0 0.0 0.0 885 2901 Lickey Hills Primary 0 20.0 0.0 0.0 20.0 0.0 20.0 0.0 21.0 0.0 0.0 21.0 885 2903 Burlish Park Primary 0 10.0 0.0 0.0 10.0 0.0 10.0 0.0 10.0 0.0 0.0 10.0 885 2906 Abbey Park Middle Middle Deemed Primary0 8.0 0.0 0.0 8.0 0.0 8.0 0.0 10.0 0.0 0.0 10.0 885 2910 Franche Community Primary 0 6.0 0.0 0.0 6.0 0.0 6.0 0.0 8.0 0.0 0.0 8.0 885 2919 Matchborough First Primary 0 18.0 0.0 0.0 18.0 0.0 18.0 0.0 19.0 0.0 0.0 19.0 885 3354 St Matthias Church of England PrimaryRecoupment School Academy1 4.0 0.0 0.0 4.0 0.0 4.0 0.0 4.0 0.0 0.0 4.0 885 3369 Sutton Park Primary Primary 0 26.0 0.0 0.0 26.0 0.0 26.0 0.0 27.0 0.0 0.0 27.0 885 4002 North Bromsgrove Secondary 0 8.0 0.0 0.0 8.0 0.0 8.0 0.0 8.0 0.0 0.0 8.0 885 4030 Pershore High School Recoupment Academy1 13.0 0.0 0.0 13.0 0.0 13.0 0.0 15.0 0.0 0.0 15.0 885 4044 Waseley Hills High School Secondary 1 8.0 0.0 0.0 8.0 0.0 8.0 0.0 8.0 0.0 0.0 8.0 885 4438 Kingsley College Secondary 0 10.0 0.0 0.0 10.0 0.0 10.0 0.0 10.0 0.0 0.0 10.0 885 4501 King Charles I Recoupment Academy1 21.0 0.0 0.0 21.0 0.0 21.0 0.0 21.0 0.0 0.0 21.0 885 4579 Walkwood C.E. Middle Middle Deemed Secondary0 10.0 0.0 0.0 10.0 0.0 10.0 0.0 10.0 0.0 0.0 10.0 885 4801 Dyson Perrins Recoupment Academy1 8.0 0.0 0.0 8.0 0.0 8.0 0.0 12.0 0.0 0.0 12.0 885 7001 Rigby Hall School Special 0 0.0 0.0 117.0 117.0 15.0 117.0 0.0 0.0 0.0 117.0 117.0 885 7009 Pitcheroak Special 0 0.0 0.0 134.0 134.0 24.0 134.0 0.0 0.0 0.0 134.0 134.0 885 7011 Vale of Evesham School Special 0 0.0 0.0 171.0 171.0 34.0 171.0 0.0 0.0 0.0 171.0 171.0 885 7015 Chadsgrove School Special 0 0.0 0.0 121.0 121.0 29.0 121.0 0.0 0.0 0.0 121.0 121.0 885 7022 Riversides School Special 0 0.0 0.0 65.0 65.0 0.0 65.0 0.0 0.0 0.0 68.0 68.0 885 7023 The Kingfisher School Special 0 0.0 0.0 52.0 52.0 0.0 52.0 0.0 0.0 0.0 52.0 52.0 885 7024 Regency High Special 0 0.0 0.0 158.0 158.0 46.0 158.0 0.0 0.0 0.0 158.0 158.0 885 7025 Fort Royal Community Primary SchoolSpecial 0 0.0 0.0 165.0 165.0 0.0 165.0 0.0 0.0 0.0 165.0 165.0 885 7026 The Wyre Forest School Special 0 0.0 0.0 216.0 216.0 25.0 216.0 0.0 0.0 0.0 216.0 216.0

Notes: 1. Figures have been annualised from the data provided taking 5/12ths of the Apr-Aug places and 7/12ths of the Sep-Mar places, the places have then been rounded to the nearest whole place. 2. Establishment numbers for 9991 to 9999 have been used where information is not available at the moment. 3. Includes maintained PRUs, other maintained AP, and AP Academies 4. Places in INMSS are not included in this list. 5. Where an establishment was reported multiple times this information has been aggregated into one record per establishment. Table 1: Growth in High Needs Places between FY2012-13 and FY2013-14 Created on: 18 December 2012 Financial Year 2013-14 Total Places in Change in places in Maintaining Number of POST- SPECIAL UNITS, SPECIAL UNITS, LA number 16 HIGH NEEDS RESOURCED RESOURCED Change in places in Academy as Total Places in (LA that PUPILS (Years 12 PROVISION and PROVISION and ALTERNATIVE Provisional Establishment Provider at 1st ALTERNATIVE maintains or Establishment Name and 13 or MAINTAINED MAINTAINED SPECIAL PROVISION settings Growth Number5 Type4 December PROVISION used to equivalent) placed SPECIAL SCHOOLS OR SPECIAL between FY2012-13 Allocation 2012 settings3 maintain the in these specialist SCHOOLS OR ACADEMIES between and FY2013-14 setting) settings SPECIAL FY 2012-13 and FY2013- ACADEMIES 14 Annualised1 Annualised1 Annualised1 Annualised1 Annualised1 885 Worcestershire 7 187.0 1,463.0 189.0 16.0 10.0 £240,000.00 885 1103 Perryfields Short Stay School PRU 0 0.0 0.0 14.0 0.0 5.0 885 1105 The Beacon Primary Short Stay SchoolPRU 0 0.0 0.0 13.0 0.0 5.0 885 1119 Forest Oak Short-Stay School PRU 0 0.0 0.0 46.0 0.0 0.0 885 1120 Newbridge Short Stay School PRU 0 0.0 0.0 68.0 0.0 0.0 885 1121 The Forge Secondary Short Stay SchoolPRU 0 0.0 0.0 48.0 0.0 0.0 885 2019 Meadows First Primary 0 0.0 12.0 0.0 2.0 0.0 885 2105 Great Malvern Primary School Recoupment Academy1 0.0 10.0 0.0 0.0 0.0 885 2121 Cherry Orchard First Primary 0 0.0 8.0 0.0 0.0 0.0 885 2128 Batchley First Primary 0 0.0 8.0 0.0 2.0 0.0 885 2162 Cranham Primary 0 0.0 12.0 0.0 0.0 0.0 885 2172 Nunnery Wood Primary 0 0.0 10.0 0.0 0.0 0.0 885 2197 Beaconside Primary 0 0.0 9.0 0.0 1.0 0.0 885 2202 Oldbury Park Primary 0 0.0 9.0 0.0 1.0 0.0 885 2204 Somers Park School Recoupment Academy1 0.0 0.0 0.0 -6.0 0.0 885 2901 Lickey Hills Primary 0 0.0 21.0 0.0 1.0 0.0 885 2903 Burlish Park Primary 0 0.0 10.0 0.0 0.0 0.0 885 2906 Abbey Park Middle Middle Deemed Primary0 0.0 10.0 0.0 2.0 0.0 885 2910 Franche Community Primary 0 0.0 8.0 0.0 2.0 0.0 885 2919 Matchborough First Primary 0 0.0 19.0 0.0 1.0 0.0 885 3354 St Matthias Church of England PrimaryRecoupment School Academy1 0.0 4.0 0.0 0.0 0.0 885 3369 Sutton Park Primary Primary 0 0.0 27.0 0.0 1.0 0.0 885 4002 North Bromsgrove Secondary 0 0.0 8.0 0.0 0.0 0.0 885 4030 Pershore High School Recoupment Academy1 0.0 15.0 0.0 2.0 0.0 885 4044 Waseley Hills High School Secondary 1 0.0 8.0 0.0 0.0 0.0 885 4438 Kingsley College Secondary 0 0.0 10.0 0.0 0.0 0.0 885 4501 King Charles I Recoupment Academy1 0.0 21.0 0.0 0.0 0.0 885 4579 Walkwood C.E. Middle Middle Deemed Secondary0 0.0 10.0 0.0 0.0 0.0 885 4801 Dyson Perrins Recoupment Academy1 0.0 12.0 0.0 4.0 0.0 885 7001 Rigby Hall School Special 0 15.0 117.0 0.0 0.0 0.0 885 7009 Pitcheroak Special 0 25.0 134.0 0.0 0.0 0.0 885 7011 Vale of Evesham School Special 0 39.0 171.0 0.0 0.0 0.0 885 7015 Chadsgrove School Special 0 27.0 121.0 0.0 0.0 0.0 885 7022 Riversides School Special 0 0.0 68.0 0.0 3.0 0.0 885 7023 The Kingfisher School Special 0 0.0 52.0 0.0 0.0 0.0 885 7024 Regency High Special 0 44.0 158.0 0.0 0.0 0.0 885 7025 Fort Royal Community Primary SchoolSpecial 0 0.0 165.0 0.0 0.0 0.0 885 7026 The Wyre Forest School Special 0 37.0 216.0 0.0 0.0 0.0

Total Hospital Hospital Education Hospital Schools Other Hospital Other Hospital Education Allocation to High Allocation1 Places2 Allocation3 Services Spend4 needs block LA Number LA Name £17,187,345.90 1,411.3 £25,996,636.25 £26,060,498.91 £69,244,481.06 201 City of London £0.00 0.0 £0.00 £0.00 £0.00 202 Camden £1,795,466.00 0.0 £0.00 £0.00 £1,795,466.00 203 Greenwich £0.00 47.3 £870,392.25 £472,250.00 £1,342,642.25 204 Hackney £0.00 0.0 £0.00 £0.00 £0.00 205 Hammersmith and Fulham £0.00 0.0 £0.00 £0.00 £0.00 206 Islington £0.00 8.0 £147,368.00 £174,000.00 £321,368.00 207 Kensington and Chelsea £1,164,880.00 0.0 £0.00 £0.00 £1,164,880.00 208 Lambeth £0.00 0.0 £0.00 £152,000.00 £152,000.00 209 Lewisham £0.00 12.0 £221,052.00 £234,000.00 £455,052.00 210 Southwark £1,841,035.38 0.0 £0.00 £0.00 £1,841,035.38 211 Tower Hamlets £0.00 0.0 £0.00 £460,000.00 £460,000.00 212 Wandsworth £0.00 0.0 £0.00 £527,596.00 £527,596.00 213 Westminster £0.00 0.0 £0.00 £297,123.00 £297,123.00 301 Barking and Dagenham £0.00 0.0 £0.00 £169,800.00 £169,800.00 302 Barnet £0.00 0.0 £0.00 £510,000.00 £510,000.00 303 Bexley £0.00 16.0 £294,736.00 £0.00 £294,736.00 304 Brent £0.00 0.0 £0.00 £0.00 £0.00 305 Bromley £0.00 0.0 £0.00 £0.00 £0.00 306 Croydon £0.00 0.0 £0.00 £340,752.00 £340,752.00 307 Ealing £0.00 0.0 £0.00 £80,000.00 £80,000.00 308 Enfield £0.00 0.0 £0.00 £307,500.00 £307,500.00 309 Haringey £0.00 0.0 £0.00 £0.00 £0.00 310 Harrow £0.00 0.0 £0.00 £95,782.00 £95,782.00 311 Havering £0.00 0.0 £0.00 £75,000.00 £75,000.00 312 Hillingdon £0.00 0.0 £0.00 £0.00 £0.00 313 Hounslow £0.00 28.0 £515,788.00 £0.00 £515,788.00 314 Kingston upon Thames £0.00 0.0 £0.00 £0.00 £0.00 315 Merton £0.00 0.0 £0.00 £0.00 £0.00 316 Newham £0.00 0.0 £0.00 £0.00 £0.00 Table 2: Hospital Education Allocations for 2013-14 High Needs Block Created on: 18 December 2012 Please confirm the information in column G is correct

Total Hospital Hospital Education Hospital Schools Other Hospital Other Hospital Education Allocation to High Allocation1 Places2 Allocation3 Services Spend4 needs block LA Number LA Name £17,187,345.90 1,411.3 £25,996,636.25 £26,060,498.91 £69,244,481.06 317 Redbridge £0.00 0.0 £0.00 £283,031.00 £283,031.00 318 Richmond upon Thames £0.00 0.0 £0.00 £0.00 £0.00 319 Sutton £0.00 0.0 £0.00 £266,300.00 £266,300.00 320 Waltham Forest £0.00 0.0 £0.00 £363,100.00 £363,100.00 330 Birmingham £3,286,039.00 0.0 £0.00 £0.00 £3,286,039.00 331 Coventry £0.00 0.0 £0.00 £393,982.00 £393,982.00 332 Dudley £0.00 0.0 £0.00 £437,000.00 £437,000.00 333 Sandwell £0.00 20.0 £368,420.00 £150,000.00 £518,420.00 334 Solihull £0.00 0.0 £0.00 £0.00 £0.00 335 Walsall £0.00 0.0 £0.00 £335,000.00 £335,000.00 336 Wolverhampton £0.00 20.0 £368,420.00 £0.00 £368,420.00 340 Knowsley £0.00 0.0 £0.00 £80,528.00 £80,528.00 341 Liverpool £742,652.56 0.0 £0.00 £572,822.00 £1,315,474.56 342 St Helens £0.00 0.0 £0.00 £0.00 £0.00 343 Sefton £0.00 0.0 £0.00 £0.00 £0.00 344 Wirral £1,097,031.20 0.0 £0.00 £0.00 £1,097,031.20 350 Bolton £0.00 0.0 £0.00 £550,000.00 £550,000.00 351 Bury £821,740.54 0.0 £0.00 £0.00 £821,740.54 352 Manchester £1,340,275.44 0.0 £0.00 £0.00 £1,340,275.44 353 Oldham £0.00 0.0 £0.00 £445,384.00 £445,384.00 354 Rochdale £0.00 0.0 £0.00 £0.00 £0.00 355 Salford £0.00 0.0 £0.00 £0.00 £0.00 356 Stockport £0.00 0.0 £0.00 £0.00 £0.00 357 Tameside £0.00 0.0 £0.00 £0.00 £0.00 358 Trafford £0.00 0.0 £0.00 £0.00 £0.00 359 Wigan £0.00 71.0 £1,307,891.00 £0.00 £1,307,891.00 370 Barnsley £0.00 0.0 £0.00 £111,000.00 £111,000.00 371 Doncaster £0.00 0.0 £0.00 £256,000.00 £256,000.00 372 Rotherham £0.00 0.0 £0.00 £0.00 £0.00 Table 2: Hospital Education Allocations for 2013-14 High Needs Block Created on: 18 December 2012 Please confirm the information in column G is correct

Total Hospital Hospital Education Hospital Schools Other Hospital Other Hospital Education Allocation to High Allocation1 Places2 Allocation3 Services Spend4 needs block LA Number LA Name £17,187,345.90 1,411.3 £25,996,636.25 £26,060,498.91 £69,244,481.06 373 Sheffield £915,811.24 30.0 £552,630.00 £0.00 £1,468,441.24 380 Bradford £0.00 33.0 £607,893.00 £452,700.00 £1,060,593.00 381 Calderdale £0.00 0.0 £0.00 £0.00 £0.00 382 Kirklees £0.00 0.0 £0.00 £0.00 £0.00 383 Leeds £0.00 0.0 £0.00 £604,880.00 £604,880.00 384 Wakefield £521,546.51 0.0 £0.00 £564,312.91 £1,085,859.42 390 Gateshead £0.00 50.0 £921,050.00 £310,000.00 £1,231,050.00 391 Newcastle upon Tyne £603,382.15 0.0 £0.00 £710,290.00 £1,313,672.15 392 North Tyneside £0.00 0.0 £0.00 £0.00 £0.00 393 South Tyneside £0.00 0.0 £0.00 £133,000.00 £133,000.00 394 Sunderland £0.00 0.0 £0.00 £53,376.00 £53,376.00 800 Bath and North East Somerset £0.00 0.0 £0.00 £138,317.00 £138,317.00 801 Bristol City of £0.00 0.0 £0.00 £1,879,000.00 £1,879,000.00 802 North Somerset £0.00 0.0 £0.00 £0.00 £0.00 803 South Gloucestershire £0.00 36.0 £663,156.00 £0.00 £663,156.00 805 Hartlepool £0.00 0.0 £0.00 £0.00 £0.00 806 Middlesbrough £0.00 65.0 £1,197,365.00 £0.00 £1,197,365.00 807 Redcar and Cleveland £0.00 0.0 £0.00 £318,250.00 £318,250.00 808 Stockton-on-Tees £0.00 0.0 £0.00 £25,000.00 £25,000.00 810 Kingston upon Hull City of £0.00 0.0 £0.00 £459,000.00 £459,000.00 811 East Riding of Yorkshire £0.00 0.0 £0.00 £0.00 £0.00 812 North East Lincolnshire £0.00 0.0 £0.00 £0.00 £0.00 813 North Lincolnshire £0.00 0.0 £0.00 £0.00 £0.00 815 North Yorkshire £0.00 0.0 £0.00 £0.00 £0.00 816 York £0.00 0.0 £0.00 £130,100.00 £130,100.00 821 Luton £0.00 0.0 £0.00 £45,861.00 £45,861.00 822 Bedford Borough £0.00 33.0 £607,893.00 £264,000.00 £871,893.00 823 Central Bedfordshire £0.00 0.0 £0.00 £0.00 £0.00 825 Buckinghamshire £0.00 0.0 £0.00 £0.00 £0.00 Table 2: Hospital Education Allocations for 2013-14 High Needs Block Created on: 18 December 2012 Please confirm the information in column G is correct

Total Hospital Hospital Education Hospital Schools Other Hospital Other Hospital Education Allocation to High Allocation1 Places2 Allocation3 Services Spend4 needs block LA Number LA Name £17,187,345.90 1,411.3 £25,996,636.25 £26,060,498.91 £69,244,481.06 826 Milton Keynes £0.00 0.0 £0.00 £0.00 £0.00 830 Derbyshire £0.00 0.0 £0.00 £0.00 £0.00 831 Derby £0.00 0.0 £0.00 £131,862.00 £131,862.00 835 Dorset £0.00 8.0 £147,368.00 £48,600.00 £195,968.00 836 Poole £0.00 25.0 £460,525.00 £0.00 £460,525.00 837 Bournemouth £0.00 0.0 £0.00 £0.00 £0.00 840 Durham £0.00 0.0 £0.00 £19,582.00 £19,582.00 841 Darlington £0.00 10.0 £184,210.00 £0.00 £184,210.00 845 East Sussex £0.00 0.0 £0.00 £0.00 £0.00 846 Brighton and Hove £0.00 0.0 £0.00 £0.00 £0.00 850 Hampshire £0.00 124.0 £2,284,204.00 £206,100.00 £2,490,304.00 851 Portsmouth £0.00 0.0 £0.00 £440,000.00 £440,000.00 852 Southampton £0.00 0.0 £0.00 £452,400.00 £452,400.00 855 Leicestershire £0.00 0.0 £0.00 £0.00 £0.00 856 Leicester £606,268.07 0.0 £0.00 £0.00 £606,268.07 857 Rutland £0.00 0.0 £0.00 £0.00 £0.00 860 Staffordshire £0.00 0.0 £0.00 £195,220.00 £195,220.00 861 Stoke-on-Trent £0.00 12.0 £221,052.00 £128,000.00 £349,052.00 865 Wiltshire £0.00 10.0 £184,210.00 £0.00 £184,210.00 866 Swindon £0.00 15.0 £276,315.00 £191,000.00 £467,315.00 867 Bracknell Forest £0.00 0.0 £0.00 £0.00 £0.00 868 Windsor and Maidenhead £0.00 0.0 £0.00 £0.00 £0.00 869 West Berkshire £0.00 0.0 £0.00 £0.00 £0.00 870 Reading £0.00 0.0 £0.00 £111,000.00 £111,000.00 871 Slough £0.00 0.0 £0.00 £120,000.00 £120,000.00 872 Wokingham £0.00 0.0 £0.00 £505,523.00 £505,523.00 873 Cambridgeshire £0.00 50.0 £921,050.00 £0.00 £921,050.00 874 Peterborough £0.00 0.0 £0.00 £152,531.00 £152,531.00 876 Halton £0.00 0.0 £0.00 £0.00 £0.00 Table 2: Hospital Education Allocations for 2013-14 High Needs Block Created on: 18 December 2012 Please confirm the information in column G is correct

Total Hospital Hospital Education Hospital Schools Other Hospital Other Hospital Education Allocation to High Allocation1 Places2 Allocation3 Services Spend4 needs block LA Number LA Name £17,187,345.90 1,411.3 £25,996,636.25 £26,060,498.91 £69,244,481.06 877 Warrington £0.00 0.0 £0.00 £311,525.00 £311,525.00 878 Devon £0.00 0.0 £0.00 £250,100.00 £250,100.00 879 Plymouth £0.00 34.0 £626,314.00 £0.00 £626,314.00 880 Torbay £0.00 0.0 £0.00 £0.00 £0.00 881 Essex £0.00 0.0 £0.00 £0.00 £0.00 882 Southend-on-Sea £0.00 0.0 £0.00 £0.00 £0.00 883 Thurrock £0.00 0.0 £0.00 £0.00 £0.00 884 Herefordshire £0.00 0.0 £0.00 £120,845.00 £120,845.00 885 Worcestershire £0.00 0.0 £0.00 £360,033.00 £360,033.00 886 Kent £0.00 0.0 £0.00 £2,399,671.00 £2,399,671.00 887 Medway £0.00 0.0 £0.00 £0.00 £0.00 888 Lancashire £0.00 200.0 £3,684,200.00 £0.00 £3,684,200.00 889 Blackburn with Darwen £0.00 7.0 £128,947.00 £0.00 £128,947.00 890 Blackpool £0.00 56.0 £1,031,576.00 £0.00 £1,031,576.00 891 Nottinghamshire £0.00 0.0 £0.00 £0.00 £0.00 892 Nottingham £0.00 14.0 £257,894.00 £468,674.00 £726,568.00 893 Shropshire £0.00 0.0 £0.00 £90,761.00 £90,761.00 894 Telford and Wrekin £0.00 0.0 £0.00 £0.00 £0.00 895 Cheshire East £0.00 0.0 £0.00 £0.00 £0.00 896 Cheshire West and Chester £0.00 0.0 £0.00 £360,000.00 £360,000.00 908 Cornwall £0.00 65.0 £1,197,365.00 £369,416.00 £1,566,781.00 909 Cumbria £0.00 120.0 £2,210,520.00 £0.00 £2,210,520.00 916 Gloucestershire £0.00 73.0 £1,344,733.00 £209,002.00 £1,553,735.00 919 Hertfordshire £276,091.60 0.0 £0.00 £1,302,999.00 £1,579,090.60 921 Isle of Wight £0.00 0.0 £0.00 £0.00 £0.00 925 Lincolnshire £836,100.00 0.0 £0.00 £408,510.00 £1,244,610.00 926 Norfolk £0.00 0.0 £0.00 £25,000.00 £25,000.00 928 Northamptonshire £0.00 0.0 £0.00 £817,905.00 £817,905.00 929 Northumberland £0.00 0.0 £0.00 £0.00 £0.00 Table 2: Hospital Education Allocations for 2013-14 High Needs Block Created on: 18 December 2012 Please confirm the information in column G is correct

Notes: 1. Allocations made in respect of Hospital Schools in the LA 2. Hospital places which are not at a Hospital School 3. Result of multiplying the Other Hospital Places by the average net cost of a PRU places in 2012-13 (£18,421) 4. Amount spent on Hospital Education which is not covered by the other columns AGENDA ITEM 5b) WORCESTERSHIRE SCHOOLS FORUM 11th JANUARY 2013

REPORT TO THE WORCESTERSHIRE SCHOOLS FORUM (WSF) SCHOOL FUNDING SETTLEMENT 2013-14 – EDUCATION SERVICES GRANT (ESG)

1. PURPOSE

1.1 To advise the WSF on the new ESG for 2013-14.

2. BACKGROUND

2.1 On 17th July 2012, the DfE previously consulted on proposals to replace the LA LACSEG which funds LAs and academies for the functions that are devolved to academies.

2.2 On 19th December 2012 as part of the school funding settlement for 2013-14 the DfE published the Government response to the consultation.

3. DECISIONS MADE

3.1 From 2013-14, new funding arrangements for education services will apply LAs and academies.

3.2 LA Block LACSEG for academies, and the corresponding element of Local Government Revenue Funding, will be replaced by a new Education Services Grant (ESG). The ESG will be allocated on a simple per pupil basis to LAs and academies according to the number of pupils for whom they are responsible.

3.3 In July 2012 the DfE proposed that £1.22 billion should be transferred from Local Government revenue funding for the ESG. This was based on expenditure data for 2011- 12. LAs responding to the consultation contended that this amount was too high because LAs were now spending less on these services. LAs asked the DfE to recalculate the funding transfer based on section 251 budget data for 2012-13.

3.4 This has been considered and, in order to ensure that the money transferred from Local Government is no greater than the amount being spent on these services nationally, the DfE have decided to reduce the funding transfer in line with reductions in LA expenditure for 2012-13. The total funding transfer from Local Government revenue funding is £1.04 billion in 2013-14. This is £180 million less than originally proposed. In 2014-15 the total funding transfer for the ESG is £1.03 billion.

3.5 Funding will be transferred from LAs on a simple per pupil basis. The ESG will be allocated using the same per pupil rates. The new grant will be paid for all pupils aged 3 to 19 in state-funded schools, including maintained schools, academies and Free Schools. In 2013-14 the single, national per pupil rate will be £116.46. Multipliers will apply for pupils in PRUs and special schools, of 3.75 and 4.25 respectively giving national rates of £436.25 and £494.96 respectively.

3.6 LAs will also receive £15 for all pupils for the statutory duties that do not transfer to academies. This means that LAs will receive £116 per pupil for pupils in the schools they maintain, plus £15 per pupil for all pupils in the LA area for their retained statutory duties.

3.7 Provisional 2013-14 ESG allocations for LAs will be confirmed early in 2013, based on the number of pupils in maintained schools and academies at that time. The DfE intend to publish the rates for 2014-15, calculated using October 2013 school census data and the funding transfer of £1.03 billion, by the end of 2013.

3.8 As a transitional protection, the DfE will set the ESG rate for academies at £150 in 2013/14 and £140 in 2014/15. This protection will be funded from the DfE budget and not from the funding transferred from Local Government. The transitional protections for academies will be removed from the system over a limited period of time so that the rates for LAs and academies are brought together.

3.9 As assessment of the impact will be finalised in early 2013 as soon as the ESG allocation is confirmed.

4. RECOMMENDATIONS

4.1 The WSF notes and comments on the issues.

Andy McHale Service Manager Funding and Business Development January 2013 AGENDA ITEM 5c) WORCESTERSHIRE SCHOOLS FORUM 11th JANUARY 2013

REPORT TO THE WORCESTERSHIRE SCHOOLS FORUM (WSF) DEDICATED SCHOOLS GRANT (DSG) 2013-14 – PUPIL GROWTH FUND AND SCHOOL SPECIFIC CONTINGENCY PROPOSALS

1. PURPOSE

1.1 To advise the WSF on the requirements on these from 2013-14.

2. PUPIL GROWTH FUND

2.1 As part of the new funding arrangements for schools the DfE have agreed the following arrangements for this area: -

(a) Initially the DfE in March 2012 said that maintained schools facing significant pupil number growth could be supported through de-delegated contingency funding, but that LAs would not be able to top-slice to build a contingency budget for this purpose. As autonomous institutions, Academies would be expected to manage pupil growth from within their own budgets in the first instance but could work with the EFA if exceptional budget pressure arose.

(b) The DfE felt under this arrangement, there is a risk of uncoordinated growth provision and so to mitigate this risk introduced an alternative arrangement.

(c) LAs are now able to create a growth fund from the DSG in advance of allocating school budget shares. The growth fund will need to be ring-fenced so that it is only used for the purposes of supporting growth in pupil numbers to meet basic need and will be for the benefit of both Maintained Schools and Academies. Any funds remaining at the end of the financial year must be added to the following year’s DSG and reallocated to Maintained Schools and Academies through the local formula.

(d) LAs are required to produce criteria on which any growth funding is to be allocated. These should provide a transparent and consistent basis for the allocation of all growth funding. The criteria should both set out the circumstances in which a payment could be made and provide a basis for calculating the sum to be paid.

(e) LAs will need to propose the criteria to their Schools Forum and gain its agreement before growth funding is allocated. The LA will also need to consult their Schools Forum on the total sum to be top-sliced and must regularly update the Schools Forum on the use of the funding. It is essential that the use of the growth fund is entirely transparent and solely for the purposes of supporting growth in pupil numbers.

(f) Eligible expenditure on growth can include funding schools and Academies where very limited pupil growth nevertheless requires an additional class, as required by class size regulations.

2.2 Proposals for Consideration

(a) It is proposed that the scheme and qualification for funding is based upon a set of 'Guiding Principles' as follows: - Additional funding will be made available in circumstances where: -  The LA carries out a formal consultation and approves to increase the capacity of a school.  The LA requests schools to increase their PAN and the school has the capacity. Additional funding will be made in relation to the number of additional pupils taken. Funding will be given on a 7/12 basis to cover September to March each year. (The period April to August will be covered by the schools budget based on numbers from the October census). Any allocation will be based upon the AWPU and will be relevant to the key stage. No allocation will be made to a school that has not been the subject of a consultation where a school: -  Has surplus places and then takes additional children up to the PAN.  Admits over PAN at their own choice.  Is directed and/or requested to admit additional pupils as result of errors, appeals, fair access panel, SEN, LAC, etc as these numbers will be extremely low on an individual school basis.

(b) In terms of the allocation the following options are available: - Option 1 – The LA agrees to fund the increase in number regardless of whether or not the school fills to PAN. For example in a primary school an increase in PAN from 30 to 45 requires 15 pupils at the AWPU rate for September to March. This gives stability and simplicity but could fund unfilled places. Option 2 – Assess when the school needs an additional class as the increase in PAN moves through the school and fund the additional numbers at the AWPU rate September to March. This would not provide in year stability, is complex to operate and could fund unfilled places. Option 3 – Funding allocated on difference in pupils leaving and joining. For example in a primary school between the numbers leaving Year 6 and numbers entering Reception for 7 years from date of increased capacity. This would be on actual numbers but could provide funding instability. Option 4 – Funding allocated on difference between the previous PAN and numbers entering. For example in a primary school between previous PAN and the number entering Reception for 7 years from date of increased capacity. This would be on actual numbers but could provide funding instability.

3. SCHOOL SPECIFIC CONTINGENCY (SSC)

3.1 The WSF are reminded of the requirements for this current central DSG budget to be delegated to all Maintained Schools and Academies in the first instance. The LA is able to recommend de-delegation for maintained schools only through its Schools Forum following consultation with all schools.

3.2 As part of the Autumn Term 2012 consultation it has been agreed to de-delegate an amount from primary and secondary maintained schools to support a SSC budget.

3.3 The WSF are reminded that the DfE definition of contingencies is as follows: -

(a) Contingencies can be retained centrally for maintained schools but only for a limited range of circumstances:- Exceptional unforeseen costs which it would be unreasonable to expect governing bodies to meet. Additional costs relating to new, reorganised or closing schools. Schools in financial difficulties.

(b) On the first two of these it is recommended that a SSC fund is kept. For the final one the Autumn Term 2012 approved to delegate the existing fund for the LAs scheme to support Schools in Financial Difficulty so this will not be able to be supported through the SSC and the existing scheme will cease.

(c) These arrangements will also need to include any allocations already agreed from previous years that need continued funding. This will not be a significant call on the SSC.

4. BUDGETARY IMPLICATIONS

4.1 The existing SCC net of Academies central DSG LACSEG is £0.7m.

4.2 Given the DfE restrictions on the use of the SSC together with an assessment of its existing use it is proposed to have in 2013-14 arrangements based upon the parameters in the above sections 2 and 3 as follows with there being flexibility between the areas: - Pupil Growth Fund of £0.2m for Maintained Schools and Academies only. SSC Fund of £0.2m for Maintained Schools only.

4.3 This results in some additional delegation to schools of £0.3m.

4.4 The LA is required to agree these arrangements with the WSF as well as advising of allocations made during the year. The DfE have set arrangements for the use of any unspent funds remaining at the end of the financial year.

5. RECOMMENDATIONS

5.1 The WSF notes and comments on the issues.

5.2 The WSF agrees: -

(a) The 'Guiding Principles' for qualification for funding detailed in section 2.2 (a).

(a) Which of the options, detailed in section 2.2 (b), to implement for allocating from the Pupil Growth Fund.

(b) To the use of the SSC as detailed in section 3.3.

Andy McHale Service Manager Funding and Business Development January 2013 AGENDA ITEM 10 WORCESTERSHIRE SCHOOLS FORUM 11th JANUARY 2013

REPORT TO THE WORCESTERSHIRE SCHOOLS FORUM (WSF) FREE NURSERY EDUCATION FOR 2 YEAR OLDS

1. PURPOSE

1.1 To advise the WSF on the recent DfE announcement on early education places for 2 year olds.

1.2 To agree with the WSF the funding hourly rate and other financial issues.

2. BACKGROUND

2.1 On 27th November 2011 the DfE announced: - Revenue funding allocations to LAs to secure early education places for 2 year olds from families meeting the benefits-related eligibility criteria also used for free school meals, and looked after children. This will part of the DSG in 2013-14. Capital funding allocations for the 2012-13 financial year.

2.2 The key documents are attached: - The written ministerial statement (Appendix A). The letter to LAs detailing the issues (Appendix B). The allocations to LAs (Appendix C). Frequently asked questions (Appendix D).

2.3 Current Offer – 2011/12

WCC are currently funding approximately 450 places, for 10 hours per week, for 2 terms (maximum of 27 weeks) with a budget of £700,000. The current offer is based on the free funded hours provided previously as part of a Government funded trial project. The current eligibility criteria are based on families accessing workless benefits or a higher rate of child tax credit as well and being registered with a Worcestershire Children's Centre.

2.4 Future Offer – 2013/14

(a) From 1st September 2013, free early education will become a statutory entitlement for eligible two year olds with the LA having a duty to secure provision. This is expected to be around 20% of two year olds. WCC will be required to offer approximately 1300** free two year old places, based on 15 hours per week for 38 weeks of the year (3 terms). The funding will be for all children who meet the FSM criteria or are LAC.

(b) Under the current criteria there is a take-up of about 83% of eligible two year olds. The funding allocation and target for 2013/14 is based on 992 children (this is the indicative number of eligible children between September 2013 and April 2014). In order to meet the requirement to offer eligible 2 year olds three terms of free nursery education, starting the term which follows their 2nd birthday, the extended entitlement should be available from April 2013 so by September 2013 the offer is in place.

2.5 Future Offer – 2014/15

From September 2014 this is expected to be around 40% of two year olds. WCC will be offering approximately 2500** free two year old places, based on 15 hours per week for 38 weeks of the year. This will include children who are LAC or meeting the FSM criteria, as well as children from households in receipt of working tax credit and an income of less than £16,190, or children who have complex additional needs. The Government recently consulted on proposed eligibility criteria for this extended entitlement and the analysis should be published in early 2013.

** These are the expected numbers of eligible children within WCC according to the DfE.

3. KEY ISSUES FOR CONSIDERATION

3.1 Revenue Funding

(a) The budget for this service is part of DSG which is ring fenced for education purposes for children aged 2-16. The 2 year old funding allocated is not ring fenced for use on 2 year olds. LAs are responsible for taking decisions on the use of the DSG in consultation with the WSF. However, funding is intended to support delivery of the 2 year old entitlement from September 2013 as well as building towards the extended entitlement from September 2014.

(b) The allocation for 2013/14 is £3,817,874 and consists of two elements: - Statutory Place Funding £2,741,597 Trajectory Building £1,076,277

3.2 Statutory Place Funding

(a) Across all LAs this is based upon an average hourly rate of £5.09. Using the current actual numbers the WCC rate is approximately £4.85 per hour compared to £4.50 in the historic 2007/08 allocation. Decisions about the hourly rate are for the LA to take.

(b) It is recommended that the rate of £5.00 per hour is set for Early Years settings (excluding childminders): this is feasible given the funding allocation and also it generally aligns to parental fees. On this basis no additional supplement will be paid for children in the category of EY action or EY action plus; a high percentage of children will fall into these categories, so this will be funded from the proposed hourly rate. Supplements will be paid for children in the category of Early Years Enhanced or Early Years Statutory Assessment (see below). The hourly rate for childminders will remain at £4.50, as this aligns to parental fees. WCC Children's Services have agreed the recommendation.

(c) It is also proposed that supplements will be paid for children in the category of Early Years Enhanced or Early Years Statutory Assessment. Proposals for this are detailed in section 3.3.

3.3 Trajectory Building Funding

(a) The DfE directive is that this funding should be used, in the main, to create non- statutory places in preparation for the 2014 entitlement for 40% of 2 year olds, as well as meeting the 20% target. This includes support for 2 year olds with additional needs. It is unlikely that there will be sufficient funding in the High Needs Block to support funded 2 year olds, although it is implied by the DfE that early years should be supported by the High Needs allocation.

(b) It is therefore proposed that an element of the trajectory funding is used to support children with complex needs by adding a supplement to the £5.00 per hour: enhanced (£1.44 per hour) or statutory assessment (£2.70 per hour). This will replicate the Single Funding Formula SEN Supplement for 3-4 year olds, which is currently under consultation, for introduction from 2013-14.

(c) A list of the proposed uses of this funding is detailed in Appendix E. Overall, the trajectory funding supports capacity building and quality to move satisfactory settings to good/outstanding through training, providing appropriate resources and the development a focused improvement plan.

(d) The majority is one off expenditure which will transfer to statutory place funding as the number of 2 years olds, receiving the set hourly rate, increases.

3.4 Capital Funding

(a) The allocation of £742,127 is not time-bound or ring fenced beyond it having to be spent on any capital purpose.

(b) A recent survey was undertaken by EYCS with existing early year's providers and twenty settings expressed an interest in either offering free nursery education for 2 year olds for the first time or expanding existing provision. Fifteen (75%) of these settings require refurbishments or a conversion to provide the required facilities.

(c) It is proposed that an Early Years Capital steering group is established to develop criteria for funding and to oversee the allocation. Members will consist of representation from Finance, Schools Accommodation, Property Service and Early Years. Links with existing capital projects will be made to: - Endorse the directive that this capital supports Children's Services schemes only with a specific focus on supporting places for 2 year olds. Delegate responsibility to the steering group to allocate capital funding.

(d) It is further proposed the decision making considers: - Setting maximum amounts for various projects. Match funding from providers for amounts over a specific sum. Ensures that a claw-back agreement is issued to PVI and maintained to providers accessing capital. SLAs/contracts are also issued to providers accessing capital.

3.5 Future Allocations

For 2014/15 funding will be allocated on a formula basis and not on participation levels. After 2015 the DfE propose that funding will be allocated according to participation based on the Early Years Census.

3.6 Other Issues

(a) Research evidence is clear that high quality early education is critical to the success of the 2 year old entitlement. The DfE intend to revise the Code of Practice for 3 and 4 year olds to include requirements for settings offering free places for 2 year olds. The future requirement will be that all 2 year olds access their free entitlement in good/outstanding settings.

(b) The Provider Agreement outlines WCC's quality requirements i.e. OFSTED, ECERS/ITERS – national evidence based quality audit schemes, staff qualifications and LA engagement. Settings failing to meet this criteria risk removal from the register of funded settings.

4. RECOMMENDATIONS

4.1 The WSF notes and comments on the issues.

4.2 The WSF agrees to: - The proposed hourly rate of £5.00 to be paid to early years providers for eligible 2 year olds from 2013-14. The SEN supplement to be paid to early years providers for enhanced (£1.44 per hour) or statutory assessment (£2.70 per hour) from 2013-14. The proposed expenditure in Appendix E for the trajectory funding. The proposed process in section 3.4 for the allocation of capital funding.

Cath Ellicott Temporary Service Manager Early Years and Childcare

Andy McHale Service Manager Funding and Business Development

January 2013 AGENDA ITEM 6a) WORCESTERSHIRE SCHOOLS FORUM 11th JANUARY 2013

Department for Education Infrastructure and Funding Group Sanctuary Buildings Great Smith Street Westminster London SW1P 3BT

Tel: 0370 000 2288 Email enquiry form: www.education.gov.uk/help/contactus

Ms Gail Quinton Worcestershire County Council County Hall Spetchley Road Worcester WR5 2NP

18 December 2012 Dear Colleague,

I wrote to you on the 10 October about the reforms we are making to the school funding system. In that letter I confirmed that we would be carrying out a review in early 2013 of the impact of the simpler formulae on schools. Since then we have been doing some further thinking about what the review might entail. We have now finalised these plans with Ministers and I can inform you that the review will aim to answer three key questions:

1. Are we moving towards national consistency? 2. Are there any unintended consequences as a result of the changes we made in 2013-14? 3. What are the main issues for local authorities and providers in implementing the high need reforms?

We are keen to work closely with local authorities in answering these questions and I am writing to seek your agreement to be one of our ‘case study’ authorities. This would involve a one-day visit from members of the review team to talk to you (if you are available), your finance officers and representatives from your Schools Forums.

The visit would take place between mid-January and mid-February to ensure that we have enough time to gather and analyse all the evidence in case there is a need to make changes to inform budgets for 2014-15. However we are aware that authorities will be extremely busy between now and March in finalising school budgets so it would be helpful if you could contact Anita McLoughlin (contact details below) to confirm whether or not you would be willing to help with the review. If you are able to take part we will then arrange mutually convenient time for the review team to visit your authority.

I would like to take this opportunity to thank you for your continued help and support in implementing these reforms. It is crucial that we get the reforms right and that we continue to move towards national consistency so that we are in the right place to implement a national funding formula in the next spending period. . Yours sincerely,

Sarah Healey Director Education Funding Group

Contact Details: Anita McLoughlin Email: [email protected] Telephone: 020 734 07979

APPENDIX A

Gail Quinton Director of Children's Services

Children's Services, County Hall, Sarah Healey, Spetchley Road, Director, WORCESTER. Education Funding Group, WR5 2NP Sanctuary Buildings, Great Smith Street, Westminster, 20th December 2012 LONDON. SW1P 3BT Our Ref: GQ/AS

Ask for: Alison Stanley Dear Sarah,

Thank you for your letter of 18th December 2012 detailing your plans to review in early 2013 the impact of the simpler funding arrangements for schools.

The County Council very much welcomes the launching of the review on the aspects detailed in your letter and I can confirm that Worcestershire would be delighted to be part of the review.

Given the local impact that the requirements for mainstream formula implementation are having in Worcestershire you will no doubt be aware of the correspondence already between the County Council and the DfE.

This has happened both politically between Councillor Adrian Hardman the Leader of Worcestershire County Council and David Laws MP the Schools Minister and at officer level too.

As a consequence of this a meeting has already been arranged for the afternoon of 17th January 2013 to include Dugald Sandeman and County Council officers and Cabinet Members to discuss issues affecting Worcestershire. The County Council still wants this meeting to take place prior to the further one-day visit as part of the national review.

I would be grateful if you could contact Stephanie Simcox 01905 766342 [email protected] my Head of Finance and Resources to make arrangements for the subsequent review visit.

I trust this meets your requirements.

With very best wishes,

Yours sincerely,

Gail Quinton Director of Children's Services c.c. Anita McLoughlin, DfE

Tel: 01905 766303 • Fax: 01905 766860 • Minicom: 01905 766399 Email: [email protected] • DX 29941 Worcester 2 www.worcestershire.gov.uk

AGENDA ITEM 6b) WORCESTERSHIRE SCHOOLS FORUM 11th JANUARY 2013

Rt Hon David Laws MP Minister of State for Schools Department of Education Sanctuary Buildings 20 Great Smith Street Westminster LONDON SW1P 3BT 17 December 2012

Dear Minister of State

F40 – A paper to show how the current changes to funding are impacting at a local level

You will recall that at our last meeting on the 19 November 2012, the f40 delegation flagged up to you a number of extremely serious impacts that were being experienced by schools and local authorities as a result of current changes to school funding. You asked us to gather evidence of the impacts and to send them to you.

I am attaching a collection of some of the current feedback from f40 local authorities, which we feel you should consider. F40 is extremely concerned, as you should be also, that the serious impacts identified are detrimental to the education of our children and to the future operation of schools – both maintained and academies.

Virtually every section of the report presents financial issues that have serious consequences for education, but in particular I would draw your attention to concern about the fixed single block sum. Unless the block sum issue is thought through in detail and in the context of its intrinsic mathematics rather than an ideological view that it must be simple and transparent , there will remain a step change in funding levels between local authority areas and between broadly similar schools and academies only a few miles apart. This is clearly not going to achieve a fairer funding arrangement, but rather increased variation and further inequity.

Another key issue is the uncertainty surrounding MFG, which promises protection but which is meaningless until we know the nature of national funding distribution.

Also, the funding transfer for local authorities for academies is more complicated than just pounds per pupil. The amount an academy receives needs to be considered as does the amount a local authority transfers. It’s not as simple as A+B=C: the new system is more expensive and the government’s failure to recognise that fact is going to impact on children and young people somewhere in the system. The funding needs to be fair to all pupils wherever they are educated.

I am sure you will agree that maintained schools and academies facing a significant funding shift need to be able to plan and need time to adjust to changes introduced as part of the funding reform. In our view that is impossible in the current climate. Tackling ‘local’ distribution before agreeing ‘national’ distribution makes no sense whatsoever. The issue of stability for local authorities and the services they provide to both maintained schools and academies is also clear. At what point does the government intend or plan to consider a local collaborative structure to replace collapsing local authority provision?

As a group that represents local authorities which are determined to achieve fairer funding for all children and young people, we believe that the current path being followed by the government is damaging the future of education. Our Impacts paper clearly demonstrates the seriousness of the current situation and we hope you will consider how to act to improve matters before it is too late.

Yours sincerely

Ivan Ould Chair of f40

APPENDIX A

A COLLECTION OF RESPONSES FROM f40 MEMBERS HIGHLIGHTING THE IMPACTS OF CURRENT SCHOOL FUNDING CHANGES ON LOW FUNDED AUTHORITIES.

This paper has been prepared in response to a request for information made by the Rt Hon David Laws MP, Minister of State for Schools at a meeting with f40 representatives on 19 November 2012. This paper compliments a separate paper showing the same information in local authority Case Studies.

Taking the responses received from individual local authorities, this document has been aggregated by subject matter with references to the appropriate responder clearly marked. The intention is to clearly highlight the thrust of the issues across the strands. In most cases the responses have clear themes and are consistent in their conclusions. Some paragraphs may appear to be marginally out of context or ’floating’, but this is as a result of splitting the individual responses by subject. In most cases, however, the message conveyed by the original author authority is still very clear.

Index to strands:

1. General Introduction 2. Three Block System: General 3. Three Block system: Baselines 4. High Needs Block: Hospital Schools Baseline Top Slice 5. Schools Block changes to local formula for 2013-14: Budget swings 6. Schools Block changes to local formula for 2013-14: Lump sums 7. Schools Block changes to local formula for 2013-14: Minimum Funding Guarantee (MFG) 8. Schools Block changes to local formula for 2013-14: Primary/Secondary ratio 9. Schools Block changes to local formula for 2013-14: Element 2 - Additional Support Funding (£6k contribution) 10. Schools Block changes to local formula for 2013-14: Other points 11. Schools Block changes to local formula for 2013-14: Summary 12. Federation 13. LACSEG

1. General Introduction

Cambridgeshire County Council is fully aware of the national economic circumstances and the limitations on funding, however it believe that the current funding changes have been rushed, do not consider the implementation challenges that they present and play insufficient regard to the needs of schools and pupils. As a consequence the changes are creating unnecessary turbulence and instability when funding is already stretched.

It believes the government is failing to recognise that it is not just one issue, but the sum of all the changes, which have not been considered collectively and together will have an adverse impact on schools. It will be the low levels of base funding, set against inflexible formula factors,

F40 Funding Impacts Paper – December 2012 1 compounded in some cases by falling rolls, post-16 reductions and shifts in special educational needs funding which will place schools in very vulnerable positions and see them unable to cater for the needs of the children within them.

East Riding of Yorkshire Council supports the government’s ambition to provide fair funding for all children but it is disappointed about deferment of action until after the election in 2015. The proposals for transparency and simplification are welcomed, however the combination of East Riding children being unfairly funded and the introduction of the funding reforms exacerbate the unfairness that the government has already acknowledged.

Nottinghamshire County Council reports that task of deciding a new funding formula has been unusually difficult. While the drive to greater simplicity and approve the principle of a greater proportion of the available funding following the child is welcomed, the prescriptions put in place under the new regulations have proved to be unhelpfully rigid.

Shropshire County Council and its school communities fully support the government’s ambition to ensure fair funding for all children and, as one of the lowest funded 40 local authority areas, was hopeful that this would have a positive impact on the funding available for Shropshire schools. The Council is disappointed that this will not be the case until at least 2015.

The current funding formula reforms impact particularly on rural areas with small schools. This gives us considerable cause for concern. Whilst seeking to make the funding formula simpler and more transparent, its rigidity will cause significant turbulence to individual schools budgets, albeit partially protected by the MFG.

Somerset County Council says the national changes to school funding have very significant implications for Somerset schools and academies. A provisional formula has been prepared that seeks to minimise turbulence. Ways are being examined to mitigate the worst implications and ensure the changes in funding do not damage the education of the children and young people of Somerset.

Somerset’s Schools Forum has overseen the development of a sophisticated activity led funding formula that sought to allocate funding to schools according to need, within the context of the low level of funding per pupil through the Dedicated Schools Grant. The simplified formula required for 2013-14, within the same overall amount of funding, results in a significant number of schools receiving more funding that the activity analysis suggests is essential, and many schools seeing a cut in funding. The proposals for 2013-14 cap gaining schools at 1.5% per pupil, and the MFG protects losing schools to a similar degree.

Swindon Borough Council welcomes the proposal to introduce a simple, transparent, national formula - but the detail supporting this appears illogical and the impact on some LAs will be grossly unfair. The new system may seek to put an end to national variations in funding for academies but the prime reason for this is that there are very significant variations is the grant distribution systems used by Government to allocate funding to LAs. If LAs are currently funded on a different basis to reflect different levels of needs, it seems illogical that the academies should not be. Tackling the inequities in the national Formula Grant and DSG should be addressed as a greater priority as this would automatically correct any academy funding anomalies.

F40 Funding Impacts Paper – December 2012 2

Worcestershire County Council has welcomed the commitment to review the current school funding system and firmly believes that there should be a more transparent and fair system which is simple to apply.

2. Three Block System: General

Leicestershire County Council: The movement to a three block settlement introduces additional complication for LA planning. The base data and drivers for the three blocks i.e. school, high needs and early learning are all different and based upon different time points. There is still no certainty that local authorities will receive the full DSG settlement at the same time.

3. Three Block system: Baselines

Leicestershire County Council: Funding for the expansion of nursery education for two years olds is transferred to DSG, there is no guarantee that this will be adequately funded and will be need to be delivered at a detriment to existing services

Leicestershire County Council: 2013-14 will see the transfer of funding for 16-19 year olds with learning disabilities into DSG. The EFA is clearly saying that it cannot fund the level of growth in places which will be a significant budget issue for local authorities. There still remains uncertainty about the number of places to be funded and the funding to be transferred.

Warwickshire County Council: This greater demand on the high needs block (see schools block changes to local formula for 2013-14: element 2 - additional support funding) is further reflected in High Needs funding for post-16 students. Previously, had the authority required further funding in the Specialist Placement Budget, the EFA had provided extra support from other underspends. This pressure is now likely to fall to the local authority DSG allocation in the future. There is also some uncertainty regarding the funding levels to be transferred to the High Needs Block for post 16 at this stage – the process of guaranteeing place funding to providers offers a reduced level of flexibility from within the High Needs Block.

In addition to this, the widening of the remit of management of the High Needs block, including all negotiations of top-up for 0-25 year olds means there will be additional administration costs in delivering this service. Given that flexibility of managing funds from the High Needs block will be reduced, as much of the funding will passport directly to providers, and likely increases in complexity and cost of support for these children, there are likely to be significant financial liabilities that the local authority will be subject to. Clearly there is currently no additional resource to support this.

4. High Needs Block: Hospital Schools Baseline Top Slice

Devon County Council is also concerned about changes to the arrangements for funding hospital education. The Education Funding Agency (EFA) has decided to end the system of local authorities recouping the costs of hospital education for children from another authority area. In future hospital education will funded from one national pot by the EFA. Unfortunately the EFA says it could not get the data for historic funding costs to balance, so it has assumed that over time the demand for hospital services will “be roughly even across the country.” Furthermore, the EFA says many large authorities made no declaration, so it has made a further assumption about the pro-rata cost for every child in the country and proposes to top-slice that amount from every local authority area.

As a result Devon schools are taking a further hit because the EFA plans to top slice the pupil funding by £8.50 a head across all pupils (Devon has 86,000) to fund hospital education. This means the EFA

F40 Funding Impacts Paper – December 2012 3 will take £718,584 from Devon’s schools in 2013-14, whereas Devon’s actual spending on education in hospital is only £250,100 a year. So the net loss to Devon schools is £468,484 from a low-funded county. This sum is equivalent to the loss of 15 teachers (average salary £30,000).

This is particularly unfair as Devon provided the EFA with accurate data about its spending, but it seems to be being penalised because other councils did not, and the EFA is left guessing what the total spend should be. This needs to be urgently resolved. The top slicing in Devon must match the actual spending on hospital education, not an inflated figure that may benefit national funding, but penalises spending on Devon’s schools.

Dorset County Council: The hospital topslice has been undertaken in an arbitrary and unmeasured way. Whilst it is recognised that the major hospitals such as Great Ormond Street, the Royal Marsden or St James in Leeds are expensive and take children and young people nationally, there is still an element of distance in the equation. A few children from Dorset may go to such hospitals, but it really is a small handful because being so far from those major hospitals, the journey itself becomes life threatening. The majority of children will go to Dorset County Hospital or one of the surrounding general hospitals and the very sick children are transferred to Southampton or Bristol. However, children from the fringes of London could be transferred to London much easier and will tend to use the specialist centres more. We have an eight place unit in Dorchester and our recoupment figures for the last three years have not been higher than £130k. Yet the topslice has removed £200k more than we have ever spent from our DSG. This is £200k that will have to be found by the reduction of funding to schools (which in turn will increase the need for MFG). We could have supplied these figures if we had been asked, but this question was not asked and instead LAs were blamed for not providing details and guesses were made at the national total. This is not a reasonable way of managing budgets and is again unfair on the children of Dorset whose funding is being reduced even more.

5. Schools Block changes to local formula for 2013-14: Budget swings

Cambridgeshire CC: The current modelling undertaken by the authority indicates that it expects to see some primaries face a 7.8% drop, or -£84k in budget against their 12-13 budget. Some small secondary schools will face a loss of -15.3% or £501k. These figures are pre-MFG, but will be exacerbated in areas where pupil numbers are falling, such as in the north and east of the county.

Dorset County Council: In the absence of the ability to target funding, moves to a new formula were managed according to the principle of least turbulence for individual schools. This was an attempt to keep funding that has been targeted via our needs led model in the same schools, but it was also in an attempt to reduce the level of MFG paid. Even based on that principle, budgets range between +/-22% change with more than a quarter of schools having a swing of more than 5%.

East Riding of Yorkshire Council: The new formula comprises 12 factors, four of which make up 97.5% of East Ridings school budget. The arbitrary limit on choices within the factors creates wild turbulence with winners and losers. We lose the subtleties that our current formula provides; subtleties that allow all our schools to manage and to survive and even thrive.

DfE officials have stated that turbulence is inevitable and seek to undermine our case by stating the obvious, that current formula allocations are based on historical factors, with the qualifying assertion that these factors are no longer relevant. This simple analysis is disingenuous and one that we would wish to challenge at the highest level. It is too simplistic to justify the turbulence created as a necessary evil which, of our own making. The impact of the ‘new inflexibilities’ is to compromise the existence of several East Riding schools. Is this an intended consequence of the funding reform?

F40 Funding Impacts Paper – December 2012 4

Shropshire County Council: Shropshire’s modelling indicates that 46 out of 128 primary schools, and 12 out of 22 secondary schools, will be adversely affected with modelled reductions of up to £31,000 and £83,000 for primary and secondary schools respectively, whilst those gaining will see increases of up to £41,000 and £32,000 respectively. For small schools in particular this places significant strain on the level of teaching staff and can account for anything up to 25% of the staff compliment.

Whilst Shropshire’s Schools Forum has tried, the funding formula cannot be flexed sufficiently to provide what it believes is a fair allocation for every school. 59% of Shropshire schools will be protected by MFG which will account for some £2.2m or an average of £104 per pupil.

Warwickshire County Council: Of the 227 schools that these changes will affect, initial financial modelling indicates that up to 120 may see a reduction in funding from their 2012/13 position, even after the MFG. In particular, of the 25 primary schools in the county, 23 are seeing a reduction, which could impact on the future sustainability of some of these schools. Particularly those schools that do not have higher, or medium numbers of deprivation or FSM children, the future viability of these schools may need to be considered.

Worcestershire County Council: Changes to the number of permissible factors for school funding will have negative impacts on all schools in Worcestershire from April 2013. As a consequence of its own modelling, the Council has found that the formula cannot be flexed sufficiently to provide a ‘fair’ allocation to every school, for every child.

6. Schools Block changes to local formula for 2013-14: Lump sums

Cambridgeshire CC: There is concern about the serious impact of a fixed lump sum which remains the same across secondary and primary levels. This is nonsensical – Cambridgeshire has 40 place primary schools and 1,500 place secondary schools. To set the same lump sum for both is bizarre and will impact particularly on small secondary schools.

The greatest detrimental impact on schools in East Riding of Yorkshire is the lump sum, or rather the requirement that it should be one lump for every phase and size of school. We believe there should be local flexibility, within the stipulated range 0-£200,000, to allow different choices of lump within and between phases.

Devon CC: In an effort to help schools with running costs that their per-pupil funding alone will not cover, the DfE proposes that local authorities allocate each school a lump sum as a stop-gap measure for 2013-2014. The DfE will allow councils to allocate up to £200,000 a year for each school. But for Devon with 347 schools, a single large lump sum takes huge sums out of the pupil-led funding and becomes unaffordable for an authority such as ours. The DfE’s idea is more manageable for an authority with a narrower range of school sizes.

Devon is sixth from bottom of 150 councils for school funding, making every pupil in Devon worth £644 less than the national average. We cannot afford a big lump sum for each school, so our Schools Forum has agreed a lump sum of £50,000. Devon is caught between a rock and a hard place; if we agree a relatively low lump sum to ensure every child has more spent on their education just as the Government wants, it leaves a gaping hole in the funding safety net for small schools; but if we increase the lump sum to protect small schools, it increases the budget of some small primary schools hugely and without need, while taking money from secondaries in Devon and larger primaries. And far less money follows the pupil, which is one of the chief aims of the change. These funding reforms as presently configured do not work as they were intended to in low funded authorities with large numbers of schools, such as Devon.

F40 Funding Impacts Paper – December 2012 5

Dorset County Council: The government in all correspondence has pointed to the lump sum as the mechanism that is intended to protect small schools. It is intended to meet the unavoidable costs incurred by a school - that is a headteacher, a caretaker and some administrative support. This was estimated to be around £95k. This is an extremely simplistic view that does not work in practice. It is not just a headteacher that is required, but at least 0.5 teacher, in addition and possibly some TA time. The premises costs of running the school, rates, fuel, R & M are not directly linked to the number of pupils in the school. Additionally for LAs with a larger estate of small schools, the amount of funding used for the sum of the lump sums leaves a smaller amount for the AWPU, reducing its value. So in protecting small schools the DfE is actually making large schools unviable instead. A modelling exercise using a total budget of £76m for AWPU and lump sums, modelled with lump sums from 0 – £200k and either 50 or 100 schools shows that the larger 400 pupil schools would gain less than 25% of the lump sum and a 400 place school in a 50 school LA would have £170k more than the same school in a 100 school LA, assuming that total pupil numbers in both LAs are the same. It is not enough to say that the lump sum protects small schools, the same lump sum endangers large schools.

Nottinghamshire County Council: Key among these (rigid regulations) has been the requirement to give to all schools an identical lump sum, or none. This makes no sense for a Council with some primary schools of under fifty pupils and secondary schools of more than 1,500.

Shropshire County Council: The impact of introducing a fixed lump sum which is the same for primary and secondary schools does seem nonsensical when the size of schools can vary so significantly. For example, Shropshire’s smallest primary school has 30 pupils, compared with large secondary schools of 1,000 pupils. We wonder why the Secretary of State should seek to discriminate against one size of school and favour another. Fixed costs for schools of these differing sizes cannot be comparable. The impact on small rural schools could threaten their very existence.

Somerset County Council: In terms of formula funding and reviewing arrangements for 2014/15, Somerset’s modelling indicates that it would be helpful and beneficial to be able to allocate a higher lump sum for middle and secondary schools than for primary schools.

Somerset County Council: The Council sees a need for greater flexibility in the use of the lump sum, allowing for a different value across each phase or type of school.

Warwickshire County Council: As a result of introducing a common lump sum across primary and secondary levels, a similar issue of future viability is inherent in 5 of the 9 secondary schools in Warwickshire that have less than 600 pupils. Both these situations are after the schools were also subject to changes to funding in 2012/13, as a result of DfE encouragement to simplify local formulae for 2012/13 in the 2011 consultation papers.

Worcestershire County Council also thinks that there should be local flexibility in determining the size of the lump sum to schools to allow it to make different choices within and between phases.

7. Schools Block changes to local formula for 2013-14: Minimum Funding Guarantee (MFG)

Devon County Council: DfE officials say protection for small schools is now included in the base MFG per pupil and is protected at minus 1.5 per cent. But because, combined with the previous funding protection used in Devon, this effectively gives a disproportionately high per pupil rate; if a school loses two or three pupils the financial impact is severe. Conversely, if a school gains pupils, they receive a disproportionate amount of additional funding that only compounds the inequity in per pupil funding and produces perverse results.

In Devon, MFG produces perverse funding swings because the previous protection that worked at the school level is now applied “per pupil”. This produces a very high “per pupil” funding rate in

F40 Funding Impacts Paper – December 2012 6 small schools, where changes in pupil numbers, naturally tend to be greater in proportion to the overall total. These are two real examples:

One rural school whose numbers have reduced to 28 pupils will have its funding cut 31% while another school in the same part of Devon whose numbers have risen to 25 pupils will see its funding rise by 21% under the DfE proposals. The county council estimate the annual budget for next year of the school with 25 pupils to be £241,000 – more than 60% higher than the school with 28 pupils, which will struggle with a budget of £149,000. Another school with 21 pupils will receive £8,000 more funding in total than one with 88 pupils nine miles away.

Devon County Council has asked DfE officials for an exemption from the proposed national MFG so that it can continue to guarantee rural primary schools funding for a minimum 53 pupils. This request, which is supported by Devon schools’ Schools Finance Group, would not require more money from the government. It would particularly provide small rural primary schools with greater financial stability during the natural changes in pupil population numbers. The DfE’s one-size-fits-all MFG does not provide this rural-proofed protection so 42 Devon primaries are at risk.

DfE guidance on the reformed funding system for local authorities did not include historic local protection arrangements as an allowable exemption. But it is only now clear from analysis of the October 2012 pupil numbers that the DfE’s proposed MFG will create large funding fluctuations in Devon small schools, fluctuations that Devon’s local funding protection scheme would avoid. The government is urged to approve Devon’s request for a local exemption so that a less volatile and more affordable local funding protection scheme can operate.

Leicestershire County Council: Many schools remain financially stable only as a result of protection through the MFG. Whilst it is encouraging that the DfE has stated that this will continue into 2015/16 there is no guarantee past this point and to what level of protection offered. Schools will become financially unviable as the guarantee is reduced or removed. In a rural county the cost of home to school transport can exceed the cost of financially supporting a school to remain open.

North Yorkshire County Council: On formula changes at school level we have lobbied extensively with the DfE and a large number of schools have written directly to MPs and ministers. Without the MFG, some schools would lose up to 20% of funding (£600k). The Schools Forum has supported the line that the DfE proposals are unacceptable and lack any rationale. Even with the MFG (and even more so with the proposals to rebase the 2012-13 MFG on October 2011 numbers) schools will lose out while the government’s promised review takes place. Therefore, a school could lose up to 1.5% of funding per pupil each year from the application of a formula which is probably wrong, and for which a review has been promised before it has even been implemented. Our preferred solution was to use a MFG of 0% as this would have prevented schools losing money from a formula which, in their eyes, has already been discredited by the DfE’s own acknowledgement that it is not sound and needs review. This request was rejected.

8. Schools Block changes to local formula for 2013-14: Primary/Secondary ratio

If Herefordshire is asked/required to achieve the 1:1.27 funding ratio as part of a national schools funding formula (and it is difficult to see how there can be national formula without such a standard primary/secondary funding ratio) then this will have a serious impact on our rural primary schools. Because of the number of smaller rural primary schools in Herefordshire, its primary secondary ratio is currently at 1:1.17 – which is very low in national terms. The authority estimates that to achieve the 1:1.27 ratio will require a transfer of £2m from primary to secondary school budgets which is equivalent to a reduction of £25,000 from each primary school. This will significantly reduce the financial viability of many of its small rural primary schools.

F40 Funding Impacts Paper – December 2012 7

9. Schools Block changes to local formula for 2013-14: Element 2 - Additional Support Funding (£6k contribution to high incidence SEN)

Herefordshire: The long term impact of the SEN funding changes is particularly difficult to assess. The requirement that all schools must now provide the first £6,000 of additional SEN provision will undoubtedly impact adversely on small primary schools. Herefordshire has previously recognised this by fully funding the SEN costs for high needs pupils for all but the very largest primary schools. The Council has an outstanding school with high quality SEN provision in 2013/14 which must fund £24,000/£30,000 of additional SEN costs as well as losing a similar amount in the new formula. To mitigate against the extra costs we have introduced an “MFG-style” protection mechanism so that the extra SEN costs in small schools are phased in. However, in the long run there will be a significant impact on those small schools that have provided high quality SEN provision e.g. where a small school has a disproportionate number of high needs pupils e.g. from the same family. During our consultation with schools some head teachers of small schools suggested that pupils with SEN needs will be harder to place as heads will be unable to fund the £6,000 school contribution.

Leicestershire County Council: The changes in the area of High Need Pupils are the most concerning especially given that Leicestershire had broken the link between the identification of need and funding levels. This authority previously had a highly delegated system for funding pupils with SEN in mainstream schools. The new reform where the LA pays top up funding is requiring the introduction of bureaucratic process not previously required. The withdrawal of delegated funding for schools seems at odds with the objectives of school funding reform. The new system moves Leicestershire back into a position where schools have a financial incentive not to utilise early intervention strategies as the higher needs a pupil has, the greater the funding received. As a result it is expected that the number of requests for statutory assessment, and possibly SEND tribunals, will increase and subsequently increase costs at local authority level. Schools view these changes as unnecessary and have concerns for strategic planning especially with regard to staffing models and financial planning given the new model of top-up funding which attributes financial values to individual pupils and the subsequent immediate removal of funding should pupils move school, including planned transition between school phases and the inability to shed staff at appropriate times to match the reduction in resources.

Shropshire CC challenges the view that the current formula provides a fairer funding allocation based on pupils. Not allowing the notional SEN budget to be based on actual pupils with statements, but rather to be restricted to the numbers of pupils on free school meals, low prior attainment and IDACI factors means the funding is not necessarily going to the schools with the SEN pupils.

Funding is not following those pupils with SEN. The proposed changes will result in some schools seeing both a cash reduction and an increase in commitment to fund high needs pupils who have previously been funded in full by the local authority. We are of course anxious that this does not result in all pupils with any form of disadvantage being perversely directed to specific schools.

Warwickshire County Council: There is also concern regarding the changes to the way that additional needs funding can be allocated to schools. The choice of the prior attainment indicator has been criticised by primary head teachers in that a pupil with a level 73 in the Early Years Foundation Stage Score will not necessarily need additional support all through the primary sector. They believe that a level of around 50 points would be more indicative. The result of the use of the 73 cut off point is that some schools may be over funded for additional needs. In fact, around 30% of schools under the proposed options will see a reduction in the schools current notional SEN budget of at least10% whilst 47% will see an increase in excess of 10%.

Whilst the authority appreciates that additional needs does not need to be allocated using the prior attainment data, the only alternative is to use FSM and/or IDACI. Locally there is evidence that

F40 Funding Impacts Paper – December 2012 8 additional needs is not linked to deprivation and that using this single indicator may not be reflective of schools funding needs.

The introduction of a set cash £6,000 contribution for high needs pupils in schools is unfair in light of the varying funding that LAs receive. Warwickshire receives only £4,663 per pupil in DSG whereas the average is £5,082. In effect, some local authorities will be in a better financial position to fund this set cash value than others. The LA will still retain a statutory responsibility for these vulnerable pupils during a period where the DSG is ‘cash flat’. The impact of these SEN funding changes is that there is an increased risk to the affordability and flexibility of the High Needs Block; allocating funding to schools in a manner that might not reflect their needs and needing to be able to notionally offer £6,000 per high needs pupil may well result in a greater demand on the High Needs Block than previously experienced.

10. Schools Block changes to local formula for 2013-14: Other points

Nottinghamshire County Council: A further challenge has been the removal of the option to allow a factor for size of premises. This County Council has set aside some £2m of its own resources to ensure that no school loses funding, other than through loss of pupil numbers, in the financial year 2013-14.

Somerset County Council: There are concerns that the available measures of deprivation do not accurately identify additional need in rural areas. Additional local flexibility to reflect exceptional circumstances, particularly relating to geography as well as premises, would be useful.

11. Schools Block changes to local formula for 2013-14: Summary

Cambridgeshire CC: The promise of a review of the current reforms is fine, but by the spring of 2013 many schools will have had to make difficult and damaging adjustments to budgets which will be hard to reverse. And the assurance that MFG will be retained at some level, whilst welcome, will not protect schools with significant falling rolls, nor will it provide protection for the movement of high needs pupils, changes in statement funding or changes in commitment as a result of simplification of funding factors, in particular for items which were once within the formula but will now need to be charged.

Dorset County Council: Without changes to the funding levels received by LAs, the changes taking place at present in the school funding system become difficult to implement. Schools in each LA are collectively receiving the same funding as they did last year, but individually are receiving very different amounts for no reason other than “simplification”. This may be one step along a route of change, but without additional funding it is difficult to apply. Many LAs have in collaboration with their schools put a lot of effort over the years in to ‘needs-led’ or ‘activity-led’ funding models to target funding to schools to ensure that schools are funded to meet the needs of the pupils within them. These models have been tossed aside to create a funding system built purely on the method for distributing money, not a system that take accounts of the differing needs of schools in educating children. Further the changes are based upon the current funding levels and if as a result of changes to the national formula proposed in the next CSR period there is either significantly more or less funding available for Dorset schools the decisions that have been made now, might be viewed differently.

In the absence of the ability to target funding, moves to a new formula were managed according to the principle of least turbulence for individual schools. This was an attempt to keep funding that has been targeted via our needs led model in the same schools, but it was also in an attempt to reduce the level of MFG paid. Even based on that principle, budgets range between +/-22% change with more than a quarter of schools having a swing of funding of more than 5%.

F40 Funding Impacts Paper – December 2012 9

Dorset County Council: The assumption that premises costs can be distilled to pounds per pupil is wrong. If all schools were in the same condition and had similar facilities this might be possible, but schools are not the same and with the cancellation of the Building Schools for the Future programme, (which tended to affect f40 authorities most), the condition of school buildings is another factor in the inequity of funding. Schools in the lowest funded LAs are spending more on propping up tired buildings which in turn affects the quality and equality of education.

Dorset County Council: The changes to high needs funding along side the changes to mainstream formulae have been challenging in timescale and made the changes to both feel rushed and the consequences not fully understood. It might have been better to manage the changes over two years, with perhaps shadow budgets for schools in the first year. This would have given the opportunity to look at the issues that arose and change them before actual changes were made. This in turn would ensure that there is not turbulence in the first year followed by more turbulence resulting from changes made in the review – with all the resultant MFG protections that would occur. It would also enable a full review of the way that the changes have been implemented nationally. It would appear that at present we still have an extremely diverse set of new local authority formulae and that simplification has not led to the expected outcome of similar formulae.

Herefordshire: As a low funded but high delegating authority Herefordshire is concerned that as part of the “formula harmonisation” process schools will be “averaged down” to other authorities funding levels. Comparisons with neighbouring authorities suggest that if this happens then Herefordshire schools will lose up to £60,000. Our lump sum is £105,000 but neighbouring authorities have a much reduced lump sum e.g. £40,000 or £60,000.

Herefordshire: Achieving the 1:1.27 ratio will require us to close/federate small schools but the lump sum is a disincentive to federate schools- there are unintended consequences of different parts of the national school formula which is working against itself.

Leicestershire County Council: Schools feel that that pace of school funding change is too fast resulting in extreme difficulties in engaging schools in meaningful formulation of proposals. For example, the final DfE proposals were issued on June 28 and required that formula proposals were submitted to the EFA by October 31. The school summer break was in this period resulting in limited modelling and consultation. The Leicestershire Schools Forum has been and remains concerned that the speed of change has not allowed fundamental review of wider options and really only allowed for a transition of the old formula to the new. Headteachers and Governors in Leicestershire comment that the proposals simply do not deliver a simple and transparent formula easily understood by schools. They view it as complicated and built upon data they are unable to see.

Leicestershire County Council: The changes in relation to high needs pupils are unable to be moderated by the MFG as a result of withdrawal of previously allocated universal funding into a targeted funding model which is creating significant and unnecessary turbulence in school level funding. Leicestershire has used the new formula to protect small schools through the allocation of a lump sum of £150,000, there will be significant issues should a national formula restrict the lump sum and / or insist on a specific percentage of pupil led funding. The DfE continues to press LAs to provide funding targeted deprivation funding to schools despite the growth in the Pupil Premium also targeted at deprivation proxy indicators. There are many other issues that affect a child’s ability to learn, there is a danger that local authorities with low deprivation and / or relatively small pockets of geographical deprivation are not funded at a level sufficient to allow an effective education system to be provided, the continued extension of this current policy will have the same impact at individual school level.

F40 Funding Impacts Paper – December 2012 10

Leicestershire County Council: The introduction of the responsibility to validate local authority school funding formula to the EFA is not welcomed. Local authorities have successfully delivered formulae with reference to regulations. The introduction of this and other school funding responsibilities to the EFA introduces an unnecessary bureaucracy and removes funding from the delivery of front line education services

North Yorkshire County Council: We are pleased that there will be a review and hope that it will be real, meaningful and, this time around, based on proper evidence and rationale.

Nottinghamshire County Council: The County Council requests that the these regulations be reviewed and rewritten so that greater flexibility may be allowed to match more closely the distribution of funds to local needs. This greater flexibility is particularly necessary for those authorities, like Nottinghamshire, which have already been disadvantaged by the decision taken to defer the establishment of a national funding formula until at least 2015. This decision perpetuates the unfairly low level of overall funding received by this Council for its schools and academies in comparison with others nationally.

Somerset County Council: The DfE has confirmed that a review of the arrangements for 2013/14 will be undertaken to inform decisions for 2014/15 and this includes the formula factors and the impact in rural areas. Somerset is worried about the difficulties of applying a simplified formula to a diverse pattern of school provision, with schools varying in size from 21 pupils to nearly 1,300. There are particular challenges posed by a school system that includes first, infant, junior, primary, middle, secondary, upper and all through schools.

The way in which LAs are able to deal with the conflict between historical funding distribution and a simplified local school level formula, continues to be a concern.

Warwickshire County Council: There is an inequitable level of protection being offered by the DfE in relation to these reforms. Whilst there is a protection to schools in the form of the minus 1.5% MFG, academy schools LACSEG is protected at 10% and post-16 SEN providers are to be protected in terms of place funding, there is no protection for the overall LA DSG. This is at a time where Warwickshire, like all other councils, are required to make significant savings. For example, the main schools funding options being considered in Warwickshire could increase the MFG from approximately £2m to £6m. Whilst this can be offset by capping, it highlights the financial impact of the changes on a school by school basis.

The overall impact of the reforms is that the risks are being transferred to the LA without the corresponding financial protection.

In terms of a policy steer, there is a risk that the Local Authority may be introducing changes to schools funding that have limited sustainability. Whilst the introduction of the prescriptive headings encourages each local authority to fund schools in a specific manner, the fact that the expected relationship between the basic per pupil entitlement and the additional needs funding has not been defined by the DfE nationally and could result in each LA still funding schools in quite different ways. This will not be evident until a national funding formula is introduced but a comparison of neighbouring LA proposed rates shows some marked differences. This in turn will mean further turbulence for the schools in those LA who have not chosen in 2013/14 to adopt unit values that are then included in a national funding formula.

Similarly, the introduction of SEN funding reforms which rely on operational frameworks of practice, in advance of the SEN White Paper, may result in U-turns needing to be undertaken. This is de- stabilising for schools at a time when so much of their agenda is changing.

F40 Funding Impacts Paper – December 2012 11

Worcestershire County Council: The Council believes the government should provide a lump sum payment in each of the two years 2013/14 and 2014/15 to the 40 lowest-funded local authorities as previously requested by the f40 Group to mitigate the impact of the changes.

12. Federation:

Herefordshire Council: The continuation of the lump sum payments for schools in a federation will deter local authorities from taking sensible steps in managing falling rolls e.g. encouraging small school federations/combinations in future. There is no incentive in encouraging small schools to federate if there are no financial savings to the DSG.

13. LACSEG

Cambridgeshire CC: The authority is very concerned about the application of a national rate per pupil to determine levels of funding removed from the LA. In low funded authorities with high numbers of academies such as Cambridgeshire, this will hit local authority budgets – already under unprecedented pressure – incredibly hard.

In 2012-2013 Cambridgeshire is reporting £4.895m of expenditure on “Local Authority LACSEG relevant services”, providing education services for the 74,543 pupils. This equates to £66 per pupil, and is the per-pupil amount that should transfer to academies in 2013/14.

The DfE is proposing that LAs will lose approximately £160 per academy pupil. The Council estimates it will have 37,700 pupils in academies by the end of 2013/14 and this will remove £6m of funding from the authority. Hence the DfE is proposing to remove more than the total LA spend on an all schools (maintained and academy) – which will leave nothing to support maintained schools and will also require further cuts to other LA services.

Central Bedfordshire is a low funded authority which has supported schools through their choice in academy status. The Council’s estimates that it will have 19,622 pupils in academies by the end of 2013/14, using the average rate, will result on an increase of deduction from £595k to £3.1m for 2013/14 and for £3m for 2014/15.

Although our unit rate is not far away from the national average rate, taking into account the high numbers of academies in Central Bedfordshire, the increase on top slice will affect the authority’s budgets, which are already under pressure. The increase on the proposed top slice will affect not only education and schools but also vulnerable children and wider council services. This will lead to reduction on the capacity to support the remaining maintained schools which will raises the issue of equality of access to services compared to academies. Services will have to be redesigned with significant cuts being made to respond to the funding position and future reductions as more schools convert to academies.

Central Bedfordshire has responded to the DfE on the amount £8-£15 proposed for continuing responsibilities for pupil in academy. The amount proposed was based on the survey using averages and ranking methodologies which do not reflect the cost of services retained by local authority.

Also we responded to DfE in relation to ACA bandings. The costs of central education services can be affected by the salary levels in different areas. However, the analysis of s251 budget data showed no link to the general labour market costs for the area. There are 28 different ACA bandings and this would result in around 14 different per pupil rates for academies and LAs, depending where they are in the country. The main drivers for the move to a national system are simplicity, transparency and fairness. How would 14 different per pupil rates be simple and transparent. There is no link to the GLM costs, so to apply an uplift would be seen as unfair.

F40 Funding Impacts Paper – December 2012 12

Cheshire West and Chester Council: Under the proposed replacement of LACSEG, the funding risk to Cheshire West and Chester Council is £7.6m, which includes £1m already top-sliced for existing academies.

Cheshire West and Chester Council revised its Section 251 statement for 2012/13 and assessed the cost of LACSEG activities at £2.6m – this is the equivalent of £57 per pupil as opposed to the national average of c£170 per pupil derived from 2011/12 S251. There will therefore be a funding cut for the authority of £5m, which will not relate to the responsibilities transferred to academies and will have to be met from other services, including services for the remaining maintained schools and non- education services. This point was included in our consultation response to the DfE.

Cheshire West and Chester Council has also fed back to the DfE on the amount proposed for continuing responsibilities for academy pupils. It assessed its fixed costs to be equivalent to £25 per pupil, significantly higher than the DfE’s proposed range of £8-£15 which they had determined from a select sample of authorities.

The Council is currently planning its financial scenario by estimating that 60% of the 45,000 pupils in the Borough will be in academies by 2016/17. The worst case is for all schools to transfer by this time although the authority is not currently experiencing a significant number of school transfers, especially for primary schools.

The Council is developing a strategy to passport the funding reductions to the appropriate functions as per the 2012-13 S251, recognising an element of fixed costs exist. The fact that the cost of many services cannot be reduced on a per pupil basis will potentially leave budget shortfalls for certain activities until stepped changes can be realised.

The remainder of the Council’s LACSEG top-slice (i.e. the £5m based on the 2011-12 S251 statement) is currently being treated within the overall financial scenario for the authority i.e. it is not being directly allocated to those services which it is attributed to in the 2011-12 S251 statement.

Gloucestershire County Council: In Gloucestershire the estimated loss in funding from using a national average for LACSEG is in the region of £12m to £14m if all schools became academies. Within the 2012/13 s251 budgeted expenditure, which relates to central education functions, the authority has just over £5m, meaning there is a potential £7m to £9m of savings which will need to be made against non-education related expenditure. The estimated loss in funding, which will transfer to academies in 2013/14, is over £6m – that’s more than the authority currently spends in total.

In terms of statutory responsibilities the proposals for a grant to cover these duties it is likely to range between £650k and £1,250k, although council estimates indicate it would require at least £1,500k to maintain these services. The use of a national average rate penalises those authorities which are low funded and especially those who have supported the academy programme.

The impact of the LACSEG proposals will affect not only education and schools but also vulnerable children and wider council services. The capacity to support the remaining maintained schools will reduce and this raises the issue of equality of access to services compared to academies. Services are being redesigned with significant cuts being made to respond to the funding position and future reductions as more schools convert to academies. In the short term, savings cannot be released and this puts further pressure on budget planning within the authority. The combination of LACSEG, Early Intervention and DSG funding uncertainties within what is already a very challenging financial climate will impact on the services that can be provided to the most vulnerable children and adults.

Kent County Council: Kent CC has expressed serious concerns about the proposed changes to LACSEG funding and their likely impact on Kent’s ability to discharge our statutory responsibilities for

F40 Funding Impacts Paper – December 2012 13 schools. Based on the information currently available, the Council could have a shortfall of between £7 and £11 million as a result of the proposed new arrangements.

The authority accepts the principle that as more schools achieve academy status its budget should be proportionately reduced. However, there is great concern about the methodology for the transfer of funding from DCLG to the DfE, its subsequent distribution and the consequences it may have on central education functions. It appears that £35.3m is to be deducted from Kent’s formula grant (Kent’s share of the £1.2bn spend drawn from all s.251 statements) and the authority estimates that after the academy adjustment it will get back around £20 - £24 million. Even allowing for the ‘return’ of the current academy top-slice, this would leave Kent with a shortfall of between £7 and £11 million.

Kent CC believes there is a fundamental problem with the methodology. In using the s251 return, which records all the expenditure funded by formula grant and Council Tax, it appears wrong to apply national rates based on that to deduct funding from the formula grant which does not include spending supported by Council Tax. A potential deduction of some £35 million is almost three times Kent’s s251 figure for 2012/13 and virtually nine times the figure estimated as being contained within the existing formula grant for central education services. The proposed DfE methodology seemingly takes no account of any of this, or the current distribution of formula grant. It penalises efficient low spending authorities such as Kent.

A shortfall of between £7 and £11 million would eliminate the total base budget spend on all school Improvement and Pupil Support Services, Education Welfare, Music and Property Management and a whole range of supporting functions delivering statutory and regulatory duties supporting 500 maintained schools in Kent. Our planned budget savings for next year would not deliver £11 million of savings.

On the basis that £11 million is not available the LA would have to cast the net wider in education and make savings from other base budget funded statutory services that support both our 500 maintained schools and the 100 Kent academies which, under the DfE model, should not be affected by these changes. This would include making significant reductions in Psychology Services, SEN Assessment Services and the work we do to support the raising of the participation age and prepare young people for employment. For example, £11 million reduction in home to school transport would remove 33% of the entire budget for mainstream and SEN transport and render it completely impossible for us to meet our statutory responsibilities.

Kent CC urges the Government to look into this issue with some urgency.

Leicestershire County Council: The intended LACSEG reforms consider the distribution of funding from the LA to schools and do not address the fundamental distributional issues for DSG to LAs. One issue cannot be addressed without the other. The outcome of not addressing LA funding levels is that the DfE is pushing LAs to a ‘consistent’ level of national school funding which will not achieve that outcome given school funding has a direct relationship with funding at local authority level. Without addressing the underlying issues of the differences in LA funding a national formula based on the same unit values will not be achieved.

Leicestershire is a low funded authority which has supported schools through their choice in academy status. However, the impact of the changes in LACSEG result in a loss of funding estimated to total £14m over the next four years. This reduction is based upon the withdrawal of funding at a national average which for a low funded authority is totally inequitable. In addition the national average spend is taken from expenditure data from 2011/12, many of the savings estimated by the DfE to be deliverable by LAs have already been delivered or are already factored into savings

F40 Funding Impacts Paper – December 2012 14 requirements. This reduction will result in additional savings across council services and a real reduction in front line services.

The changes in EIG also pose significant financial challenges. First, the grant is being reduced and, secondly, it is now expected by the DfE that authorities fund the national roll out of early education to two year olds within a cash flat settlement. The impact of this is that at the time the government is pressing forward plans for early intervention serviced to reduce the call on the public purse, local authorities will be given little option other than to reduce local early intervention services.

North Yorkshire County Council: As an authority with a low number of academies, North Yorkshire is expected to be at least in a better position than the original top-slice. Its top-slice was £3.8m this year and it is expecting a refund of around £2m (on top of the refund it received for 2011-12). However, the issue for the county council is the same as other LAs have pointed out: use of a national rate to deduct funding at source without any recognition of what the authority actually has/spends.

The national rate is more than twice North Yorkshire’s real rate, which effectively means that if 44% of the County’s pupils were in academies (current figure is 11% in 2.5% of schools) it would lose all of the budget for services such as school improvement, education welfare, etc. and have nothing left for those schools which remained - i.e. on average 200 schools but nothing left in the bank.

If all North Yorkshire schools converted, the authority would lose £12.5m, compared with the £5.4m it currently spends on these activities.

Nottinghamshire County Council: The current proposal to use a national average to determine LACSEG will impact badly on this county council. Based on the latest Society of County Treasurers modelling, the authority is estimating LACSEG top slicing as follows:

2013/14 -£8.2m

2014/15 -£8.9m

To put this into context, the authority currently budgets £6m on SEN transport and a further £6m on mainstream home to school transport. This is on top of Council spending reductions of 2013/14 - £13.5m (already identified) and 2014/15 - £43.4m (of which savings schemes of £12.8m currently exist, the remaining £30.6m has yet to be identified).

The latest Medium Term Plan proposals see a considerable reduction in the Council’s contingency budget (£17.8m to £7.8m) and making use of £9.4m of one-off reserves to help balance the 2013/14 budget. However, in the years beyond a deficit totalling £106.3m has been reported and will need to be addressed. The authority has already reduced its total staffing from approximately 12,300 in 2009/10 to approximately 9,900 in 2012.

Somerset County Council: A key issue for the authority is the various ways in which the total sum is overstated by using out of date budget information and inclusion of budget for functions that quite simply do not transfer to academies i.e. Foundation Stage assessment moderation, therapy costs, intervention in failing schools, etc.

Somerset has established a firm commitment to working together (schools, academies, early years providers and the LA) in the interests of the children and young people of the county and whilst academies are upset with the gradual reduction in LACSEG, they all knew when they considered conversion that the financial bonus was likely to be time-limited.

F40 Funding Impacts Paper – December 2012 15

Stockport Metropolitan Borough Council: By using national rates, the indicative formula top-slice is £6.153m (as quoted by CLG) and this compares to £4.888m per the authority’s 2011/12 S251 budget information. The impact of using national rates is therefore £1.265m.

Stockport has 10.46% of pupils currently in academies and as a result, will lose approximately £0.132m more funding than it should do for core education functions. This excludes any rebate for functions that cannot transfer to academies as the council doesn’t know the outcome of the consultation.

At this time, Stockport is supporting services that lose LA LACSEG funding to academies with top-up funding. These services are unlikely to secure buy-back income and cannot be re-scaled in the short term. Clearly this isn’t a sustainable position and will need to be reviewed as academy convertor numbers grow.

Stockport supports representations that aim to recognise individual authority circumstances in this calculation, an appropriate lead time for funding reductions and ensuring deductions fully take account of local authorities’ on-going statutory roles that cannot transfer to academies.

Swindon Borough Council: The proposed funding for academies will no longer be based on how much each LA spends but will be based on assumed national average spending on a specific range of services. As a lower quartile funded LA, Swindon’s spending on education services is considerably lower than the national average. Due to historic low funding SBC has been unable to provide any core funding for some of the services within the scope of the new grant (visual and performing arts and pupil support) and where services are provided the level of spend is well below the national average. However, the DfE appears to believe that Swindon academies should receive higher national average funding than the Council has ever received to fund the same services.

Based on the 2011/12 s251 budget statements Swindon’s spend on the range of services within the scope of LACSEG totalled £3.051m, which equates to £102.21 per pupil compared to the national average of £151.50 per pupil. In terms of overall cash this means that based on our pupil numbers (29,852) the Council’s spending was actually £1.5m less than it would if we were able to afford spend at the national average. Under the proposed new grant arrangements the Council will be required to transfer a proportion of funding to its academies for spending which is not actually being incurred. Therefore the authority will have to cut spend in other non-education services just to pass over funding to academies for a level of service that the LA has never been able to provide in the past and will never be able to provide to its maintained schools in the future. It will actually create a new source of additional funding for Academies.

In 2012/13 budget cuts across Children Services amounted to £2.3m (7.3% of the overall departmental budget). Planned spend on services within the scope of LACSEG has reduced from £3.051m in 2011/12 (£102.21 per pupil) to £2.082m in 2012/13 (£69.75 per pupil). This reduction in spending is in line with the Children Services department making savings equal to the value of the Academy top slice taken from the 2012/13 formula grant settlement (£1m) plus a share of savings arising from the general reduction in the authority’s formula grant settlement.

For LAs such as Swindon, the use of out of date s 251 figures recommended by the DfE is grossly unfair as the 2011-12 figures are not a reflection of current spending. The gap between Swindon spending per pupil of £69.75 is now even further below the national average of £151.50 as we have already significantly reduced spending on central education services. By basing the new grant on 2011/12 figures this effectively expects us to make the same savings again, thereby penalising LAs who have supported early academy conversions. The authority is now presuming that, over and above the £1m top slice made to its 2012/13 Formula Grant, a further grant cut of approximately £1.8m will arise in 2013/14 just to provide funds for existing academies. There is no scope within

F40 Funding Impacts Paper – December 2012 16 remaining education budgets to make this level of saving and it is inevitable therefore that cuts will need to be made across all areas of the budget, including services to the vulnerable. Whilst individual s251 budget statements are considered unsuitable for the purposes of calculating annual funding for academies, collectively the DfE thinks they can be. This appears to be both illogical and a profound contradiction.

There is a fundamental flaw in the methodology which assumes that spend on central education services is variable and that LAs can reduce spend every time a school converts to academy status. The value of its variable spend is estimated at only 12% of the £2.082m in our s251 submission. Swindon has provided details as part of its LACSEG consultation response.

Given the significant detrimental impact of the grant arrangements the Council urges a fundamental rethink.

Worcestershire County Council: The LACSEG reduction, in addition to the impact of the EIG transfer to DSG, has significant implications for funding within Children's Services and the county as a whole. The total impact of these two adjustments is c£8.8m which equates to a 12.5% reduction in the children's services net budget (6.7% of the gross budget). A cut of £8.8m would equate to half of the county council’s total mainstream learning and achievement which includes the budget for the school improvement, SEN assessment, education psychology and 14-19 services or all of the safeguarding and children's social care teams and their associated costs. This is over and above the £17.655m which will have been taken as savings from the areas covered by EIG over the 4 financial years 2011/12 to 2014/15 with additional savings required for the period post 2014/15.

Children's Services budgets continue to come under pressure from demands within the looked after children placement budgets with the numbers and costs of children in care being significantly higher than the current budget allows. Along with a comparatively low level of funding for schools, there is already significant burden on children's services budgets. Any reductions required to fund a gap in EIG funding and the proposed reduction in LACSEG funding would need to be found from learning and achievement, early help, services for children with disabilities (e.g. short breaks) or positive activities for young people. This goes against the current political steer and the requirement to invest in targeted and preventative services which reduce the demand on high cost specialist services avoid the increasing costs of looked after children and the disadvantages placed upon children with low educational attainment prospects.

The Council is currently implementing its Early Help Strategy which aims to improve outcomes for vulnerable children by earlier identification and targeted support at the point of need (nipping issues in the bud). The Strategy is crucial in reducing the demand for social care services. Social care referrals have been rising since 2011 and this has been directly linked to the effects of the recession, alongside increased publicity after the concerns surrounding baby Peter Connolly. If funding is reduced to implement Early Help then the demand for social care services is likely to continue to rise unchecked. As the Council has a statutory duty to ensure children in Worcestershire are safeguarded and to provide services for children 'in need', this will mean an increased amount of Council resources will have to be directed to ensure statutory duties are met.

F40 Funding Impacts Paper – December 2012 17

AGENDA ITEM 7 WORCESTERSHIRE SCHOOLS FORUM 11th JANUARY 2013

REPORT TO THE WORCESTERSHIRE SCHOOLS FORUM (WSF) THE SCHOOL AND EARLY YEARS FINANCE (ENGLAND) REGULATIONS 2012

1. PURPOSE

1.1 To advise the WSF on the new regulations for 2013-14.

2. BACKGROUND

2.1 On 7th December 2012 the DfE published the above regulations.

2.2 These how now been laid and came into force on 1st January 2013. They apply for the 2013-14 financial year only.

2.3 They give effect to the changes to the school funding system previously announced, including simplified local funding formulae, the new 'place plus' system for funding high needs and increased delegation of central budgets.

2.4 The DfE have published: - The Full Regulations (Appendix A). A note explaining the main features of the regulations (Appendix B). An explanatory memorandum (Appendix C). Revised conditions of grant attached to the Dedicated Schools Grant (DSG) (Appendix D).

2.4 This is to ensure that academies and other providers are treated on the same basis as maintained schools where appropriate.

3. KEY ISSUES FOR CONSIDERATION

3.1 A summary of the key issues is as follows: -

3.2 Regulation 1 Definitions

The definition of contingencies, which can be de-delegated for maintained primary and secondary schools, is restricted to expenditure which it would be unreasonable to expect governing bodies to meet from their budget share. This may include: -  Schools in financial difficulty.  Deficits of closing schools.  New, amalgamating or closing schools.  Other unforeseen expenditure.

Hospital education is defined as a form of provision normally on a temporary basis for certain children with medical needs. It is usually provided in a hospital school, pupil referral unit or a centrally funded service.

3.3 Regulation 3 De-delegation

Approval for de-delegation to be with primary or secondary maintained school members of the Schools Forum for their phase only

3.4 Regulation 5 Schools Budget

Brings forward from 31st March to 15th March the date by which LAs must make an initial determination of their schools budget and notify this to their maintained schools.

3.5 Regulation 6 Definition of the Schools Budget

Extends this to include expenditure on young people in further education aged under 19 with learning difficulties, and those aged 19 to 25 subject to learning difficulty assessment.

3.6 Regulation 8 Determination of the ISB and Central Expenditure

Brings forward from 31st March to 15th March the date by which LAs must have decided on their levels of central schools budget expenditure. Specifies that expenditure on certain central services can only continue if the expenditure is already committed as a result of decisions made in a previous funding period. Specifies that planned expenditure on certain central services cannot exceed the planned expenditure on that line in the previous year, unless the Secretary of State agrees on application by the LA. Specifies that the schools forum must approve the criteria on which any funding retained for pupil growth is to be allocated.

3.7 Regulation 9 Consultation

Requires LAs to consult all schools about changes to their school funding formula. The same applies to the early years formula, where there must be consultation with all providers. Requires LAs to consult their schools forum before any allocations are made from the growth fund.

3.8 Regulation 11 School Budget Determination

Requires budgets to be determined by 15th March for maintained schools and pupil referral units, and by 31st March for budgets issued under the early years formula. These must then be notified to the Governing Bodies by 31st March. Formalises the requirement for LAs to identify, within a mainstream school’s budget share, a notional special educational needs budget. The DfE expect the factors listed in regulation 15 (social deprivation) and paragraphs 2 and 3 of schedule 3 (low prior attainment) to be most relevant to the calculation of this notional budget but other factors can also be used. Provision for de-delegation for certain budgets in maintained primary and secondary schools.

3.9 Regulation 13 Pupil Numbers

Sets out the simplified requirements on the use of pupil numbers in the school formula, including the ability to use an October to January uplift for reception pupil numbers.

3.10 Regulation 14 High Needs Pupils

Sets out how LAs must calculate the budget shares for: -  Maintained special schools, and special units and resourced provision in mainstream schools (base funding of £10,000 per place).  Maintained pupil referral units (PRUs) (base funding of £8,000 per place).  In both special schools and PRUs hospital education places are to be funded at the same rate per place as applied in 2012-13. It is however open to LAs to fund additional places from their high needs block where they believe this is justified.

3.11 Regulation 15 Mandatory Deprivation Factors

Sets out in the schools and early years formulae how these may be calculated. For disadvantaged two year olds, there will not be a requirement to have a mandatory deprivation supplement.

3.12 Regulations 16 and 17 Early Years Single Funding Formula (EYSFF)

LAs must fund on the basis of participation except for children with SEN or children in need, where they can continue to fund on a place basis. This place- based approach will be extended for two year olds but on a time-limited approach to support preparation for the entitlement. Allows differentiation between different types of early years providers.

3.13 Regulation 18 and Schedule 3 Additional Formula Factors

Allows LAs to use the following additional factors in their schools and early years formulae: -  Single Lump Sum for each school.  Low prior attainment.  EAL 3 year maximum.  Pupil Mobility.  LAC.  Split Sites.  Non domestic rates.  PFI.  London Fringe.  Quality of provision (EYSFF only).  Flexibility of provision (EYSFF only).  Sufficiency of provision (EYSFF only).

Allows LAs to cap or scale back gains under the new formula using the same comparisons between years as in the Minimum Funding Guarantee (MFG) calculation, and applied consistently to all schools in the LA.

3.14 Regulation 19 and Schedule 4 MFG

Sets out the MFG requirements for primary and secondary schools and the application of the MFG to the early years formula, which applies to base rates.

3.15 Regulations 21 and 22 New and Federated Schools

Requires LAs to determine budgets for new schools, but only from their opening (any lead-in costs would need to be funded from the growth fund). Enables LAs to issue a single budget share for federated schools, but if done so then this must be calculated by combining the budget shares of the individual schools.

3.16 Regulation 23 Permanent Exclusions

Carries forward the existing arrangements for reducing or increasing schools’ budget shares as a result of the movement of permanently excluded pupils to and from a school. Amounts equivalent to the pupil premium also transfer for eligible pupils, while the excluding school’s budget must also be reduced by the amount of any financial adjustment order.

3.17 Regulation 24 Budget Redeterminations

These as a consequence of errors would take effect in the following funding period.

3.18 Regulation 27 Schemes for Financing Schools

Changes to these must be approved by the maintained school members of the schools forum.

3.19 Schedule 1 Non Schools Budget Services Funded from General LA Resources

SEN Provision. School Improvement. Access to Education. Strategic Management. Additional Education and Training. Other Functions.

3.20 Schedule 2 Centrally Retained Schools Budget Services

Central Services (where expenditure is restricted to what was planned in 2012- 13): -  School Admissions.  Servicing of Schools Forums.  Capital Expenditure from Revenue (CERA).  Prudential Borrowing.  Termination of Employment Costs.  Combined Services.  SEN Transport.

Central Services (where expenditure is not restricted): -  Staff Pay Arrears.  Growth Fund to support increases in pupil numbers relating to basic need and start up costs for new schools. The growth fund does not apply to existing non- recoupment Academies.  Carbon Reduction Commitment and as costs may rise in 2013-14, this will not be restricted to 2012-13 levels.

Central Early Years Expenditure.

Funding for Pupils with High Needs for distribution as top-up funding in respect of individual pupils to: -  Mainstream schools and Academies with special educational needs.  Early Years providers.  Special schools and Academies, and to special units and resourced provision in mainstream schools and Academies.  Further Education providers up to the age of 25 who have learning difficulties.  LA support services for pupils with special educational needs, whether or not they have statements. Such services include, for example, sensory support and other specialist services.  LA funding for promoting the integration of pupils with special educational needs in mainstream schools.  PRUs as top-up funding or for central services in respect of pupils in other alternative provision.  Supporting children with behavioural difficulties with the approval of the schools forum as a de-delegated item.  LAs for funding for fees in respect of the placement of pupils with special educational needs in independent schools, non-maintained special schools and schools outside England and Wales. In 2013-14 non-maintained special schools will receive base funding of £10,000 per place from the EFA; independent special schools and schools outside England will not.  LAs to provide centrally funded hospital education services which are not classed as special schools or PRUs.  LAs to provide support to special schools or PRUs in financial difficulty.  LAs to meet ongoing revenue costs relating to special schools which have been built or refurbished under a Building Schools for the Future (BSF) or other private finance initiative (PFI) project.

De-delegated Services for Maintained Primary and Secondary Schools (these are allocated in schools’ formula budgets initially but can then be taken out and retained centrally where approved by the relevant schools forum members): -  Pupils with Behavioural Difficulties.  FSM eligibility.  Staff Supply Cover.  Schools Insurance.  Schools Library Services.  Licences and Subscriptions.  Schools Specific Contingency.

3.21 Schedule 5 Items in LA Schemes for Financing Schools

See Agenda Item 9.

3.22 Conditions of Grant

DSG Coverage: -  Pupils at most Academies (other than a few mostly early Academies which are not funded by way of the DSG and recoupment)  From 2013-14 will encompass also funding for high needs pupils and students aged 16-24.  Academies will from 2013-14 be funded using the LAs formula for the current financial year. This is recouped from LAs Additional DSG conditions require LAs to: -  Maintain a single formula to be used for funding both maintained schools and Academies.  Take account of the circumstances of local academies as well as maintained schools.  To use centrally retained funding for the benefit of maintained schools and of recoupment Academies on an equivalent basis. The exception is funding that can be de-delegated by maintained schools.  When making arrangements for funding children and young people with high needs, to treat all providers – maintained, academy, free schools, FE, non- maintained and independent – on a fair and equivalent basis. LAs must not make placements on the basis of the type of provider but on the suitability of the provision and the wishes of the child’s parents or young person, and whether the proposed provision offers value for money.  To put minimum protections in place when setting top-up funding rates for maintained special schools or special Academies formerly maintained by the LA. This protection is analogous to the MFG. The condition does not apply formally to special units and resourced provision because of the difficulty of defining their base budgets in 2012-13.  To set top-up funding rates at a level that would maintain the budgets of special schools and units close to 2012-13 levels, unless there are planned changes in provision.  To maintain placements already in existence at 1st April 2013 by entering into an agreement to provide top-up funding to the relevant institution.  To enter into agreements for top-up funding in respect of pupils placed at later dates.  For payments of top-up funding to be made to providers on a monthly basis unless otherwise agreed with the institution.

4. RECOMMENDATION

4.1 The WSF notes and comments on the issues.

Andy McHale Service Manager Funding and Business Development January 2013 STATUTORY INSTRUMENTS

2012 No. 2991

EDUCATION, ENGLAND

The School and Early Years Finance (England) Regulations 2012

Made - - - - 27th November 2012 Laid before Parliament 7th December 2012 Coming into force - - 1st January 2013

CONTENTS PART 1 Introduction

1. Citation, commencement, application and interpretation 2. Revocation of previous Regulations 3. Amendments

PART 2 Action to be Taken by a Local Authority CHAPTER 1 Appropriation of the Non-Schools Education Budget 4. The Non-Schools Education Budget

CHAPTER 2 Determination of Schools Budgets, Individual Schools Budgets, and Budget Shares 5. Initial determination of a local authority’s schools budget 6. The schools budget 7. Exceptions 8. Determination of the individual schools budget for the funding period and limit on increase in central expenditure 9. Consultation 10. Formulae for determination of budget shares etc for certain maintained schools and early years providers 11. Determination of allocation of budget shares etc for the funding period

CHAPTER 3 Further Deductions and Variations to Limits Authorised by Schools Forums or the Secretary of State 12. Applications to the schools forum and the Secretary of State

PART 3 Determination of Budget Shares etc CHAPTER 1 Requirements, and Factors and Criteria Taken into Account 13. Pupil numbers 14. Places 15. Social deprivation 16. Special arrangements for pupils in maintained nursery schools and nursery classes and for children receiving relevant early years provision 17. Differential funding 18. Additional requirements, factors or criteria 19. Minimum funding guarantee 20. Sixth form funding 21. New schools 22. Federated schools

CHAPTER 2 Adjustments, Correction of Errors, and Alternative Arrangements Authorised by the Secretary of State 23. Pupils permanently excluded from, or leaving, maintained schools 24. Correction of errors and changes in non-domestic rates 25. Alternative arrangements approved by Secretary of State

PART 4 Schemes

26. Required content of schemes 27. Approval by the schools forum or the Secretary of State of proposals to revise schemes 28. Publication of schemes

SCHEDULE 1 — CLASSES OR DESCRIPTIONS OF PLANNED EXPENDITURE PRESCRIBED FOR THE PURPOSES OF THE NON-SCHOOLS EDUCATION BUDGET OF A LOCAL AUTHORITY SCHEDULE 2 — CLASSES OR DESCRIPTIONS OF PLANNED EXPENDITURE PRESCRIBED FOR THE PURPOSES OF THE SCHOOLS BUDGET OF A LOCAL AUTHORITY WHICH MAY BE DEDUCTED FROM IT TO DETERMINE THE INDIVIDUAL SCHOOLS BUDGET PART 1 — Central Services PART 2 — Central Schools Expenditure PART 3 — Central Early Years Expenditure PART 4 — Pupils With High Needs PART 5 — Items That May Be Removed From Maintained Schools’ Budget Shares SCHEDULE 3 — ADDITIONAL REQUIREMENTS, OR FACTORS OR CRITERIA WHICH MAY BE TAKEN INTO ACCOUNT, IN A LOCAL AUTHORITY’S FORMULA UNDER REGULATION 18

2 PART 1 — Applicable only to budget shares for maintained schools PART 2 — Applicable only to budget shares for, and amounts to be allocated to, providers of prescribed early years provision SCHEDULE 4 — MINIMUM FUNDING GUARANTEE SCHEDULE 5 — CONTENTS OF SCHEMES

The Secretary of State for Education makes the following Regulations in exercise of powers conferred by sections 45A(a), 45AA(b), 47(c), 47ZA(d), 47A(4)(e), 48(1) and (2)(f), 49(2) and (2A)(g) and 138(7) of, and paragraph 2B(h) of Schedule 14 to, the School Standards and Framework Act 1998(i) and section 24(3) of the Education Act 2002(j).

PART 1 Introduction

Citation, commencement, application and interpretation 1.—(1) These Regulations may be cited as the School and Early Years Finance (England) Regulations 2012 and come into force on 1st January 2013. (2) These Regulations apply in relation to the financial year beginning on 1st April 2013. (3) These Regulations apply only in relation to England. (4) In these Regulations— “the 1996 Act” means the Education Act 1996(k); “the 1998 Act” means the School Standards and Framework Act 1998; “the 2002 Act” means the Education Act 2002; “the 2005 Act” means the Education Act 2005(l); “the 2006 Act” means the Education and Inspections Act 2006(m); “the 2009 Act” means the Apprenticeships, Skills, Children and Learning Act 2009(n); “the 2012 Regulations” means the School Finance (England) Regulations 2012(o); “academic year” means any period commencing with 1st August and ending with the next 31st July; “capital expenditure” means expenditure of a local authority which falls to be capitalised in accordance with proper practices, or expenditure treated as capital expenditure by virtue of

(a) Inserted by section 41(1) of the 2002 Act and amended by section 101 of, and paragraph 3 of Schedule 16 to, the 2005 Act. (b) Inserted by section 101 of, and paragraph 4 of Schedule 16 to, the 2005 Act. (c) Amended by section 101 of, and paragraph 6 of Schedule 16 to, the 2005 Act. (d) Inserted by section 202 of the Apprenticeships, Skills, Children and Learning Act 2009 (c.22). (e) Section 47A was inserted by section 43 of the 2002 Act and amended by section 101 of, and paragraph 7 of Schedule 16 to, the 2002 Act, section 57 of, paragraph 2 of Schedule 5 to, the 2006 Act, section 165 of the Education and Skills Act 2008 (c.25) and section 194 of the Apprenticeships, Skills, Children and Learning Act 2009. (f) Section 48 was amended by section 40 of, and paragraph 2 of Schedule 3 to, the 2002 Act, section 117 of, and paragraph 7 of Schedule 18 to, the 2005 Act, section 57 of, and paragraph 3 of Schedule 5 to, the 2006 Act. (g) Subsections (2) and (2A) were substituted for subsections (2) and (3), as originally enacted, by section 57 of, and paragraph 4 of Schedule 5 to, the 2006 Act. (h) Paragraphs 2A and 2B of Schedule 14 were substituted for paragraph 2, as originally enacted, by section 57 of, and paragraph 5 of Schedule 5 to, the 2006 Act. (i) 1998 c.31. For the meaning of “prescribed” and “regulations”, see section 142(1) of the 1998 Act. (j) 2002 c.32. For the meaning of “prescribed” and “regulations”, see section 212 of the 2002 Act. (k) 1996 c.56. (l) 2005 c.18. (m) 2006 c.40. (n) 2009 c.22. (o) S.I. 2012/335.

3 any regulations or directions made under section 16 of the Local Government Act 2003(a); “CRC” means the CRC Energy Efficiency Scheme operated by the Environment Agency; “central expenditure” means the total amount deducted by a local authority from their schools budget in accordance with regulation 8; “CERA” means capital expenditure which an authority expect to charge to a revenue account of the authority within the meaning of section 22 of the Local Government Act 2003; “children in need” means children in respect of whom the local authority in whose area they reside must provide a range and level of services appropriate to their needs under section 17 of the Children Act 1989(b); “combined service” is a service funded partly from central expenditure, and partly from other budgets of the authority or contributions from other bodies; “Dedicated Schools Grant” is a grant of that name paid to a local authority by the Secretary of State under section 14 of the 2002 Act; “Early Years Foundation Stage Profile” has the meaning given in section 39 of the Childcare Act 2006(c); “early years provision” has the meaning given in section 20 of the Childcare Act 2006; “expenditure on the schools specific contingency” is central expenditure deducted for the purpose of ensuring that monies are available to enable an increase in a school’s budget share after it has been allocated and where it subsequently becomes apparent that a governing body have incurred expenditure which it would be unreasonable to expect them to meet from the school’s budget share which may include expenditure in relation to— (i) schools in financial difficulty, (ii) the writing-off of deficits of schools which are discontinued, excluding any associated costs and overheads, (iii) new, amalgamating or closing schools, or (iv) other expenditure where the circumstances were unforeseen when initially determining the school’s budget share; “funding period” means the financial year beginning on 1st April 2013; “hospital education” means education provided at a community special school or foundation special school established in a hospital, or under any arrangements made by the local authority under section 19 of the 1996 Act (exceptional provision of education), where the child is being provided with such education by reason of a decision made by a medical practitioner and “hospital education places” shall be read accordingly; “IDACI” means the Income Deprivation Affecting Children Index; “IDACI bands” means the groupings of IDACI scores as published by the Department for Education in the document named “School Funding Reform: Arrangements for 2013-14”(d); “IDACI score” means the score allocated to a child under IDACI; “institution within the further education sector” has the meaning given in section 91(3) of the Further and Higher Education Act 1992(e); “key stage” means the key stage of the National Curriculum for England comprising the requirements and entitlements described in sections 84, 85 and 85A of the 2002 Act(f) and “key stage 1”, “key stage 2”, “key stage 3” and “key stage 4” mean the first, second, third and

(a) 2003 c.26. Regulations made under this section in relation to England are the Local Authorities (Capital Finance and Accounting) (England) Regulations 2003 (S.I. 2003/3146, as amended by S.I. 2004/534, 2004/3055 and 2007/573). (b) 1989 c.41. (c) 2006 c.21. (d) Available at: http://media.education.gov.uk/assets/files/pdf/s/school%20funding%20reform%20-%20final%202013- 14%20arrangements.pdf (e) 1992 c.13. (f) Sections 85 and 85A were substituted for section 85, as originally enacted, by section 74(1) of the 2006 Act.

4 fourth key stages referred to in those sections respectively, and references to the number of pupils at those key stages are references to the number at the school on 4th October 2012 unless otherwise stated; “learning difficulty” means a significantly greater difficulty in learning than the majority of persons of his or her age, or a disability which either prevents or hinders the person from making use of facilities of a kind generally provided for further education to persons of his or her age; “learning difficulty assessment” has the meaning given in section 13(5) of the 1996 Act, and a reference to a person being subject to learning difficulty assessment has the meaning given in section 13(4) of the 1996 Act; “looked after child” means a person who, for the purposes of the Children Act 1989, is a child looked after by a local authority, and references to the authority looking after the child are to be read accordingly; “non-domestic rate” has the meaning given in section 54 of the Local Government Finance Act 1988(a); “PFI scheme unitary payment” means a charge payable by a local authority under a private finance transaction, as defined in regulation 16 of the Local Authorities (Capital Finance) Regulations 1997(b); “prescribed early years provision” means early years provision prescribed for the purposes of section 7(1) of the Childcare Act 2006; “previous funding period” means the financial year beginning on 1st April 2012; “primary or secondary school” means a primary or secondary school which is a community, foundation or voluntary school; “proper practices” means those accounting practices which a local authority are required to follow by virtue of any enactment, or which, so far as they are consistent with any such enactment are generally regarded, whether by reference to any generally recognised published code or otherwise, as proper accounting practices to be followed in the keeping of the accounts of local authorities, either generally or of the description concerned(c); “provider”, in relation to prescribed early years provision, may be a governing body of a school or a relevant early years provider; “prudential borrowing” means borrowing money for the purpose of facilitating the modernisation and rationalisation of the school estate, where the revenue savings expected to be achieved are equal to or more than the expenditure expected to be incurred in borrowing the money; “pupil premium” means the amount allocated by a local authority from the pupil premium grant to a school in respect of each registered pupil at that school who is entitled to it under the terms and conditions of the grant; “pupil premium grant” is a grant of that name paid to a local authority by the Secretary of State under section 14 of the 2002 Act in respect of pupils who are entitled to a pupil premium; “relevant early years provider” means a provider of prescribed early years provision, other than the governing body of a maintained school; “relevant early years provision” means prescribed early years provision provided by a relevant early years provider;

(a) 1988 c.41. (b) S.I. 1997/319. These Regulations have lapsed but article 11 of the Local Authorities (Capital Finance) (Consequential, Transitional and Savings Provisions) Order 2004 (S.I. 2004/533) contains a savings provision for regulation 16 of the 1997 Regulations. (c) This definition is taken from section 21 of the Local Government Act 2003 and regulation 31 of the Local Government (Capital Finance and Accounting) (England) Regulations 2003 (S.I. 2003/3146).

5 “school census” means the record of individual pupil information supplied by local authorities to the Secretary of State under section 537A of the 1996 Act; “school year” has the meaning given in section 579(1) of the 1996 Act(a); “sixth form grant” means a grant of that name paid to a local authority by the Secretary of State under section 14 of the 2002 Act in respect of sixth form pupils, on condition that it is passed on to a particular school; “special Academy” means an Academy which meets the requirements of section 1A(2) of the Academies Act 2010(b); “specific grant” means any grant (other than the Dedicated Schools Grant or any sixth form grant) paid to a local authority under conditions which impose restrictions on the particular purposes for which the grant may be used; “unavoidable costs” means costs which must be incurred by virtue of a statutory requirement. (5) In these Regulations— a reference to a determination or redetermination of a budget share or amount to be allocated is for the funding period, unless otherwise stated; a reference to a “governing body” of a school shall include the management committee of a pupil referral unit; a reference to a particular class or description of expenditure in relation to maintained schools and to pupils registered at such schools includes such expenditure of that class or description as the authority may incur in relation to Academies, and to pupils registered at Academies; a reference to “special educational needs transport costs”, for the purposes of paragraph 4(d) of Schedule 2, is a reference to the costs of home to school transport for pupils with special educational needs in schools maintained by a local authority where the authority are meeting such costs because the revenue savings that will be achieved by placing such children in a school maintained by them are equal to, or greater than, the costs of such transport; and a reference to “termination of employment costs”, for the purposes of paragraph 4(b) of Schedule 2, is a reference to expenditure relating to the dismissal or premature retirement of, or for the purpose of securing the resignation of, any person employed in a maintained school.

Revocation of previous Regulations 2. The Financing of Maintained Schools (England) Regulations 2004(c), the School Finance (England) Regulations 2011(d) and the School Finance (Amendment) (England) Regulations 2011 (e) are revoked on 1st April 2013.

Amendments 3.—(1) The Schools Forums (England) Regulations 2012(f) are amended as follows. (2) In regulation 8— (a) in paragraph (9), for “paragraph (10)”, substitute “paragraphs (9A) to (10)”, (b) after paragraph (9) insert— “9A. Only the schools members of the schools forum who are representatives of primary schools may vote to decide whether or not to authorise the matters referred to in regulation 12(1)(d) of the School and Early Years Finance (England) Regulations 2012 where they relate to primary schools.

(a) Section 57(1) of, and paragraph 43 of Schedule 7 to, the Education Act 1997 (c.44) inserted this definition. (b) 2010 c.32 as amended by section 53(7) of the Education Act 2011 (c.21). (c) S.I. 2004/3130. (d) S.I. 2011/371. (e) S.I. 2011/778. (f) S.I. 2012/2261.

6 9B. Only the schools members of the schools forum who are representatives of secondary schools may vote to decide whether or not to authorise the matters referred to in regulation 12(1)(d) of the School and Early Years Finance (England) Regulations 2012 where they relate to secondary schools.”

PART 2 Action to be Taken by a Local Authority CHAPTER 1 Appropriation of the Non-Schools Education Budget

The Non-Schools Education Budget 4. The following classes or descriptions of local authority expenditure are prescribed for the purposes of section 45A(1) of the 1998 Act and the determination of a local authority’s non- schools education budget, subject to the exceptions in regulation 7— (a) those specified in Schedule 1, including expenditure on associated administrative costs and overheads; and (b) any expenditure which falls outside the classes or descriptions of expenditure specified in regulation 6 and Schedule 2 (the schools budget). CHAPTER 2 Determination of Schools Budgets, Individual Schools Budgets, and Budget Shares

Initial determination of a local authority’s schools budget 5. A local authority must not later than 15th March 2013— (a) make an initial determination of their schools budget; and (b) give notice of that determination to the governing bodies of the schools they maintain.

The schools budget 6.—(1) The classes or descriptions of local authority expenditure specified in sub-paragraphs (a) to (e) and Schedule 2 are prescribed for the purposes of section 45A(2) of the 1998 Act and the determination of a local authority’s schools budget, subject to paragraph (2) and the exceptions in regulation 7— (a) expenditure on the provision and maintenance of maintained schools and on the education of pupils registered at maintained schools; (b) expenditure on the education of pupils at independent schools, non-maintained special schools, pupil referral units, at home or in hospital, and on any other arrangements for the provision of primary and secondary education for pupils otherwise than at schools maintained by a local authority; (c) all other expenditure incurred in connection with the authority’s functions in relation to the provision of primary and secondary education, in so far as that expenditure does not fall within sub-paragraph (a) or (b); (d) expenditure on the education of— (i) pupils or students up to the age of 25 with special educational needs, (ii) persons provided with further education who are aged under 19 and have learning difficulties, and (iii) persons provided with further education who are aged 19 or over but under 25 and are subject to learning difficulty assessment,

7 in so far as that expenditure does not fall within sub-paragraphs (a) to (c); and (e) expenditure on early years provision, in so far as that expenditure does not fall within sub-paragraphs (a) to (d). (2) Where a local authority operates a combined service for the benefit of pupils referred to in paragraph (1), expenditure referred to in paragraph 36(c) of Schedule 2 to the 2012 Regulations is only expenditure prescribed for the purposes of section 45A(2) of the 1998 Act and the determination of a local authority’s schools budget where that expenditure is incurred in providing an educational benefit to those pupils.

Exceptions 7. A local authority’s non-schools education budget or schools budget must not include the following classes or descriptions of expenditure— (a) capital expenditure, other than— (i) CERA, (ii) capital expenditure appropriated to the schools budget for the purpose of funding pay arrears due to staff whose salaries are met from the schools budget; (b) expenditure on capital financing, other than expenditure incurred— (i) on prudential borrowing, (ii) for the purpose of meeting the costs of financing the payment of pay arrears referred to in paragraph (a)(ii); and (c) expenditure for the purposes of section 26 of the Road Traffic Regulation Act 1984(a) (arrangements for patrolling school crossings).

Determination of the individual schools budget for the funding period and limit on increase in central expenditure 8.—(1) Subject to paragraphs (2) to (8), not later than 15th March 2013, a local authority must deduct from their schools budget such of the classes or descriptions of planned expenditure set out in Schedule 2 (“the central expenditure”) as they propose to deduct, in order to determine their individual schools budget. (2) Central expenditure referred to in paragraphs 3 and 4 of Part 1 (Central Services) of Schedule 2 may only be deducted by the local authority where the expenditure is to be incurred as a result of decisions taken in previous funding periods that commit the authority to incur expenditure in the funding period. (3) In deducting the central expenditure referred to in Part 1 (Central Services) of Schedule 2, a local authority must not exceed the limits referred to in paragraph 5 of Schedule 2, unless they are authorised to do so under regulation 25. (4) A local authority must not deduct the central expenditure referred to in paragraphs 8 or 9 of Schedule 2 without authorisation from their schools forum under regulation 12(1), or the Secretary of State under regulation 12(3), of the criteria for determining the expenditure. (5) A local authority must not deduct the central expenditure referred to in Part 1 (Central Services), Part 2 (Central Schools Expenditure), Part 3 (Central Early Years Expenditure) or Part 5 (Items That May Be Removed From Maintained Schools’ Budget Shares) of Schedule 2 without authorisation from their schools forum under regulation 12(1), or the Secretary of State under regulation 12(3). (6) Where a local authority carries forward a deficit in the central expenditure from the previous funding period to the funding period which reduces the amount of the schools budget available,

(a) 1984 c.27. Section 26 was amended by section 8 of, and Schedule 5 to, the Local Government Act 1985 (c.51), sections 288 and 423 of, and Schedule 34 to, the Greater London Authority Act 1999 (c.29) and sections 270 and 274 of, and Schedule 31 to, the Transport Act 2000 (c.38).

8 the funding of this deficit from the schools budget must be authorised by their schools forum under regulation 12(1), or the Secretary of State under regulation 12(3). (7) A local authority may apply to the Secretary of State for authorisation under regulation 25(1) to deduct from their schools budget any expenditure falling outside the classes or descriptions of planned expenditure set out in Schedule 2, in order to determine their individual schools budget. (8) References to planned expenditure in this regulation and Schedule 2 are references to that expenditure net of— (a) all related specific grants; (b) all related fees, charges and income; and (c) any funding received from the Secretary of State in respect of PFI scheme unitary payments, and the expenditure referred to in Schedule 2 includes expenditure on associated administrative costs and overheads.

Consultation 9.—(1) In determining the formulae under regulation 10 a local authority may make changes to the formulae they determined under regulation 9 of the 2012 Regulations. (2) Subject to paragraph (4), a local authority must consult their schools forum and schools maintained by them about any proposed changes under paragraph (1), in relation to the factors and criteria taken into account, and the methods, principles and rules adopted. (3) Where a local authority proposes to makes changes under paragraph (1) which will affect relevant early years providers in their area they must also consult those providers in relation to the factors and criteria taken into account, and the methods, principles and rules adopted. (4) Paragraph (2) does not apply to changes made relating to matters referred to in regulation 20 (sixth form funding) or 23 (excluded pupils). (5) A local authority must consult their schools forum before incurring any of the expenditure referred to in paragraphs 8 or 9 of Schedule 2.

Formulae for determination of budget shares etc for certain maintained schools and early years providers 10.—(1) A local authority must, before the beginning of the funding period and after carrying out any consultation required by regulation 9(2), decide upon the formula which they will use to determine the budget shares for schools maintained by them (other than special schools, pupil referral units, nursery schools and in relation to nursery classes in schools maintained by them). (2) A local authority must use the formula determined under paragraph (1) in all determinations of school budget shares in respect of the funding period. (3) A local authority must, before the beginning of the funding period and after carrying out any consultation required by regulation 9(2) or 9(3), decide upon the formula they will use to determine— (a) the budget shares for nursery schools maintained by them; (b) the amounts to be allocated in respect of nursery classes in schools maintained by them; and (c) the amounts to be allocated to relevant early years providers in their area. (4) A local authority must use the formula determined under paragraph (3) in all determinations of budget shares for nursery schools maintained by them, the amounts to be allocated in respect of nursery classes in schools maintained by them and the amounts to be allocated to relevant early years providers in their area in respect of the funding period. (5) A local authority may not make changes to their formulae after the funding period has commenced.

9 Determination of allocation of budget shares etc for the funding period 11.—(1) Not later than 15th March 2013, a local authority must determine the budget share for each of the schools maintained by them (other than special schools, pupil referral units, nursery schools and in relation to nursery classes in schools maintained by them), using the formula referred to in regulation 10(1) in accordance with Part 3 of these Regulations. (2) When making the determination under paragraph (1) the local authority must identify within each budget share an amount calculated by reference to the requirements, factors and criteria specified in Part 3 which are relevant to pupils with special educational needs. (3) After the local authority has made a determination under paragraph (1) but before giving notice under paragraph (6), the authority may apply to their schools forum under regulation 12(1), or to the Secretary of State under regulation 12(3) for authorisation to redetermine schools’ budget shares by removing any of the expenditure referred to in Part 5 of Schedule 2 (Items That May Be Removed From Maintained Schools’ Budget Shares) from the budget shares of— (a) all primary schools other than nursery schools, (b) all secondary schools, or (c) all primary schools other than nursery schools, and all secondary schools, where the expenditure is instead to be treated as central expenditure. (4) Not later than 15th March 2013, a local authority must determine the budget share for each of the special schools and pupil referral units maintained by them in accordance with Part 3 of these Regulations. (5) Not later than 31st March 2013, a local authority must determine the budget share for each of the nursery schools maintained by them, the amount to be allocated in respect of each nursery class in schools maintained by them and the amount to be allocated to each relevant early years provider in their area, using the formula referred to in regulation 10(3) in accordance with Part 3 of these Regulations. (6) Not later than 31st March 2013, a local authority must give notice of each budget share or amount determined under paragraphs (1), (4) and (5) to the governing body of the school or the relevant early years provider concerned, except where the budget share has been redetermined under paragraph (3) in which case the authority must give notice of the redetermined budget share. CHAPTER 3 Further Deductions and Variations to Limits Authorised by Schools Forums or the Secretary of State

Applications to the schools forum and the Secretary of State 12.—(1) Subject to paragraph (2), on the application of a local authority, their schools forum may authorise— (a) the criteria for determining expenditure referred to in paragraphs 8 or 9 of Schedule 2, under regulation 8(4); (b) the making of deductions from the authority’s schools budget of certain central expenditure under regulation 8(5); (c) the funding of any deficit in the authority’s central expenditure from the schools budget under regulation 8(6); or (d) the redetermination of schools’ budget shares by removal of any of the expenditure referred to in Part 5 of Schedule 2 (Items That May Be Removed From Maintained Schools’ Budget Shares) from schools’ budget shares where it is instead to be treated by the authority as central expenditure, under regulation 11(3). (2) Where— (a) a schools forum does not authorise any of the matters referred to in paragraph (1); or (b) a local authority are not required to establish a schools forum for their area,

10 the authority may make an application to the Secretary of State for such authorisation. (3) On the application of a local authority under paragraph (2), the Secretary of State may authorise the matters referred to in paragraph (1).

PART 3 Determination of Budget Shares etc CHAPTER 1 Requirements, and Factors and Criteria Taken into Account

Pupil numbers 13.—(1) Subject to regulation 16 (special arrangements for pupils in maintained nursery schools and nursery classes and children receiving relevant early years provision) and paragraph (2), in determining and redetermining budget shares for primary and secondary schools, a local authority must ascertain and take into account in their formula the number of registered pupils at those schools on the date specified in paragraph (3). (2) For the purposes of paragraph (1), the number of registered pupils does not include pupils— (a) in places in primary or secondary schools which the authority have reserved for children with special educational needs, or (b) in respect of whom a sixth form grant is payable. (3) The date for ascertaining pupil numbers is 4th October 2012. (4) Where a primary school had more registered pupils in reception classes on 19th January 2012 than on 6th October 2011, the authority may take into account in their formula the number of additional pupils, and where they do so this factor must be applied to all primary schools in the area. (5) A local authority must include in their formula a single per pupil amount for each of the following— (a) the number of registered pupils in reception classes and at key stage 1 and 2, (b) the number of registered pupils at key stage 3, and (c) the number of registered pupils at key stage 4, where the number of registered pupils is calculated with reference to paragraphs (2) to (4).

Places 14.—(1) In determining and redetermining budget shares for— (a) special schools, and (b) primary or secondary schools with places which the authority have reserved for children with special educational needs, paragraphs (2) and (3) have effect. (2) A local authority must include the sum of £10,000 for each place other than— (a) places for pupils in respect of whom a sixth form grant is payable, and (b) hospital education places. (3) For each hospital education place the local authority must include the equivalent amount per place which the authority included in their budget share in the previous funding period for hospital education.

11 (4) In determining and redetermining budget shares for pupil referral units, paragraphs (5) and (6) have effect. (5) A local authority must include the sum of £8,000 for each place other than hospital education places. (6) For each hospital education place the local authority must include the equivalent amount per place which the authority provided to the pupil referral unit in the previous funding period for hospital education.

Social deprivation 15.—(1) In determining budget shares for schools maintained by them (other than special schools, pupil referral units or nursery schools), a local authority must take into account in their formula a factor or factors based on the incidence of social deprivation in pupils registered at the schools maintained by them, subject to paragraphs (2) to (4). (2) The authority must base the incidence of social deprivation referred to in paragraph (1) on one or both of the following— (a) either a pupil’s eligibility for free school meals on 4th October 2012 or a pupil’s eligibility for free school meals recorded in any school census between and including Summer 2006 and Spring 2012, (b) a pupil’s IDACI score on 4th October 2012, and where it is based on an IDACI score the authority may use factors which differentiate between different IDACI bands. (3) In determining budget shares pursuant to paragraph (1) the authority may take into account in their formula a single per pupil amount for each socially deprived pupil in reception classes and at key stage 1 and 2, and a single per pupil amount for each socially deprived pupil at key stage 3 and 4. (4) In paragraph (3) a reference to a “socially deprived pupil” is to a pupil who has been determined as being such pursuant to paragraph (2). (5) Other than in respect of two year olds, in determining— (a) budget shares for maintained nursery schools, (b) amounts to be allocated in respect of nursery classes in schools maintained by them, and (c) amounts to be allocated to relevant early years providers in their area, a local authority must take into account in their formula a factor or factors based on the incidence of social deprivation in pupils registered at the nursery school or in the nursery class or among children receiving relevant early years provision from the provider, and the determination of the incidence of social deprivation must be based on the characteristics of the pupils or children and not on the location of the school or provider. (6) In determining— (a) budget shares for maintained nursery schools, (b) amounts to be allocated in respect of nursery classes in schools maintained by them, and (c) amounts to be allocated to relevant early years providers in their area, in respect of two year olds, a local authority may take into account in their formula a factor or factors based on the incidence of social deprivation in pupils registered at the nursery school or in the nursery class or among children receiving relevant early years provision from the provider, and the determination of the incidence of social deprivation must be based on the characteristics of the pupil or child and not on the location of the school or provider.

12 Special arrangements for pupils in maintained nursery schools and nursery classes and for children receiving relevant early years provision 16.—(1) Subject to paragraphs (5) and (6), in determining— (a) budget shares for nursery schools maintained by them, (b) amounts to be allocated in respect of nursery classes in schools maintained by them, and (c) amounts to be allocated to relevant early years providers in their area, a local authority must take into account in their formula the predicted total number of hours of attendance of registered pupils in the nursery school or nursery class or of children receiving prescribed early years provision from the relevant early years provider, as the case may be, using as a basis for the calculation the most recent data available about the actual numbers of registered pupils or children receiving prescribed early years provision. (2) A local authority must review the budget share for each maintained nursery school and the amount allocated in respect of each nursery class when further information about hours of attendance becomes available, taking into account— (a) in the case where the local authority decide to fund only prescribed early years provision— (i) the predicted total number of hours of attendance of registered pupils in the nursery school or nursery class who will receive prescribed early years provision during the period (using as a basis for the calculation the actual hours of such attendance in each of at least three sample weeks); or (ii) the actual total number of hours of such attendance for the period; (b) in the case where the local authority decide to fund early years provision in excess of that which is prescribed— (i) the predicted total number of hours of attendance of registered pupils in the nursery school or nursery class who will receive early years provision during the period (using as a basis for the calculation the actual hours of such attendance in each of at least three sample weeks); or (ii) the actual total number of hours of such attendance for the period; and redetermine that budget share or amount allocated, as the case may be. (3) A local authority must review the amount allocated to each relevant early years provider, when further information about hours of attendance becomes available, taking into account— (a) the predicted total number of hours of attendance of children who will receive prescribed early years provision from the relevant early years provider during the period (using as a basis for the calculation the actual hours of such attendance in each of at least three sample weeks); or (b) the actual total numbers of hours of such attendance for the period; and redetermine the amount allocated. (4) Where a local authority make any redetermination pursuant to paragraph (2) or (3) they must give notice to the governing body of the school or the relevant early years provider concerned of the redetermination and the date on which it will be implemented, within 28 days of the redetermination. (5) When determining budget shares for maintained nursery schools, amounts to be allocated in respect of nursery classes and amounts to be allocated to relevant early years providers in their area, a local authority may weight the predicted total number of hours of attendance of registered pupils in the nursery school or nursery class or of children receiving prescribed early years provision from the relevant early years provider according to the special educational needs of any such pupils or children. (6) When determining amounts to be allocated to relevant early years providers in their area, a local authority may weight the predicted total number of hours of attendance of children receiving

13 prescribed early years provision from the relevant early years provider according to whether any children have been admitted to the relevant early years provider in excess of the number agreed with the authority. (7) When determining— (a) budget shares for maintained nursery schools, (b) amounts to be allocated in respect of nursery classes in schools maintained by them, and (c) amounts to be allocated to relevant early years providers in their area, a local authority may take into account in their formula the number of places they wish to fund in the school, class or provider (instead of the predicted total number of hours of attendance), where those places have been reserved by the authority for children with special educational needs, children in need or children that meet the condition prescribed by regulation 3(2) of the Local Authority (Duty to Secure Early Years Provision Free of Charge) Regulations 2012(a).

Differential funding 17. For the purpose of determining or redetermining— (a) budget shares for maintained nursery schools, (b) amounts to be allocated in respect of nursery classes in schools maintained by them, and (c) amounts to be allocated to relevant early years providers in their area, a local authority may use factors or criteria which differentiate between different categories or descriptions of school or provider on the basis of unavoidable costs.

Additional requirements, factors or criteria 18.—(1) Subject to paragraph (3), in determining budget shares, a local authority may take into account in their formula any or all of the requirements, factors or criteria set out in Part 1 of Schedule 3, and where they do the date for ascertaining pupil numbers is 4th October 2012, save as otherwise stated. (2) Subject to regulation 17 (differential funding), in determining budget shares for nursery schools maintained by them, amounts to be allocated in respect of nursery classes in schools maintained by them and amounts to be allocated to relevant early years providers in their area, a local authority may take into account in their formula any or all of the requirements, factors or criteria set out in Part 2 of Schedule 3. (3) The requirements, factors and criteria set out in Schedule 3 may not be taken into account by a local authority on the basis of actual or estimated cost unless otherwise stated in that Schedule. (4) Subject to paragraphs (5) and (6), in determining the budget shares for schools maintained by them (other than special schools, pupil referral units and nursery schools), with reference to the per pupil amount of redetermined adjusted budget share for the previous funding period, a local authority may— (a) determine a percentage beyond which the per pupil amount of redetermined adjusted budget share a school would otherwise be allocated must not increase by, or (b) determine a proportionate limit to this increase. (5) In paragraph (4) “redetermined adjusted budget share for the previous funding period” and “redetermined adjusted budget share” have the same meanings as in Schedule 4. (6) Where the local authority decide to determine such a percentage or proportionate limit under paragraph (4) it must be applied to the budget shares of all schools in the local authority area.

(a) S.I. 2012/2488.

14 Minimum funding guarantee 19.—(1) Subject to paragraph (4), in determining and redetermining budget shares for primary and secondary schools maintained by them, a local authority must ensure that an amount equal to the guaranteed funding level is included, calculated in accordance with Schedule 4. (2) For the purpose of determining budget shares, paragraph (1) does not apply to any school opening during the funding period, except in the circumstances set out in paragraph 3 of Schedule 4. (3) In determining and redetermining— (a) budget shares for nursery schools maintained by them, (b) amounts to be allocated in respect of nursery classes in schools maintained by them, and (c) amounts to be allocated to relevant early years providers in their area, a local authority must ensure that the number by which they multiply the predicted total number of hours calculated pursuant to regulation 16(1) is no lower than 1.5 percent less than the number by which they multiplied the predicted total number of hours calculated pursuant to regulation 16(1) of the 2012 Regulations for making such determinations in the previous funding period. (4) A local authority may make changes to the operation of this regulation and to the operation of Schedule 4 in determining and redetermining budget shares where authorised to do so by the Secretary of State under regulation 25 (alternative arrangements).

Sixth form funding 20.—(1) A local authority must include in the budget shares of secondary and special schools an amount equal to any sum notified to the local authority by the Secretary of State as being the allocation in respect of that school’s sixth form grant. (2) A local authority may, in determining budget shares, use a factor which allocates funding in respect of the number of registered pupils in sixth forms on 4th October 2012 subject to the limitation in paragraph (3). (3) Where a local authority use a factor in determining budget shares pursuant to paragraph (2) they must ensure that the amount allocated per pupil in respect of this factor in the funding period is no greater that the amount that was allocated per pupil in sixth forms in the previous funding period, save that in determining the amount allocated per pupil in the previous funding period account should be taken of amounts that formed part of central expenditure in that funding period. (4) A local authority must redetermine the budget share of a secondary school before the end of the funding period where the authority receive a written notification from the Secretary of State of a revised allocation in respect of the sum referred to in paragraph (1).

New schools 21. A local authority must determine a budget share for any new school in their area from the date of the school’s opening in accordance with this Part.

Federated schools 22.—(1) Subject to paragraphs (2) and (3), where two or more schools are federated under section 24 of the 2002 Act, the local authority must determine a budget share for each school in accordance with Part 3 of these Regulations. (2) After carrying out the determination under paragraph (1) the local authority may treat the schools as a single school for the purposes of these Regulations and, accordingly, allocate a single budget share to the governing body of the federation. (3) Where the local authority decide to allocate a single budget share to the governing body of a federation under paragraph (2) they must determine this by combining the budget shares of all the schools that form part of that federation.

15 (4) Where one or more schools are to leave a federation which has been allocated a single budget share under paragraph (2), the local authority must— (a) determine the budget share for each of the leaving schools; and (b) redetermine the budget share for the federation, in accordance with Part 3 of these Regulations. CHAPTER 2 Adjustments, Correction of Errors, and Alternative Arrangements Authorised by the Secretary of State

Pupils permanently excluded from, or leaving, maintained schools 23.—(1) Where a pupil is permanently excluded from a school maintained by a local authority (other than a special school, pupil referral unit or from a place which the authority have reserved for children with special educational needs) (“the excluding school”) the authority must redetermine the excluding school’s budget share in accordance with paragraph (2). (2) The excluding school’s budget share must be reduced by the amount Ax /( 52) + CB where— (a) A is the amount determined by the authority in accordance with this Part, that would be attributable to a registered pupil of the same age and personal circumstances as the pupil in question at primary or secondary schools maintained by the authority for the full funding period; (b) B is the number of complete weeks remaining in the funding period calculated from the relevant date, except that where the permanent exclusion takes effect on or after 1st April in a school year at the end of which pupils of the same age, or age group, as the pupil in question normally leave that school before being admitted to another school with a different pupil age range, B is the number of complete weeks remaining in that school year calculated from the relevant date; and (c) C is the amount of the adjustment made to the school’s budget share pursuant to a financial adjustment order. (3) Where a pupil who has been permanently excluded from a school maintained by a local authority is admitted to another school maintained by a local authority other than a pupil referral unit (“the admitting school”) in the funding period, the authority must redetermine the admitting school’s budget share in accordance with paragraphs (4) and (5). (4)e Th admitting school’s budget share must be increased by an amount which may not be less than the amount Dx FE )/( where— (a) D is the amount by which the authority reduced the budget share of the excluding school, or would have reduced the budget share had that school been maintained by the authority, except that any reduction in the excluding school’s budget share made pursuant to a financial adjustment order must not be taken into account for these purposes; (b) E is the number of complete weeks remaining in the funding period during which the pupil is a registered pupil at the admitting school; and (c) F is the number of complete weeks remaining in the funding period calculated from the relevant date. (5) In redetermining the admitting school’s budget share, the authority may increase it by any amount up to the amount of the adjustment made by the excluding school’s budget share pursuant to a financial adjustment order. (6) Where a permanently excluded pupil is subsequently reinstated by the governing body of the school, the school’s budget share must be increased by an amount which is no less than Gx IH )/( where—

16 (a) G is the amount by which the authority reduced the school’s budget share under paragraph (2); (b) H is the number of complete weeks remaining in the funding period during which the pupil is reinstated; and (c) I is the number of complete weeks remaining in the funding period calculated from the relevant date. (7) Paragraphs (1) and (2) also apply where a pupil leaves a maintained school other than a pupil referral unit for reasons other than permanent exclusion and is receiving education funded by a local authority other than at a school which is maintained by that authority. (8) For the purposes of paragraph (2)(a), the amount attributable to a registered pupil is the sum of the amounts determined in accordance with the authority’s formula, by reference to pupil numbers rather than by reference to any other factor or criterion not dependent on pupil numbers (except that, where the registered pupil in question is a pupil in respect of whom a sixth form grant is payable, the amount attributable to that pupil is £3,135 for the funding period). (9) Where a pupil in respect of whom a pupil premium is payable has been permanently excluded from a school maintained by a local authority other than a pupil referral unit (“the excluding school”) the local authority must redetermine the excluding school’s budget share in accordance with paragraph (10). e(10) Th excluding school’s budget share must be reduced by Jx K /( 52) where— (a) J is the amount of the pupil premium allocated to the excluding school for the funding period in respect of that child; and (b) K is the number of complete weeks remaining in the funding period calculated from the relevant date, except that where the permanent exclusion takes effect on or after 1st April in a school year at the end of which pupils of the same age, or age group, as the pupil in question normally leave that school before being admitted to another school with a different pupil age range, K is the number of complete weeks remaining in that school year calculated from the relevant date. (11) Where a pupil in respect of whom a pupil premium is payable has been permanently excluded from a school maintained by a local authority and admitted to another school maintained by a local authority other than a pupil referral unit (“the admitting school”) in the funding period, the authority must redetermine the budget share of the admitting school in accordance with paragraph (12). (12) The admitting school’s budget share must be increased by an amount which may not be less than Lx NM )/( where— (a) L is the amount by which the authority reduced the budget share of the excluding school or would have reduced the budget share had that school been maintained by the authority; (b) M is the number of complete weeks remaining in the funding period during which the pupil is a registered pupil at the admitting school; and (c) N is the number of complete weeks remaining in the funding period calculated from the relevant date. (13) Where a permanently excluded pupil in respect of whom a pupil premium is payable is subsequently reinstated by the governing body of the school, the school’s budget share must be increased by an amount which is no less than Ox QP )/( where— (a) O is the amount by which the authority reduced the school’s budget share under paragraph (10); (b) P is the number of complete weeks remaining in the funding period during which the pupil is reinstated; and (c) Q is the number of complete weeks remaining in the funding period calculated from the relevant date.

17 (14) Paragraphs (9) and (10) also apply where a pupil in respect of whom a pupil premium is payable leaves a maintained school other than a pupil referral unit for reasons other than permanent exclusion and is receiving education funded by a local authority other than at a school which is maintained by that authority. (15) For the purposes of this regulation— (a) “the relevant date” is the sixth school day following the date on which the pupil has been permanently excluded; and (b) “a financial adjustment order” means an order for the adjustment of a school’s budget share made under regulation 25(5)(b) of The School Discipline (Pupil Exclusions and Reviews) (England) Regulations(a) in respect of the exclusion of the pupil from the excluding school.

Correction of errors and changes in non-domestic rates 24.—(1) A local authority may at any time during the funding period redetermine a school’s budget share or the amount allocated to a relevant early years provider for the funding period or any earlier funding period in order to correct an error in a determination or redetermination under these or any previous Regulations, whether arising from a mistake as to the number of registered pupils at the school or otherwise, and any such redetermination will take effect in the following funding period. (2) A local authority may redetermine a school’s budget share to take into account any changes in that school’s non-domestic rate liability in relation to the funding period or any earlier funding period. (3) In so far as any redetermination under paragraph (1) would require the amount that would otherwise have been the budget share of a school to be reduced, it may not be reduced to a figure which is lower than that which could have been allocated to that school under the regulations in force during the funding period in which the error occurred.

Alternative arrangements approved by Secretary of State 25.—(1) Subject to paragraph (2), on application by a local authority, the Secretary of State may authorise the authority to— (a) disregard the limits referred to in paragraph 5 of Schedule 2 when deducting any expenditure referred to in regulation 8(3) (Central Services expenditure), (b) deduct any expenditure referred to in regulation 8(7) (expenditure falling outside of Schedule 2), (c) determine or redetermine budget shares of schools maintained by them, (d) determine or redetermine amounts to be allocated in respect of nursery classes in schools maintained by them, (e) determine or redetermine amounts to be allocated to relevant early years providers in their area, (f) include additional factors or criteria in their formula under regulation 10(1) (formula for determining budget shares) where the nature of a school’s premises exceptionally gives rise to significant additional cost, (g) include additional factors or criteria that the authority propose to include in their formula under regulation 10(3) (early years single funding formula), (h) vary the amount by which a school’s redetermined adjusted budget shall be reduced for the purpose of determining the guaranteed level of funding in paragraph 1 of Schedule 4, (i) disregard regulation 13 (pupil numbers), or

(a) S.I. 2012/1033.

18 (j) disregard regulation 14 (places) in the determination and redetermination of budget shares for pupil referral units. (2) The Secretary of State may authorise the matters referred to in paragraph (1) to such extent as the Secretary of State may specify in accordance with arrangements approved in place of the arrangements provided for by these Regulations.

PART 4 Schemes

Required content of schemes 26. A scheme prepared by a local authority under section 48(1) of the 1998 Act must deal with the matters connected with the financing of schools maintained by the authority set out in Schedule 5.

Approval by the schools forum or the Secretary of State of proposals to revise schemes 27.—(1) Where a local authority submit a copy of their proposals to revise their scheme to their schools forum for approval pursuant to paragraph 2A(3)(b) of Schedule 14 to the 1998 Act, the members of the schools forum who represent schools maintained by the authority may— (a) approve any such proposals; (b) approve any such proposals subject to modifications; or (c) refuse to approve any such proposals. (2) Where the schools forum approves the proposals to revise the scheme, it may specify the date upon which the revised scheme is to come into force. (3) Where— (a) the schools forum refuses to approve proposals submitted under paragraph 2A(3)(b) of Schedule 14 to the 1998 Act, or approves any such proposals subject to modifications which are not acceptable to the local authority; or (b) the local authority are not required to establish a schools forum for their area, the authority may apply to the Secretary of State for approval of such proposals. (4) The Secretary of State may— (a) approve any such proposals; (b) approve any such proposals subject to modifications; or (c) refuse to approve any such proposals. (5) When approving proposals to revise the scheme, the Secretary of State may specify the date upon which the revised scheme is to come into force. (6) No revised scheme is to come into force unless approved by the schools forum or the Secretary of State in accordance with this regulation.

Publication of schemes 28.—(1) A local authority— (a) must publish their scheme on a website which is accessible to the general public; and (b) may publish it elsewhere, in such manner as they see fit. (2) Whenever a local authority revise the whole or part of their scheme they must publish the scheme as revised on a website which is accessible to the general public by the date that the revisions are due to come into force, together with a statement that the revised scheme comes into force on that date.

David Laws Minister of State 27th November 2012 Department for Education

SCHEDULE 1 Regulation 4 CLASSES OR DESCRIPTIONS OF PLANNED EXPENDITURE PRESCRIBED FOR THE PURPOSES OF THE NON-SCHOOLS EDUCATION BUDGET OF A LOCAL AUTHORITY

Special educational provision 1. Expenditure on services provided by educational psychologists. 2. Expenditure in connection with the authority’s functions under sections 321 to 331 of the 1996 Act (which functions relate to the identification and assessment of children with special educational needs and the making, maintaining and reviewing of statements for such children). 3. Expenditure on monitoring the provision for pupils in schools (whether or not maintained by the authority) for the purposes of disseminating good practice in relation to, and improving the quality of educational provision for, children with special educational needs. 4. Expenditure on collaboration with other statutory and voluntary bodies to provide support for children with special educational needs. 5. Expenditure in connection with— (a) the provision of parent partnership services (that is services provided under section 332A of the 1996 Act to give advice and information to parents of children with special educational needs), or other guidance and information to such parents which, in relation to pupils at a school maintained by the authority, are in addition to the information usually provided by the governing bodies of such schools; or (b) arrangements made by the authority with a view to avoiding or resolving disagreements with the parents of children with special educational needs. 6. Expenditure on carrying out the authority’s child protection functions under the Children Act 1989, functions under section 175 of the 2002 Act, and other functions relating to child protection. 7. Expenditure incurred in entering into, or subsequently incurred pursuant to, an arrangement under section 31 of the Health Act 1999(a) or regulations made under section 75 of the National Health Service Act 2006(b) (arrangements between NHS bodies and local authorities). 8. Expenditure on the provision of special medical support for individual pupils in so far as such expenditure is not met by a Primary Care Trust, National Health Service Trust, NHS foundation trust or Local Health Board.

(a) 1999 c.8. Section 31 was repealed by section 6 of, and Schedule 4 to, the National Health Service (Consequential Provisions) Act 2006 (c.43) but section 4 of, and paragraph 1 of Schedule 2 to, that Act contains a savings provision which means that arrangements made under section 31 of the 1999 Act continue to have effect as if made under section 75 of the National Health Service Act 2006. (b) 2006 c. 41.

20 School improvement 9. Expenditure incurred by a local authority in respect of action to support the improvement of standards in the authority’s schools, in particular expenditure incurred in connection with functions under the following sections of the 2006 Act— (a) section 60 (performance standards and safety warning notice), (b) section 60A (teachers’ pay and conditions warning notice), (c) section 63 (power of local authority to require governing bodies of schools eligible for intervention to enter into arrangements), (d) section 64 (power of local authority to appoint additional governors), (e) section 65 (power of local authority to provide for governing bodies to consist of interim executive members) and Schedule 6; and (f) section 66 (power of local authority to suspend right to delegated budget).

Access to education 10. Expenditure in relation to the following matters— (a) management of the authority’s capital programme including preparation and review of an asset management plan and negotiation and management of private finance transactions; (b) planning and managing the supply of school places, including the authority’s functions in relation to the establishment, alteration or discontinuance of schools pursuant to Part 2 of, and Schedule 2 to, the 2006 Act; (c) the authority’s functions in relation to the exclusion of pupils from schools, excluding any provision of education to excluded pupils, but including advice to the parents of such pupils; (d) the authority’s functions under sections 508A, 508E and 509 (school travel) of the 1996 Act; and (e) the authority’s functions under sections 510 and 514 of the 1996 Act (provision and administration of clothing grants and boarding grants), and pursuant to regulations made under section 518(2) of the 1996 Act. 11. Expenditure arising from the authority’s functions under Chapter 2 of Part 6 of the 1996 Act (school attendance). 12. Expenditure on the provision of support for students under regulations made under section 1(1) of the Education Act 1962 and under section 22 of the Teaching and Higher Education Act 1998. 13. Expenditure on discretionary grants paid under section 1(6) or 2 of the Education Act 1962(a) (awards for designated and other courses). 14. Expenditure on the payment of 16-19 Bursaries(b). 15. Expenditure on the provision of tuition in music, or on other activities which provide opportunities for pupils to enhance their experience of music. 16. Expenditure incurred in enabling pupils to enhance their experience of the visual, creative and performing arts other than music.

(a) 1962 c.12. The 1962 Act was repealed by the Teaching and Higher Education Act 1998 (c.30) with transitional savings provisions. The repeal does not affect the continued operation of the provisions that relate to the making of subordinate legislation. Relevant regulations made under section 1(1) of the 1962 Act are the Education (Mandatory Awards) Regulations 2003 (S.I. 2003/1994), as amended by S.I. 2004/1038 and 2004/1792). These Regulations describe the designated courses and methodology for calculating grants. (b) A 16-19 Bursary is financial assistance under section 14 of the 2002 Act paid to, or in respect of, a person who is aged 16 to 19 in connection with undertaking any course or training.

21 17. Expenditure on outdoor education centres, but not including centres wholly or mainly for the provision of organised games, swimming or athletics.

Additional education and training for children, young persons and adults 18. Expenditure on the provision of education and training and of organised leisure time occupation, and other provision under sections 15ZA and 15ZC of the 1996 Act. 19. Expenditure on the provision by the local authority under sections 507A and 507B of the 1996 Act of recreation, social and physical training, educational leisure-time activities and recreational leisure-time activities.

Strategic management 20. Expenditure on education functions related to— (a) functions of the director of children’s services and the personal staff of the director; (b) planning for the education service as a whole; (c) functions of the authority under Part I of the Local Government Act 1999(a) (Best Value) and the provision of advice to assist governing bodies in procuring goods and services with a view to securing continuous improvement in the way the functions of those governing bodies are exercised, having regard to a combination of economy, efficiency and effectiveness; (d) revenue budget preparation, preparation of information on income and expenditure relating to education for incorporation into the authority’s annual statement of accounts, and the external audit of grant claims and returns relating to education; (e) administration of grants to the authority (including preparation of applications), functions imposed by or under Chapter IV of Part 2 of the 1998 Act (financing of maintained schools) and, where it is the authority’s duty to do so, ensuring payments are made in respect of taxation, national insurance and superannuation contributions; (f) authorisation and monitoring of— (i) expenditure which is not met from schools’ budget shares, and (ii) expenditure in respect of schools which do not have delegated budgets, and all related financial administration; (g) the formulation and review of the methods of allocation of resources to schools and other bodies; (h) the authority’s monitoring of compliance with the requirements of their financial scheme prepared under section 48 of the 1998 Act, and any other requirements in relation to the provision of community facilities by governing bodies under section 27 of the 2002 Act; (i) internal audit and other tasks necessary for the discharge of the authority’s chief finance officer’s responsibilities under section 151 of the Local Government Act 1972(b); (j) the authority’s functions under regulations made under section 44 of the 2002 Act(c); (k) recruitment, training, continuing professional development, performance management and personnel management of staff who are funded by expenditure not met from schools’ budget shares and who are paid for services carried out in relation to those of the authority’s functions and services which are referred to in other paragraphs of this Schedule;

(a) 1999 c. 27. (b) 1972 c. 70. (c) The Consistent Financial Reporting (England) Regulations 2012 (S.I. 2012/674).

22 (l) investigations which the authority carry out of employees, or potential employees, of the authority, or of governing bodies of schools, or of persons otherwise engaged, or to be engaged, with or without remuneration to work at or for schools; (m) functions of the authority in relation to local government superannuation which it is not reasonably practicable for another person to carry out, and functions of the authority in relation to the administration of teachers’ pensions; (n) retrospective membership of pension schemes and retrospective elections made in respect of pensions where it would not be appropriate to expect the governing body of a school to meet the cost from the school’s budget share; (o) advice, in accordance with the authority’s statutory functions, to governing bodies in relation to staff paid, or to be paid, to work at a school, and advice in relation to the management of all such staff collectively at any individual school, including in particular advice with reference to alterations in remuneration, conditions of service and the collective composition and organisation of such staff; (p) determination of conditions of service for non-teaching staff, and advice to schools on the grading of such staff; (q) the authority’s functions regarding the appointment or dismissal of employees; (r) consultation and functions preparatory to consultation with or by governing bodies, pupils and persons employed at schools or their representatives, or with other interested bodies; (s) compliance with the authority’s duties under the Health and Safety at Work etc Act 1974(a) and the relevant statutory provisions as defined in section 53(1) of that Act, in so far as compliance cannot reasonably be achieved through tasks delegated to the governing bodies of schools; but including expenditure incurred by the authority in monitoring the performance of such tasks by governing bodies and, where necessary, the giving of advice to them; (t) the investigation and resolution of complaints; (u) legal services relating to the statutory functions of the authority; (v) the preparation and review of plans involving collaboration with other local authority services or with public or voluntary bodies; (w) provision of information to or at the request of the Crown and the provision of other information which the authority are under a duty to make available; (x) the authority’s functions pursuant to regulations made under section 12 of the 2002 Act (supervising authorities of companies formed by governing bodies); and (y) the authority’s functions under the discrimination provisions of the Equality Act 2010(b) in so far as compliance cannot reasonably be achieved through tasks delegated to the governing bodies of schools; but including expenditure incurred by the authority in monitoring the performance of such tasks by governing bodies and, where necessary, the giving of advice to them.

Other functions 21. Expenditure in pursuance of a binding agreement, where the other party is a local authority, or the other parties include one or more local authorities, in relation to the operation of a facility provided partly, but not solely, for the use of schools. 22. Expenditure on establishing and maintaining those electronic computer systems, including data storage, which are intended primarily to maintain linkage between local authorities and their schools.

(a) 1974 c.37. (b) 2010 c.15.

23 23. Expenditure on monitoring National Curriculum assessment arrangements required by orders made under section 87 of the 2002 Act. 24. Expenditure in connection with the authority’s functions in relation to the standing advisory council on religious education constituted by the authority under section 390 of the 1996 Act(a) or in the reconsideration and preparation of an agreed syllabus of religious education in accordance with Schedule 31 to the 1996 Act. 25. Expenditure in respect of the dismissal or premature retirement of, or for the purpose of securing the resignation of, or in respect of acts of discrimination against, any person except to the extent that these costs are chargeable to schools’ budget shares or fall within paragraph 4(b) of Schedule 2. 26. Expenditure in respect of a teacher’s emoluments under section 19(9) of the Teaching and Higher Education Act 1998. 27. Expenditure on the appointment of governors, the making of instruments of government, the payment of expenses to which governors are entitled and which are not payable from a school’s budget share, and the provision of information to governors. 28. Expenditure on making pension payments, other than in respect of staff employed in schools. 29. Expenditure on insurance, other than for liability arising in connection with schools or school premises. 30. Expenditure in connection with powers and duties performed under Part 2 of the Children and Young Persons Act 1933(b) (enforcement of, and power to make byelaws in relation to, restrictions on the employment of children).

SCHEDULE 2 Regulations 6 and 8 CLASSES OR DESCRIPTIONS OF PLANNED EXPENDITURE PRESCRIBED FOR THE PURPOSES OF THE SCHOOLS BUDGET OF A LOCAL AUTHORITY WHICH MAY BE DEDUCTED FROM IT TO DETERMINE THE INDIVIDUAL SCHOOLS BUDGET

PART 1 Central Services 1. Expenditure on the operation of the system of admissions of pupils to schools (including expenditure incurred in carrying out consultations under section 88C(2) of the 1998 Act(c)) and in relation to appeals. 2. Expenditure in connection with the authority’s functions under section 47A of the 1998 Act (establishment and maintenance of, and consultation with, schools forums). 3. CERA incurred for purposes not falling within any other paragraph of this Schedule or Schedule 1. 4. Expenditure on— (a) prudential borrowing;

(a) Section 390 was amended by section 140(1) of, and paragraph 93 of Schedule 20 to, the 1998 Act. (b) 1933 c.12. (c) Section 88C(2) was amended by section 51 of, and Schedule 4 to, the 2002 Act and sections 45 and 56 of the 2006 Act.

24 (b) termination of employment costs, where the schools forum have approved the charging of these costs to the schools budget for the funding period in which they were incurred and the revenue savings achieved by the termination of employment to which they relate are equal to or greater than the costs incurred; (c) combined services where the expenditure relates to classes or descriptions of expenditure falling outside those set out in this Schedule; (d) special educational needs transport costs; and (e) purposes not falling within any other paragraph of this Schedule, provided that the expenditure does not amount in total to more than 0.1% of the authority’s schools budget; where the expenditure has been approved by the schools forum or the Secretary of State in a previous funding period. 5. Any deductions under each of paragraphs 1 to 4 must not exceed the amount deducted under each of paragraphs 13, 31, 33, 34, 36(a), 36(b), 36(c) and 36(e) of Schedule 2 to the 2012 Regulations for the previous funding period.

PART 2 Central Schools Expenditure 6. Expenditure on pay arrears due to staff employed at maintained schools and other staff whose salaries are met from the schools budget, and expenditure on the costs of financing payment of such arrears, where the expenditure is not chargeable to a maintained school’s budget share under the terms of the local authority’s scheme. 7. Expenditure pursuant to section 18 of the 1996 Act(a) in making any grant or other payment in respect of fees or expenses (of whatever nature) which are payable in connection with the attendance of pupils at a school which is not maintained by any local authority. 8. Expenditure due to a significant growth in pupil numbers as a result of the local authority’s duty under section 13(1) of the 1996 Act to secure that efficient primary education and secondary education are available to meet the needs of the population of their area. 9. Expenditure to be incurred prior to the opening of new schools to fund the appointment of staff and to enable the purchase of any goods and services necessary in order to admit pupils. 10. Expenditure in order to make provision for extra classes in order to comply with the School Admissions (Infant Class Sizes) (England) Regulations 2012(b). 11. Expenditure on the purchase of CRC allowances for schools. 12. Remission of boarding fees payable in connection with the attendance of pupils at maintained schools and Academies.

PART 3 Central Early Years Expenditure 13. Expenditure on early years provision, excluding expenditure— (a) on such provision in a maintained school; and (b) on relevant early years provision. 14. Expenditure on determining the eligibility—

(a) Section 18 was amended by article 5(1) of, and paragraph 7 of Schedule 2 to, S.I. 2010/1158. (b) S.I. 2012/10.

25 (a) of a pupil for free school meals where that pupil is being provided with early years provision; or (b) of a child for prescribed early years provision.

PART 4 Pupils With High Needs 15. Expenditure in respect of pupils with special educational needs at primary and secondary schools and in relevant early years providers, excluding expenditure— (a) in respect of pupils in places which the authority have reserved for children with special educational needs; or (b) where it would be reasonable to expect such expenditure to be met from a school’s budget share, the amount allocated to a relevant early years provider or the general annual grant paid to an Academy by the Secretary of State. 16. Expenditure in respect of pupils— (a) with special educational needs at special schools and special Academies; or (b) in places at primary or secondary schools or Academies which the authority have reserved for children with special educational needs, where the expenditure cannot be met from the sum referred to in regulation 14(2). 17. Expenditure in respect of persons provided with further education who are— (a) aged under 19 and have learning difficulties, or (b) aged 19 or over but under 25 and are subject to learning difficulty assessment. 18. Expenditure on support services for pupils who have a statement of special educational needs and for pupils with special educational needs who do not have such a statement. 19. Expenditure for the purposes of encouraging— (a) collaboration between special schools and primary and secondary schools to enable children with special educational needs to engage in activities at primary and secondary schools; (b) the education of children with special educational needs at primary and secondary schools; and (c) the engagement of children with special educational needs at primary and secondary schools in activities at the school with children who do not have special educational needs in cases where the local authority consider it would be unreasonable for such expenditure to be met from a school’s budget share. 20. Expenditure incurred in relation to education otherwise than at school under section 19 of the 1996 Act or in relation to a pupil referral unit, where the expenditure cannot be met from the sum referred to in regulation 14(5). 21. Expenditure on the payment of fees in respect of pupils with special educational needs— (a) at independent schools or at special schools which are not maintained by a local authority under section 348 of the 1996 Act; or (b) at an institution outside England and Wales under section 320 of the 1996 Act. 22. Expenditure on hospital education services, aside from expenditure on hospital education places referred to in regulation 14(3) and (6). 23. Expenditure on special schools and pupil referral units in financial difficulty.

26 24. Expenditure on costs in connection with private finance initiatives and the programme known as “Building Schools for the Future” at special schools.

PART 5 Items That May Be Removed From Maintained Schools’ Budget Shares 25. Expenditure (other than expenditure referred to in Schedule 1 or any other paragraph of this Schedule) incurred on services relating to the education of children with behavioural difficulties, and on other activities for the purpose of avoiding the exclusion of pupils from schools. 26. Expenditure on determining the eligibility of a pupil for free school meals. 27. Expenditure on making payments to, or in providing a temporary replacement for, a woman on maternity leave or a person on adoption leave. 28. Expenditure on making payments to, or in providing a temporary replacement for, any person— (a) carrying out trade union duties or undergoing training under sections 168 and 168A of the Trade Union and Labour Relations (Consolidation) Act 1992(a); (b) taking part in trade union activities under section 170 of the Trade Union and Labour Relations (Consolidation) Act 1992; (c) performing public duties under section 50 of the Employment Rights Act 1996(b); (d) undertaking jury service; (e) who is a safety representative under the Safety Representatives and Safety Committees Regulations 1977(c); (f) who is a representative of employee safety under the Health and Safety (Consultation with Employees) Regulations 1996(d); (g) who is an employee representative for the purposes of Chapter 2 of Part 4 of the Trade Union and Labour Relations (Consolidation) Act 1992, as defined in section 196 of that Act or regulation 13(3) of the Transfer of Undertakings (Protection of Employment) Regulations 2006(e); (h) taking time off for ante-natal care under section 55 of the Employment Rights Act 1996; (i) undertaking duties as a member of the reserve forces as defined in section 1(2) of the Reserve Forces Act 1996(f); (j) suspended from working at a school; or (k) who is appointed a learning representative of a trade union, in order for that person to analyse training requirements or to provide or promote training opportunities, and to carry out consultative or preparatory work in connection with such functions. 29. Expenditure on making payments to, or in providing a temporary replacement for, a person who is seconded on a full-time basis for a period of three months or more other than to a local authority or the governing body of a school. 30. Expenditure on making payments to, or in providing a temporary replacement for, persons who have been continuously absent from work because of illness for 21 days or more.

(a) 1992 c.52. Section 168A was inserted by section 43 of the Employment Act 2002 (c.22). (b) 1996 c.18. (c) S.I. 1977/500, amended by section 1 of the Employment Rights (Dispute Resolution) Act 1998 (c.8) and S.I. 1996/1513, 1999/860, 1999/2024, 1999/3242, 2005/1541, 2006/594 and 2008/960. (d) S.I. 1996/1513, amended by section 1 of the Employment Rights (Dispute Resolution) Act 1998 (c.8) and S.I. 1999/3242 and 2005/1541. (e) S.I. 2006/246, amended by S.I. 2010/93. (f) 1996 c.14.

27 31. Expenditure on insurance in respect of liability arising in connection with schools and school premises. 32. Expenditure on services to schools provided by museums and galleries. 33. Expenditure on library services. 34. Expenditure on licence fees or subscriptions paid on behalf of schools. 35. Expenditure on the schools’ specific contingency. 36. Expenditure for the purposes of— (a) improving the performance of under-performing pupils from minority ethnic groups; or (b) meeting the specific needs of bilingual pupils.

SCHEDULE 3 Regulation 18 ADDITIONAL REQUIREMENTS, OR FACTORS OR CRITERIA WHICH MAY BE TAKEN INTO ACCOUNT, IN A LOCAL AUTHORITY’S FORMULA UNDER REGULATION 18

PART 1 Applicable only to budget shares for maintained schools 1. A single sum of an equal amount to be given to each school of up to £200,000 per school. 2. Prior attainment based on the number of pupils in school years 1 to 4, who achieved either— (a) fewer than 78 points; or (b) fewer than 73 points, on the current Early Years Foundation Stage Profile. 3. Prior attainment based on the number of pupils at key stages 3 and 4 who achieved level 3 or lower in both English and Maths at key stage 2. 4. A single per pupil amount for each pupil, based on the number of pupils in school years 1 and 2 and at key stage 2 for whom English is not their first language, where either— (a) the pupil has been attending a school or schools in England since 7th October 2010; (b) the pupil has been attending a school or schools in England since 6th October 2011; or (c) the pupil has been attending a school or schools in England since 4th October 2012. 5. A single per pupil amount for each pupil, based on the number of pupils at key stages 3 and 4 for whom English is not their first language, where either— (a) the pupil has been attending a school or schools in England since 7th October 2010; (b) the pupil has been attending a school or schools in England since 6th October 2011; or (c) the pupil has been attending a school or schools in England since 4th October 2012. 6. A single per pupil amount in respect of pupil mobility, based on the number of pupils at key stages 1 and 2 who joined the school— (a) in the previous three academic years at any time other than August or September, excluding pupils who joined the school in the nursery class, if the school has such a class; and (b) in the reception class at any time other than January, in the previous three academic years.

28 7. A single per pupil amount in respect of pupil mobility, based on the number of pupils at key stages 3 and 4 who joined the school in the last three academic years at any time other than August or September. 8. A single per pupil amount, based on the number of pupils who on 31st March 2012 were either— (a) looked after children and were attending a school in the local authority area; (b) children who had been looked after for six months or more and were attending a school in the local authority area; or (c) children who had been looked after for twelve months or more and were attending a school in the local authority area. 9. Funding for schools with split sites, where the funding must be in accordance with criteria published by the authority. 10. Non-domestic rates payable in respect of the premises of each school (including actual or estimated cost). 11. Payments in relation to a private finance initiative (including actual or estimated cost). 12. Differential salaries of teachers at schools in the county councils of Buckinghamshire, Essex, Hertfordshire, Kent or West Sussex due to the schools being in different London salary weighting areas.

PART 2 Applicable only to budget shares for, and amounts to be allocated to, providers of prescribed early years provision 13. Incidence of looked after children. 14. Prior attainment of pupils entering a school or relevant early years provider. 15. Pupils and children for whom English is not their first language. 16. A single sum for each school and relevant early years provider which may vary according to the type of provider. 17. Funding for schools and relevant early years providers with split sites, where the funding must be in accordance with criteria published by the authority. 18. Non-domestic rates payable in respect of the premises of each school or relevant early years provider (including actual or estimated cost). 19. Payments in relation to a private finance initiative (including actual or estimated cost). 20. Differential salaries of teachers at schools in the county councils of Buckinghamshire, Essex, Hertfordshire, Kent or West Sussex due to the schools being in different London salary weighting areas. 21. The need to improve the quality of provision by particular providers or types of provider. 22. The degree of flexibility in the hours of attendance that a provider makes available. 23. The need to secure or sustain a sufficiency of prescribed early years provision within the authority’s area or any sub-area within that area; and in this paragraph “sub-area” means— (a) an electoral division or ward of the authority; or (b) such other appropriate geographical division into which the authority have notionally divided their area.

29 SCHEDULE 4 Regulation 19 MINIMUM FUNDING GUARANTEE 1. In this Schedule— (a) references to the number of pupils exclude those funded by a sixth form grant and those in places which the local authority have reserved for children with special educational needs; (b) the “relevant number” of pupils for the previous funding period is the number of pupils at the school on 6th October 2011; (c) the “relevant number” of pupils for the funding period is the number of pupils at the school on 4th October 2012; (d) references to a redetermined adjusted budget share for the previous funding period must be reduced by the following— (i) any amount included pursuant to regulation 20 (sixth form funding) of the 2012 Regulations, (ii) any amount allocated to the school pursuant to Schedule 3 of the 2012 Regulations where such amount has been deducted from the schools budget under Part 4 (Pupils With High Needs) of Schedule 2, (iii) any amount the local authority estimates the school would have been allocated for places the authority reserves for children with special educational needs in the previous funding period had regulation 14(2) applied to the previous funding period, (iv) any amount allocated to the school pursuant to regulation 9(3)(b) (nursery classes) of the 2012 Regulations, (v) any amount included in respect of paragraph 8 (rates) of Schedule 3 of the 2012 Regulations, and (vi) any amount allocated to the school pursuant to paragraph 1 (single sum) of Schedule 3. (e) references to a redetermined adjusted budget share for the funding period include the effect of any alternative arrangements approved by the Secretary of State under regulation 25, but are reduced by the following— (i) any amount included pursuant to regulation 20 (sixth form funding), (ii) any amount allocated under regulation 14(2) (places in special schools and places reserved for children with special educational needs), (iii) any amount included in respect of paragraph 10 (rates) of Schedule 3, (iv) any amount allocated to the school pursuant to paragraph 1 (single sum) of Schedule 3, (v) any amounts allocated pursuant to regulation 10(1) (formula for determining budget shares) which would have been within a class or description of the expenditure listed in Schedule 2 to the 2012 Regulations that the authority deducted in the previous funding period, and (vi) any amount allocated to the school under regulation 10(3) (early years single funding formula); (f) for the purposes of this Schedule— (i) where a school opened during the previous funding period, its redetermined adjusted budget share for the previous funding period is the amount it would have been had the school opened on 1st April 2012, (ii) where a school opens during the funding period, its redetermined adjusted budget share for the funding period is the amount it would have been had the school opened on 1st April 2013,

30 adjusted in accordance with sub-paragraph (d) or (e), whichever is applicable. 2. Where BA )/( is less than DC )/( then the guaranteed funding level is DC )/( xB where— A is the redetermined adjusted budget share for the funding period, B is the relevant number of pupils in the funding period, C is the redetermined adjusted budget share for the previous funding period multiplied by 0.985, and D is the number of relevant pupils in the previous funding period. 3. Where a new school opens during the funding period and is a replacement for two or more schools being discontinued during the funding period its guaranteed funding level must be calculated in accordance with paragraph 2, subject to paragraph 4. 4. In calculating the guaranteed level of funding under paragraph 3 the relevant number of pupils in the previous funding period under paragraph 1(b) is the sum of the relevant number of pupils in the discontinued schools on 6th October 2011.

SCHEDULE 5 Regulation 26 CONTENTS OF SCHEMES 1. The carrying forward from one funding period to another of surpluses and deficits arising in relation to schools’ budget shares. 2. Amounts which may be charged against schools’ budget shares. 3. Amounts received by schools which may be retained by their governing bodies and the purposes for which such amounts may be used. e4. Th imposition, by or under the scheme, of conditions which must be complied with by schools in relation to the management of their delegated budgets and of sums made available to governing bodies by the authority which do not form part of delegated budgets, including conditions prescribing financial controls and procedures. 5. Terms on which services and facilities are provided by the authority for schools maintained by them. 6. The payment of interest by or to the authority. 7. The times at which amounts equal in total to the school’s budget share are to be made available to governing bodies and the proportion of the budget share to be made available at each such time. 8. The virement between budget heads within the delegated budget. 9. Circumstances in which a local authority may delegate to the governing body the power to spend any part of the authority’s non-schools education budget or schools budget in addition to those set out in section 49(4)(a) to (c) of the 1998 Act(a). 10. The use of delegated budgets and of sums made available to a governing body by the local authority which do not form part of delegated budgets. 11. Borrowing by governing bodies. 12. The banking arrangements that may be made by governing bodies.

(a) Section 49(4) was amended by section 215 of, and paragraph 100 of Schedule 21 to, the 2002 Act.

31 13. A statement as to the personal liability of governors in respect of schools’ budget shares having regard to section 50(7) of the 1998 Act. 14. A statement as to the allowances payable to governors of a school which does not have a delegated budget in accordance with the scheme made by the authority for the purposes of section 519 of the 1996 Act(a). 15. The keeping of a register of any business interests of the governors and the head teacher. 16. The provision of information by and to the governing body. 17. The maintenance of inventories of assets. 18. Plans of a governing body’s expenditure. 19. A statement as to the taxation of sums paid or received by a governing body. 20. Insurance. 21. The use of delegated budgets by governing bodies so as to satisfy the authority’s duties imposed by or under the Health and Safety at Work etc Act 1974. 22. The provision of legal advice to a governing body. 23. Funding for child protection issues. 24. How complaints by persons working at a school or by school governors about financial management or financial propriety at the school will be dealt with and to whom such complaints should be made. 25. Expenditure incurred by a governing body in the exercise of the power conferred by section 27 of the 2002 Act.

EXPLANATORY NOTE (This note is not part of the Regulations) These Regulations make provision for the financial arrangements of local authorities in relation to the funding of maintained schools and providers of prescribed early years provision in England, for the financial year 2013-2014. The Financing of Maintained Schools (England) Regulations 2004, the School Finance (England) Regulations 2011 and the School Finance (Amendment) (England) Regulations 2011 are revoked. The School Finance (England) Regulations 2012 remain in force. These Regulations define the non-schools education budget (regulation 4 and Schedule 1), the schools budget (regulation 6 and Schedule 2), central expenditure and the individual schools budget (regulation 8 and Schedule 2). They require local authorities to determine budget shares for schools maintained by them and amounts to be allocated in respect of nursery classes in schools maintained by them and relevant early years providers in their area in accordance with the appropriate formulae (regulations 10 and 11). They impose a minimum funding guarantee (regulation 19 and Schedule 4) and requirements in relation to local authorities’ schemes (regulation 26 and Schedule 5). No impact assessment has been prepared for these Regulations as they have minimal impact on businesses, civil society organisations and the public sector.

(a) Section 519 was amended by section 140 of, and paragraph 139 of Schedule 2 to, the 1998 Act.

SUMMARY OF THE SCHOOL AND EARLY YEARS FINANCE (ENGLAND) REGULATIONS 2012

Regulation 1 includes various definitions and interpretation of terms used elsewhere in the regulations and schedules. There are some changes and new definitions compared to previous regulations. In particular:

• The definition of contingencies, which can be de-delegated for maintained primary and secondary schools is restricted to expenditure which it would be unreasonable to expect governing bodies to meet from their budget share. This may include schools in financial difficulty; deficits of closing schools; new, amalgamating or closing schools or other unforeseen expenditure.

• Hospital education is defined as a form of provision, normally on a temporary basis, for certain children with medical needs. In the case of:

(a) children who require alternative provision for other reasons, and (b) children and young people with special educational needs, learning difficulties or disabilities,

the local authority and/or school (if the child is on roll) decides the best place for an individual child or young person to receive its education and commissions the education required. For those with high level needs the local authority or school contributes towards the cost from funds set aside by the authority under paragraphs 14, 15 and 19 of schedule 2, part 4 (top-up funding). The term “hospital education” is intended to apply only where the local authority and/or school responsible for the pupil has their discretion to decide on and commission the education of the individual fettered by a health care decision by a medical practitioner (hospital doctor, psychiatrist, etc.). Hospital education is relevant only when that health care decision determines where the child or young person receives their health care, and that they cannot attend the mainstream or specialist setting that would normally provide their education. Hospital education is usually provided in a special school (often known as a hospital school), in a pupil referral unit (PRU), or by means of a centrally funded service under paragraph 22 of schedule 2.

• References to governing bodies now includes management committees of PRUs, which will have delegated budgets from April 2013.

Regulation 3 amends the 2012 school forum regulations to provide for maintained primary or secondary school members of schools forums to approve de-delegation proposals for their phase for maintained schools only.

Regulation 5 brings forward from 31st March to 15th March the date by which local authorities must make an initial determination of their schools budget and notify this to their maintained schools.

Regulation 6 extends the definition of the schools budget to include expenditure on young people in further education aged under 19 with learning difficulties, and those aged 19 to 25 subject to learning difficulty assessment.

Regulation 8(1) brings forward from 31st March to 15th March the date by which local authorities must have decided on their levels of central schools budget expenditure.

Regulation 8(2) specifies that expenditure on certain central services can only continue if the expenditure is already committed as a result of decisions made in a previous funding period.

Regulation 8(3) specifies that planned expenditure on certain central services cannot exceed the planned expenditure on that line in the previous year, unless the Secretary of State agrees on application by the local authority.

Regulation 8(4) specifies that the schools forum must approve the criteria on which any funding retained for pupil growth is to be allocated

Regulation 8(5) specifies that schools forum approval is required for central schools and early years block items.

Regulation 8(7) enables local authorities to apply to the Secretary of State to approve other central schools budget expenditure. This would only be considered in exceptional situations – for example, where an authority was using funding from outside the DSG for particular purposes such as universal free meals.

Regulation 9 requires local authorities to consult all schools about changes to their school funding formula. The same applies to the early years formula, where there must be consultation with all providers.

Regulation 9(5) requires local authorities to consult their schools forum before any allocations are made from the growth fund.

Regulation 11 requires budgets to be determined by 15th March for maintained schools and pupil referral units, and by 31st March for budgets issued under the early years formula. These must then be notified to the governing bodies by 31st March.

Regulation 11(2) formalises the requirement for local authorities to identify, within a mainstream school’s budget share, a notional special educational needs budget. We expect the factors listed in regulation 15, and paragraphs 2 and 3 of schedule 3 to be most relevant to the calculation of this notional budget but other factors can also be used.

Regulation 11(3) provides for de-delegation for certain budgets in maintained primary and secondary schools.

Regulation 12 sets out the powers of the schools forum and the Secretary of State to authorise central schools and early years block expenditure and de- delegation.

Regulation 13 sets out the simplified requirements on the use of pupil numbers in the school formula, including the ability to use an October to January uplift for reception pupil numbers.

Regulation 14 sets out how authorities must calculate the budget shares – . for their maintained special schools, and special units and resourced provision in mainstream schools (base funding of £10,000 per place); and . for their maintained pupil referral units (PRUs) (base funding of £8,000 per place).

In both special schools and PRUs hospital education places are to be funded at the same rate per place as applied in 2012-13.

In special schools some places will count as dedicated sixth form places with effect from August 2013, as their base funding will come through sixth form grant under regulation 20. For the period from April to July 2013 all places should be treated as not being funded through sixth form grant.

There has been dialogue over the period from July to November 2012 about the number of places that local authorities wished to fund in their special schools and PRUs, and the numbers as confirmed in December should be used as the starting point for Regulation 14. It is however open to local authorities to fund additional places from their high needs block where they believe this is justified.

In the case of hospital education the method of calculating place numbers should be consistently applied between 2012-13 and 2013-14 in determining the per place funding to be included in the budget share. Local authorities should only make changes to the budget if there is clear evidence of a change in provision.

Regulation 15 sets out how the mandatory deprivation factors in the schools and early years formulae may be calculated. For disadvantaged two year olds, there will not be a requirement to have a mandatory deprivation supplement because this is already a targeted entitlement (regulation 15(6)) though authorities may do so.

Regulation 16 sets out the arrangements for funding children through the early years single funding formula. The rules on place based funding are being relaxed to support capacity building for disadvantaged two year olds. Currently, authorities must fund on the basis of participation except for children with SEN or children in need, where they can continue to fund on a place basis. We will extend this place-based approach for two year olds, to support local authorities working with providers to increase capacity in advance of delivering the 20% and 40% entitlements (regulation 16(7)). We expect this to be a time-limited approach to support preparation for the entitlement, and not a permanent approach for funding two year old early education.

Regulation 17 allows differentiation between different types of early years providers.

Regulations 18(1) to 18(3) allow authorities to use factors set out in schedule 3 in their schools and early years formulae.

Regulations 18(4) to 18(6) allow authorities to cap or scale back gains under the new formula using the same comparisons between years as in the Minimum Funding Guarantee (MFG) calculation, and applied consistently to all schools in the authority.

Regulations 19(1) and 19(2) set out the MFG requirements for primary and secondary schools (in conjunction with schedule 4).

Regulation 19(3) sets out the application of the MFG to the early years formula, which applies to base rates.

Regulation 20 enables authorities to include a formula factor for sixth form pupils where they have previously funded them out of the DSG, but they cannot allocate more per pupil than in 2012-13.

Regulation 21 requires authorities to determine budgets for new schools, but only from their opening (any lead-in costs would need to be funded from the growth fund).

Regulation 22 enables authorities to issue a single budget share for federated schools, but if they do so then this must be calculated by combining the budget shares of the individual schools.

Regulation 23 carries forward the existing arrangements for reducing or increasing schools’ budget shares as a result of the movement of permanently excluded pupils to and from a school. The amount of the reduction or increase is the amount attributable to a registered pupil of the same age and personal circumstances as the excluded pupil (regulation 23(2)(a)). Local authorities which have changed their formula to meet the requirements elsewhere in these regulations will need to reassess the pupil-related amount that should be applied in these circumstances. Those factors listed in regulations 13 and 15, and paragraphs 2-8 of schedule 3, part 1, may be relevant. Amounts equivalent to the pupil premium also transfer for eligible pupils, while the excluding school’s budget must also be reduced by the amount of any financial adjustment order.

Regulation 24(1) provides that any redeterminations of budgets due to errors would take effect in the following funding period.

Regulation 25 allows for authorities to apply to the Secretary of State to: • allow increases in, or additional categories of, central expenditure budgets; • include exceptional premises factors in their school formula; • exclude factors from MFG; • vary the basis of the pupil number count; • vary the way in which pupil referral unit places are calculated; • include additional factors in the early years single funding formula.

Regulation 27 sets out that changes to schemes for financing schools must be approved by maintained school members of the schools forum

Schedule 1 sets out what services are in the non-schools education budget; this means they are outside the schools budget and would therefore normally be funded from general local authority resources.

Schedule 2 sets out the services which can be retained centrally within the schools budget and is split into five parts: • Part 1 – central services (where expenditure is restricted to what was planned in 2012-13) • Part 2 – central schools expenditure, which is not restricted. This includes the growth fund to support increases in pupil numbers relating to basic need. The definition now includes start-up costs for new schools after the completion of the capital project and prior to opening; these usually include staffing costs such as those of the headteacher and caretaker and relevant premises and resources costs. We also expect the growth fund to cover post opening costs due to diseconomies as new schools grow to full capacity. We will discuss this on a case by case basis to identify and agree the most appropriate mechanism to meet these. The growth fund does not apply to existing non-recoupment Academies. Part 2 now also includes the carbon reduction commitment. As costs may rise in 2013-14, this will not be restricted to 2012-13 levels. • Part 3 – central early years expenditure • Part 4 – pupils with high needs. o Paragraph 15 covers – . funding held centrally for distribution to mainstream schools and Academies as top-up funding in respect of individual pupils with special educational needs; . funding held centrally for distribution to early years providers; . funding in respect of pupils with special educational needs which can be targeted to particular mainstream schools and Academies, additional to their budget share, where the amount calculated under regulation 11(2) (the notional special educational needs budget) is not sufficient to allow the school to meet these pupils’ needs below the threshold for top-up funding. We have advised authorities to apply consistent principles for the distribution of such funds where they are needed. o Paragraph 16 is funding held centrally for distribution to special schools and Academies, and to special units and resourced provision in mainstream schools and Academies, as top-up funding in respect of pupils with special educational needs. o Paragraph 17 covers top-up funding for students in further education up to the age of 25 who have learning difficulties. Funding for those aged 19-25 is limited to students who are subject to a learning difficulty assessment. o Paragraph 18 allows authorities to retain funds for support services for pupils with special educational needs, whether or not they have statements. Such services include, for example, sensory support and other specialist services. o Paragraph 19 enables an authority to set aside funds for promoting the integration of pupils with special educational needs in mainstream schools. o Paragraph 20 is funding held centrally for distribution to PRUs as top-up funding or for central services in respect of pupils in other alternative provision. This would include, for example, an authority’s home tuition service. Funds for supporting children with behavioural difficulties or to prevent exclusions can also be retained centrally under paragraph 24, but only with the approval of the schools forum as a de-delegated item (see part 5 below). o Paragraph 21 allows authorities to retain funding for fees in respect of the placement of pupils with special educational needs in independent schools, non-maintained special schools and schools outside England and Wales. In 2013-14 non- maintained special schools will receive base funding of £10,000 per place from the Education Funding Agency; independent special schools and schools outside England will not. o Paragraph 22 allows authorities to provide centrally funded hospital education services which are not classed as special schools or PRUs. o Paragraph 23 allows authorities to retain funding to provide support to special schools or PRUs in financial difficulty. This provision is made because these schools cannot de-delegate funding for this purpose under Part 5. o Paragraph 24 allows authorities to retain funding to meet ongoing revenue costs relating to special schools which have been built or refurbished under a Building Schools for the Future (BSF) or other private finance initiative (PFI) project. This is because there is no facility to have a PFI factor for special schools. • Part 5 – items which can be de-delegated for maintained primary and secondary schools. These are allocated in schools’ formula budgets initially but can then be taken out and retained centrally where approved by the relevant schools forum members.

Schedule 3 sets out the formula factors which may be used in the schools and early years formulae.

Schedule 4 sets out the simplified MFG calculation for primary and secondary schools.

Schedule 5 sets out the items which must be included in local authority schemes for financing schools.

Conditions of grant

The School Standards and Framework Act 1998, under which the School Finance Regulations are made, was enacted before the introduction of Academies and of the Dedicated Schools Grant (DSG). Sections 14-16 of the Education Act 2002, under which the DSG is paid, enable the Secretary of State to make the grant on such terms as he considers appropriate, and to enforce such terms.

The DSG covers pupils at most Academies (other than a few mostly early Academies which are not funded by way of the DSG and recoupment), and from 2013-14 will encompass also funding for high needs pupils and students aged 16-24.

So far as Academies are concerned, they will from 2013-14 be funded using the local authority’s formula for the current financial year. Funding for Academies’ actual budget shares is recouped from local authorities, but as the pupils in Academies are taken into account in the initial DSG allocated to authorities, they are contributing to the remaining funding retained for central services. The first three additional grant conditions – (a) to (c) – reflect these considerations.

New condition (a) requires local authorities to maintain a single formula to be used for funding both maintained schools and Academies, while new condition (b) requires them to take account of the circumstances of local Academies as well as maintained schools.

New condition (c) requires local authorities to use centrally retained funding for the benefit of maintained schools and of recoupment Academies on an equivalent basis. The exception is funding that has been de-delegated by maintained schools.

New condition (d) requires local authorities, when they make arrangements for funding children and young people with high needs, to treat various kinds of provision on a fair and equivalent basis. This includes maintained provision, Academies and Free Schools, the further education sector, and non-maintained and independent provision. Authorities must not make placements on the basis of the type of provider (eg whether the provider is a maintained school or in the private sector), but rather on the suitability of the provision and the wishes of the child’s parents or young person, and whether the proposed provision offers value for money.

New condition (e) requires authorities to put minimum protections in place when setting top-up funding rates for maintained special schools or special Academies formerly maintained by the authority. This protection is analogous to the MFG. It takes account of changes in pupil numbers and types of provision between 2012-13 and 2013-14. The condition does not apply formally to special units and resourced provision because of the difficulty of defining their base budgets in 2012-13, but we expect the same principles to be applied. It should be stressed, however, that this condition is a minimum level of protection, and we expect authorities generally to set top-up funding rates at a level that would maintain the budgets of special schools and units close to 2012-13 levels, unless there are planned changes in provision.

New condition (f) requires authorities to maintain placements already in existence at 1 April 2013 by entering into an agreement to provide top-up funding to the relevant institution. It also requires authorities to enter into agreements for top-up funding in respect of pupils placed at later dates

New condition (g) requires payments of top-up funding to be made to providers on a monthly basis unless otherwise agreed with the institution. The purpose of this is to ensure that top-up funding to support pupils is received by the institution in good time, to help with cash flow management.

EXPLANATORY MEMORANDUM TO

THE SCHOOL AND EARLY YEARS FINANCE (ENGLAND) REGULATIONS 2012

2012 No. 2991

1. This explanatory memorandum has been prepared by the Department for Education and is laid before Parliament by Command of Her Majesty.

2. Purpose of the instrument

2.1 The School and Early Years Finance (England) Regulations 2012 define the local authority education budgets (the non-schools education budget, the schools budget, the central expenditure and the individual schools budget) and set out how local authorities are to allocate funding from the individual schools budget (ISB) to maintained schools and private, voluntary and independent providers of free early years provision (relevant early years providers) through a locally determined formula.

2.2 These Regulations relate only to the 2013-14 financial year.

2.3 The Regulations give effect to the decisions made to reform the school funding system through simplified local formulae, greater delegation to schools and new arrangements for funding pupils with high needs.

3. Matters of special interest to the Joint Committee on Statutory Instruments

None.

4. Legislative Context

4.1 New regulations need to be made because the School Finance (England) Regulations 2012 (S.I. 2012/445) apply only to the end of the 2012- 13 financial year. These Regulations are made under the provisions of Chapter 4 of Part 2 of the School Standards and Framework Act 1998 (SSFA 1998) (financing of maintained schools), as amended.

5. Territorial Extent and Application

This instrument applies to England.

6. European Convention on Human Rights

As the instrument is subject to negative resolution procedure and does not amend primary legislation, no statement is required.

7. Policy background

7.1 Following two previous consultations, Ministers announced on 26 March 2012 that there would be reforms to the school funding system from the 2013-14 financial year. These Regulations give effect to the decisions announced then.

7.2 The main changes compared to the previous Regulations are set out below.

7.3 The number of different factors which can be used by local authorities in their school funding formula has been reduced from 37 to 12. These include compulsory factors for total pupil numbers and deprivation. Factors using pupil numbers will be based on the October pupil census instead of the January census as previously; this will enable local authorities to calculate school budgets earlier and they will be required to issue budgets to maintained schools by 15 March rather than 31 March as previously. Local authorities must consult all maintained schools as well as their schools forum when changing their formulae.

7.4 Local authorities are able to apply to the Secretary of State to request additional factors but these must relate to additional costs arising as a result of the nature of the school’s premises.

7.5 The Minimum Funding Guarantee (MFG) for schools has been set at - 1.5% per pupil for 2013-14. The calculation has been simplified compared with previous years and the Regulations set out the factors which are excluded from the calculation. Local authorities can apply to the Secretary of State for other factors to be excluded from the calculation. Authorities can also cap or scale back gains schools are making as a result of formula changes, but this must be applied consistently for all schools in the authority’s area.

7.6 There are greater restrictions on the expenditure which can be held centrally within the schools budget and schools forum approval is required for each heading. Some services which could previously be held centrally will now have to be delegated to schools through the formula. Others relating to historic commitments can only be retained centrally if the planned expenditure does not exceed that reported in the 2012-13 financial year.

7.7 Some budgets can be retained centrally without any limit if the schools forum agree. Local authorities will be able to retain funding centrally for pupil growth related to basic need or to enable schools to meet the requirements of the infant class size legislation. The growth criteria must be approved by the schools forum.

7.8 Some services can be retained centrally by maintained primary or secondary schools if their schools forum representatives vote to do so. This is known as “de-delegation” and means that the budgets are initially included in the funding formula calculation but are then removed before schools receive their budgets. The Regulations amend the Schools Forums (England) Regulations 2012 (S.I. 2012/266) to allow separate voting by the maintained primary or secondary representatives on the forum.

7.9 The Regulations also reflect changes to funding for pupils with high needs. Maintained special schools must receive a delegated budget of £10,000 for each agreed place, with the balance of funding paid as a “top-up” from central expenditure relating to high needs. This also applies to special units in mainstream schools. The same principles apply to pupil referral units, which will for the first time have delegated budgets from 1 April 2013. They will receive funding of £8000 for each agreed place, again with the balance of funding paid as a “top-up”.

7.10 The Regulations also reflect the transfer of funding for pupils with special educational needs or in further education with a learning difficulty assessment up to the age of 25. The definitions of eligible schools budget expenditure and eligible central high needs expenditure have been amended accordingly.

7.11 Funding for disadvantaged two year olds is moving into the schools budget from 1 April 2013. The Regulations relating to the Early Years Single Funding Formula have been amended to allow places to be funded for two year olds, to support capacity building, and to remove the requirement to have a deprivation factor for these children, as they are all from disadvantaged groups.

7.12 There are a few other changes relating to early years funding. The deprivation factor will have to relate to the characteristics of the children rather than the provider. Protection on the basic hourly rates of funding will also apply to all providers for the first time, at -1.5% in line with the MFG for schools. The schools forum will have to approve the level of centrally retained expenditure on early years.

8. Consultation outcome

8.1 As stated in paragraph 7.1, two consultations were carried out on the reforms to the school funding system prior to the announcement by Ministers on 26 March 2012. The first consultation ran from 13 April to 25 May 2011, and the second ran from 19 July to 11 October 2011. The responses to these consultations have already been published and can be found on the school funding reform page on the Department of Education’s website (http://www.education.gov.uk/schools/adminandfinance/financialmanagement /schoolsrevenuefunding/a00215225/school-funding-reform).

8.2 As a result of this previous consultation on the principles of change, the technical consultation on the School and Early Years Finance (England) Regulations 2012 focused on proposals that were not part of the earlier consultations and subsequent announcements. The consultation lasted from 19 July to 21 September 2012. There were 37 responses – 33 from local authorities, one from a schools forum, one from trades unions and two from national organisations. This consultation focused on three questions relating to nursery education for two-year olds.

8.3 The proposals for consultation were:- • To relax the requirement to have a mandatory deprivation supplement • To relax the rules on place based funding to support capacity building • To receive views on whether to have a mandatory quality supplement

8.4 For the mandatory deprivation supplement, there were 24 respondents consisting of 22 local authorities and two national organisations. 92% of respondents supported the proposal to relax the requirement to have a mandatory deprivation supplement. Respondents commented that by definition the eligible pupils will only be from disadvantaged areas, so having a deprivation supplement would not create any differential in funding.

8.5 For the place based funding, there were 21 respondents, consisting of 19 local authorities and two national organisations. 71% of respondents supported the proposals to relax the rules on place based funding in order to support capacity building. Respondents commented that relaxation will enable targeted and stable provision within local areas.

8.6 For the quality supplement, there were 24 respondents, consisting of 22 local authorities and two national organisations. 83% of respondents agreed that there should not be a mandatory quality supplement. Respondents commented that only good and outstanding providers were able to make this provision, so a quality factor would not create a differential in funding.

9. Guidance

A guidance note is to be sent to all local authorities outlining the changes, together with the Regulations, and these will be published on the Department for Education website: www.education.gov.uk

10. Impact

10.1 The impact on business, charities or voluntary bodies is that relevant early years providers will continue to be funded in respect of the free entitlement for three and four year olds through the same formula that the local authority will use to determine the funding of this free entitlement in maintained schools. As noted above, protection on the hourly base rates will apply to non-maintained providers for the first time, while funding for disadvantaged two year olds will also be distributed through this formula.

10.2 The impact on the public sector is that local authorities must comply with these Regulations when allocating their schools budget and determining budget shares for schools and amounts for early years providers.

10.3 An Impact Assessment has not been prepared for this instrument, but an Equality Impact Assessment was produced alongside the funding reform consultation documents published on 26 March 2012 and 28 June 2012. The Impact Assessment can be accessed here: http://media.education.gov.uk/assets/files/pdf/s/school%20funding%20equia.p df

11. Regulating small business

The legislation does not apply to small business.

12. Monitoring & review

12.1 The regulatory framework will be considered as part of the continuing review of school funding and potential movement towards a national funding formula.

12.2 The changes will be monitored through the usual contact which the School Funding Team within the Department for Education has with schools and local authorities. It will log and review any correspondence from schools and local authorities relating to the instrument.

13. Contact

Keith Howkins at the Department for Education can answer any queries regarding the instrument. Tel: 020 7227 5163 or email: [email protected]

ADDITIONAL CONDITIONS OF GRANT

(a) the authority must maintain a single formula for funding both maintained schools and Academies in its area;

(b) in constructing the formula, the authority must take account of the circumstances of all Academies and maintained schools in its area;

(c) in using funding held centrally within DSG, other than funding that has been de-delegated by maintained schools, the authority must treat maintained schools and Academies to which recoupment applies on an equivalent basis;

(d) in making arrangements for funding young people with high needs, the authority must treat those placed in maintained provision, in Academies and Free Schools, in the FE sector, and in non-maintained and independent provision on a fair and equivalent basis;

(e) in deciding on top-up funding rates for the pupils it will place in special schools maintained by the Authority and Special Academies formerly maintained by the authority, the authority must ensure that the rates for each school are set no lower than at such a rate or rates that, if all the pupils in the school or Academy were placed by the authority, and the total number and type of places remained the same in the two financial years, the school or Academy’s budget would reduce by no more than 1.5% in cash between 2012-13 and 2013-14;

(f) when a pupil who would require top-up funding has already been placed in an institution by the authority at the time the new funding system for high needs pupils has introduced, the authority must enter into an agreement with the institution to make such top-up payments until such time as the pupil has left the institution, or the contract is replaced by another. When such a pupil is placed by the authority in an institution at a later date, the authority must likewise enter into such an agreement;

(g) when making top-up payments to institutions for high needs pupils, the authority must make the payments in a timely fashion on a basis agreed with the institution, which should be monthly unless otherwise agreed.

For information 10th December 2012 and Action

The Headteacher

Dear Colleague,

Management of Surplus School Balances 2012/13

The purpose of this letter is to outline the Local Authority’s Scheme for the Management of Surplus Balances challenge process for the financial year ending 2012/13.

This term, you are asked to predict your school's carry forward balance for the financial year ending 31st March 2013. This process should be completed by reviewing your school’s spending to date and by considering commitments and expenditure for the remainder of the financial year. The predicted carry forward balance should then be documented using the attached pro-forma.

It is essential that you take the time to complete the pro-forma in full. This is particularly important if you are predicting a surplus balance close to the permitted level. Last year, a number of schools provided no information regarding allowable commitments (for use of their surplus balance) in the belief that it would be below the permitted level for their school sector. This is a risky strategy to adopt as schools may not, in future, have the opportunity to revisit the information provided on the pro-forma should they end the year with an excess surplus balance.

The submitted pro-forma will be analysed, with any queries arising being discussed directly with individual schools. These predictions will then be used as a benchmark against your school’s actual year-end balance when it is confirmed in May 2013.

The pro-forma must be completed by all schools, even if you are predicting a deficit or zero balance at the year-end and returned to the Schools Finance Team by Tuesday, 15th January 2013. For those schools failing to submit the pro-forma by this date, it will be assumed that none of any resultant actual surplus balance (as at 31st March 2013) is committed and therefore, any excess above the permitted level will be available for claw-back and redistribution. The permitted levels are shown on the attached pro-forma.

Should you wish to discuss the issues covered in this letter further, please do not hesitate to contact your Lead Officer or myself.

Yours sincerely, Caroline Brand Principal Schools Finance Officer Children's Services

PO Box 73 Caroline Brand County Hall Principal Schools Finance Officer Spetchley Road Worcester WR5 2YA

Tel 01905 766277Fax 01905 728577Minicom (01905) 766399DX 29941 Worcester 2 [email protected]www.worcestershire.gov.uk

J:\03 Shared\04 Year End\2010-11\Management of Surplus Balances\Management of Surplus Balances Letter to all Schools - Nov 2010.docx MANAGEMENT OF SURPLUS SCHOOL BALANCES 2012/13 APPENDIX A PREDICTED CARRY FORWARD BALANCE AT 31st MARCH 2013

As detailed in the Worcestershire Scheme for Financing Schools, you are required to complete this proforma predicting your estimated school balance at the year end 2012/2013. This process should be completed by reviewing your school’s spending to date and by considering commitments and expenditure for the remainder of the financial year. This information must be submitted to the Schools Finance Team by Tuesday, 15th January 2013. For schools failing to submit the pro-forma by the due date, it will be assumed that none of the resultant actual surplus balance, as at 31st March 2013, is committed and therefore any excess above the permitted level will be available for claw-back and redistribution.

SCHOOL: NB - Analysis is for revenue funding sources only. Please do not include devolved formula capital on this pro-forma COST CENTRE: Please return this proforma signed, even if you are predicting a Zero or deficit balance at year end. £ Please complete the shaded areas as appropriate. If you use the spreadsheet electronically, the totals and Total Predicted Surplus Balance 2012/13 Total A uncommitted balance will calculate

Total Predicted Deficit Balance 2012/13 Total B Please ensure that commitments are not duplicated

If you have entered a Zero projected balance in A above, or a Predicted Deficit balance in B, you are not required to complete any further information, but to sign the form and return. ANY ADDITIONAL INFORMATION You will be required to provide relevant evidence at year REVISED CRITERIA TO OPERATE AS AN ALLOWABLE USE OF end - as per Appendix B BALANCES FROM 31ST MARCH 2013 £ Year End Commitments

Unspent Standards Fund Grant

Revenue Contribution to Capital Project

Income Generation by School

School Development Plan Commitments

Changes in Demography

Late Funding Allocation Spring Term

Reserves Held on Behalf of Other Schools

Total for Acceptable Criteria (Total C) -

Total Uncommitted Surplus Balance after Acceptable - Criteria (A-C)

Signed (Headteacher) Date

Signed (Chair of Governors) Date

Please return to the Schools Finance Team by Tuesday 15th January 2013, either by post or Fax to 01905 728577, or email (scanned copy) to [email protected]. Please Note Only Signed copies will be accepted. School balances should be no more than 8% of the current year's budget share for Nursery, Primary, Middle Deemed Primary and Special schools and 5% for Middle Deemed Secondary and Secondary schools. We do, however, recognise that there are a number of primary schools in Worcestershire for which 8% carry forward would be insufficient. We therefore allow the cost of one full time teacher at the top of the main scale plus on costs, £38,400 or 8% of total resources whichever is the greater total. These limits are included in the Worcestershire Scheme for Financing Schools. AGENDA ITEM 9 WORCESTERSHIRE SCHOOLS FORUM 11th JANUARY 2013

REPORT TO THE WORCESTERSHIRE SCHOOLS FORUM (WSF) CHANGES TO THE FAIR FUNDING SCHEME FOR FINANCING SCHOOLS

1. PURPOSE

1.1 To advise the WSF on required changes to the Worcestershire Fair Funding Scheme for Financing Schools.

1.2 To advise the WSF on the formal consultation requirements for the changes.

2. BACKGROUND

2.1 LAs are required to publish schemes for financing schools setting out the financial relationship between them and the schools they maintain.

2.2 Any amendments to schemes must be consulted on with all schools and be approved by the members of the WSF who represent schools maintained by the LA.

3. KEY ISSUES FOR CONSIDERATION

3.1 The existing Worcestershire Scheme for Financing Schools has not been updated since October 2009. The existing scheme is available on the WSF web site as follows: - http://www.worcestershire.gov.uk/cms/worcestershire-schools-forum/dfe-regulatory- issues.aspx

3.2 Amendments to LA Schemes for Financing Schools arise due to specific issues detailed in the following sections. Given the recent changes to the national funding arrangements for schools, it is proposed to review the existing scheme and to recommend relevant changes.

3.3 Changes to DfE Statutory Guidance

(a) The DfE publish such guidance for LAs setting out requirements for Fair Funding Schemes.

(b) Attached at Appendix A are some changes to the guidance. These will require some changes to the existing scheme.

(c) The majority of these changes require minor changes to the existing scheme text but there are some significant revisions including: - Removal of the requirement for schemes to have a balances control mechanism. Inclusion of guidance relating to how the costs of redundancies and early retirements should be funded. Changes to the information detailing school and LA responsibilities in relation to repairs and maintenance. Changes to reflect schools being able to spend their delegated budget for community facilities. 3.4 Directed DfE Revisions Requiring Mandatory Changes

(a) The Secretary of State under the Education Act 2011 has the power to issue directed revisions to LA schemes. Such changes are mandatory for LAs to include in their schemes.

(b) Attached at Appendix B is the latest set of such revisions made in April 2012. These will require some changes to the existing scheme.

(c) These changes include: - Removal of the requirements for: -  Statements of Best Value for schools in budget planning.  Financial Management Standard in Schools (FMSiS) given it is no longer a requirement.  General Teaching Council which has been abolished.

Inclusion of requirements for: -  Efficiency and value for money to replace Best Value.  Schools Financial Value Standard (SFVS).  Fraud.  Guidance about the redundancy costs of community facilities staff.

3.5 Individual LA Changes

These are unique to individual LAs if there are local issues for which amendments are required. Given the recent changes to the number of schools no longer maintained by the LA this will require a revised Annex detailing the revised list of schools now maintained by the LA.

3.6 The existing scheme has been reviewed and the required changes in the above sections have been included in a revised version. This is attached at Appendix C and the revisions are underlined and in italics.

4. RECOMMENDATIONS

4.1 The WSF notes and comments on the required changes.

4.2 The WSF agrees to a formal consultation with maintained schools on the required changes.

Andy McHale Service Manager Funding and Business Development

January 2013 SUMMARY OF SCHEME CHANGES

This note outlines and explains the changes to the DfE guidance on local authority schemes for financing schools, effective from 1 April 2011. Updated detailed guidance is now available on the DfE website at:

Finance Regulations and legal framework - The Department for Education

Changes from the previous version, published in October 2006, are underlined within the detailed guidance. In making any changes to their schemes, local authorities must consult all schools in their area and receive the approval of their schools forum.

The changes are set out below. References are to the section number in the previous guidance.

New List of matters which must be contained within schemes, as set out in the draft School Finance Regulations 2011.

1.3 Confirmation that the scheme, and any amendments to it, must be published on a website accessible to the general public. The date on which any amendments take effect must also be published. Annex A is also amended.

1.4 Approval of schemes – removal of reference to the Secretary of State and inclusion of schools forum role.

2.4 Removal of the requirement for schools to submit a statement of Best Value with their budget plan. The government believes that it is important for schools to achieve value for money, but that this can be demonstrated in other ways than a written statement

2.11 Removal of exceptions to requirement that schools must be allowed to opt out of LA contracts. The government believes that schools are best placed to make their own purchasing decisions and should not be constrained in their ability to do so.

2.13 Clarification and updating definition of eligible expenditure for the “purposes of the school” to include pupils at other maintained schools and community facilities.

2.15 Removal of the section relating to the Financial Management Standard in Schools (FMSiS). The Secretary of State announced on 15 November 2010 that the Financial Management Standard for Schools (FMSiS) would no longer be a requirement, and would be replaced by a new simpler standard during 2011. A directed revision to schemes requiring schools to meet FMSiS was introduced in 2007. Local authorities should no longer enforce this requirement. The Department will consult in the proposed replacement early in 2011.

3.5.1 Removing the requirement for there to be at least ten banks on the approved list for school bank accounts and replacing this with a requirement to be consistent with the LA’s Treasury Management policy, given the turbulence in the banking system in the last couple of years.

3.6 Encouragement of the use of procurement cards as these reduce transaction costs and can enable schools to benefit from significant discounts.

4.2 It will no longer be a requirement for schemes to have a balance control mechanism. The revised paragraph reads:

“The scheme may contain a mechanism to clawback excess surplus balances. Any mechanism should have regard to the principle that schools should be moving towards greater autonomy, should not be constrained from making early efficiencies to support their medium- term budgeting in a tighter financial climate, and should not be burdened by bureaucracy. The mechanism should, therefore, be focused on only those schools which have built up significant excessive uncommitted balances and/or where some level of redistribution would support improved provision across a local area.”

LAs should, therefore, consider removing or relaxing their existing mechanism with effect from 1st April 2011.

4.8 Amendment to balances of closing schools to reflect the provisions of the Academies Act 2010.

4.9 Removal of reference to School Standards Grant in relation to licensed deficits

4.11/ Removal of references to ex GM schools. 12

6.2 Enabling LAs to charge schools whose withdrawal from a cluster arrangement into which they entered voluntarily results in additional costs to the other schools in the cluster or to the LA; this is to remove disincentives to the employment of shared staff in clusters and partnerships. At present schools can agree to share the cost of a member of staff for, say, three years but one school can then withdraw without notice putting extra costs on the school actually employing the member of staff.

6.2.8 Inclusion of the Environment Agency in the list of regulatory bodies, to reflect their role in the Carbon Reduction Commitment scheme. This would enable LAs to pass through to schools any costs arising from non-compliance with the scheme.

11.6 Strengthened wording on Chief Finance Officer’s right to attend relevant governing body meetings – schemes “should” not “may” permit this right.

11.13 Deletion of paragraph on school meals – not relevant to a financial scheme.

11. Inclusion of guidance in new Annex relating to how costs of redundancies and early retirements should be funded; this information is frequently requested and will be increasingly relevant in a tighter financial settlement. The 2002 Education Act states that the cost of redundancies should normally fall to the local authority while the cost of premature retirements should normally fall to the school’s delegated budget. There can, however, be locally determined exceptions to these, and it is also the case that costs can be charged to the central part of the schools budget if there are resultant savings to the schools budget and the schools forum agree. It is important that any exceptions to the norm are clearly defined by LAs and discussed with schools forums.

13. Removal of Annex B outlining the recommended respective responsibilities of schools and LAs in relation to maintenance, which was useful when these budgets were first delegated but is less relevant now.

14. Amendment of the section on community facilities to reflect the change in the law enabling schools to spend their delegated budget for this purpose. This takes effect from April 2011.

Local Authority Schemes: Directed Revisions 2012

The following sets out the directed revisions the Secretary of State is making to local authority schemes. - Text in normal font denotes the actual directed revision local authorities are required to place in, or remove from, their schemes; - Text in italics denotes accompanying guidance.

These revisions will take effect on 1st April 2012.

Removal of requirements from the Scheme

Best Value Local authorities must remove any requirement in their schemes for schools to submit a statement of Best Value with their budget plan.

The government believes that it is important for schools to achieve value for money, but this can be demonstrated in other ways than a written statement.

The Department removed this requirement from its guidance on local authority schemes to take effect from 1 April 2011.

Financial Management Standard in Schools (FMSiS) Local authorities must remove from their schemes requirements relating to the Financial Management Standard in Schools (FMSiS).

A directed revision to schemes requiring schools to meet FMSiS was introduced in 2007. The Department has introduced the Schools Financial Value Standard (SFVS) as a much simpler replacement for all maintained schools. Information on the new SFVS was published in July 2011.

6.3 – General Teaching Council Local authorities must remove from their schemes requirements relating to payments of General Teaching Council (GTC) fees.

The GTC was abolished by the Education Act 2011 with effect from 1st April 2012.

Requirements for inclusion in the Scheme

2.4 Efficiency and value for money (replaces current Best Value section) The scheme must include the following provision, which imposes a requirement on schools to achieve efficiencies and value for money, to optimise their resources and invest in teaching and learning; taking into account purchasing, tendering and contracting requirements.

It is for heads and governors to determine at school level how to secure better value for money.

The text for this provision is set out below.

Schools must seek to achieve efficiencies and value for money, to optimise the use of their resources and to invest in teaching and learning, taking into account the Authority’s purchasing, tendering and contracting requirements.

It is for heads and governors to determine at school level how to secure better value for money.

There are significant variations in efficiency between similar schools, and so it’s important for schools to review their current expenditure, compare it to other schools, and think about how to make improvements.

New 2.16 - Schools Financial Value Standard (SFVS) The scheme must include the following provision, which makes it mandatory for all local authority maintained schools to complete the SFVS assessment form on an annual basis and submit a signed copy to their Authority. SFVS will also apply to all local authority maintained nursery schools and Pupil Referral Units that have a delegated budget.

The text for this provision is set out below.

All local authority maintained schools (including nursery schools and Pupil Referral Units (PRUs) that have a delegated budget) must demonstrate compliance with the Schools Financial Value Standard (SFVS) and complete the assessment form on an annual basis. It is for the school to determine at what time in the year they wish to complete the form.

Governors must demonstrate compliance through the submission of the SFVS assessment form signed by the Chair of Governors. The form must include a summary of remedial actions with a clear timetable, ensuring that each action has a specified deadline and an agreed owner. Governors must monitor the progress of these actions to ensure that all actions are cleared within specified deadlines.

Maintained schools that did not achieve the Financial Management Standard in Schools (FMSiS) must submit the form to the local authority before 31 March 2012, and annually thereafter.

All other maintained schools with a delegated budget must submit the form to the local authority before 31 March 2013 and annually thereafter.

We will consider requests from local authorities to have an earlier deadline where there is a good reason.

New 2.17 - Fraud

The scheme must include the following provision, which requires schools to have a robust system of controls to safeguard themselves against fraudulent or improper use of public money and assets.

The text for this provision is set out below.

All schools must have a robust system of controls to safeguard themselves against fraudulent or improper use of public money and assets.

The governing body and head teacher must inform all staff of school policies and procedures related to fraud and theft, the controls in place to prevent them; and the consequences of breaching these controls. This information must also be included in induction for new school staff and governors.

Amended statutory scheme guidance

Amend final section of Annex B from:

For staff employed under the community facilities power, the default position is that any costs must be met by the governing body, but not from the delegated budget. Section 37 states:

(7)Where a local education authority incur costs— (a)in respect of any premature retirement of any member of the staff of a maintained school who is employed for community purposes, or (b)in respect of the dismissal, or for the purpose of securing the resignation, of any member of the staff of a maintained school who is employed for those purposes, they shall recover those costs from the governing body except in so far as the authority agree with the governing body in writing (whether before or after the retirement, dismissal or resignation occurs) that they shall not be so recoverable.

(8)Any amount payable by virtue of subsection (7) by the governing body of a maintained school to the local education authority shall not be met by the governing body out of the school’s budget share for any financial year.

(9)Where a person is employed partly for community purposes and partly for other purposes, any payment or costs in respect of that person is to be apportioned between the two purposes; and the preceding provisions of this section shall apply separately to each part of the payment or costs.

(We will review this provision in the context of the forthcoming changes which will allow other community facilities costs to be charged to delegated budgets from 1 April 2011, but this remains the legal position for the time being). to:

For staff employed under the community facilities power, the default position is that any costs must be met by the governing body, and can be funded from the school’s delegated budget if the governing body is satisfied that this will not interfere to a significant extent with the performance of any duties imposed on them by the Education Acts, including the requirement to conduct the school with a view to promoting high standards of educational achievement. Section 37 now states:

(7A)Any amount payable by virtue of subsection (7) by the governing body of a maintained school in England to the local authority may be met by the governing body out of the school’s budget share for any funding period if and to the extent that the condition in subsection (7B) is met. (7B)The condition is that the governing body are satisfied that meeting the amount out of the school’s budget share will not to a significant extent interfere with the performance of any duty imposed on them by section 21(2) or by any other provision of the Education Acts. (9)Where a person is employed partly for community purposes and partly for other purposes, any payment or costs in respect of that person is to be apportioned between the two purposes; and the preceding provisions of this section shall apply separately to each part of the payment or costs.

APPENDIX C

WORCESTERSHIRE COUNTY COUNCIL FAIR FUNDING SCHEME FOR FINANCING SCHOOLS LIST OF CONTENTS 1. INTRODUCTION 1.1 The Funding Framework 1.2 The Role of the Scheme 1.2.1 Application of the Scheme to the Local Authority (LA) and Maintained Schools 1.3 Publication of the Scheme 1.4 Revision of the Scheme 1.5 Delegation of Powers to the Headteacher 1.6 Maintenance of Schools

2. FINANCIAL CONTROLS 2.1.1 Application of Financial Controls to Schools 2.1.2 Provision of Financial Information and Reports 2.1.3 Payment of Salaries; Payment of Bills 2.1.4 Control of Assets 2.1.5 Accounting Policies (Including Year-End Procedures) 2.1.6 Writing off of Debts 2.2 Basis of Accounting 2.3 Submission of Budget Plans 2.3.1 Submission of Financial Forecasts 2.4 Efficiency and Value for Money 2.5 Virement 2.6 Audit: General 2.7 Separate External Audits 2.8 Audit of Voluntary and Private Funds 2.9 Register of Business Interests 2.10 Purchasing, Tendering and Contracting Requirements 2.11 Application of Contracts to Schools 2.12 Central Funds and Earmarking 2.13 Spending for the Purposes of the School 2.14 Capital Spending from Budget Shares

WCC Scheme for Financing Schools – January 2013 1 2.15 Schools Financial Value Standard (SFVS) 2.16 Notice of Concern 2.17 Fraud

3. INSTALMENTS OF BUDGET SHARE; BANKING ARRANGEMENTS 3.1 Frequency of Instalments 3.2 Proportion of Budget Share Payable at Each Instalment 3.3 Interest Clawback 3.3.1 Interest on the Budget Share Payments 3.4 Budget Shares for Closing Schools 3.5 Bank and Building Society Accounts 3.5.1 Restrictions on Accounts 3.6 Borrowing by Schools 3.7 Other Provisions

4. THE TREATMENT OF SURPLUS AND DEFICIT BALANCES ARISING IN RELATION TO BUDGET SHARES 4.1 Right to Carry Forward Surplus Balances 4.1.1 Calculation of Balances 4.2 Controls on Surplus Balances 4.2.1 Reporting on the Intended Use of Surplus Balances 4.3 Interest on Surplus Balances 4.4 Obligation to Carry Forward Deficit Balances 4.5 Planning for Deficit Balances 4.6 Charging of Interest on Deficit Balances 4.7 Writing off of Deficits 4.8 Balances of Closing and Replacement Schools 4.9 Borrowing for Agreed Purposes 4.10 Licensed Deficits 4.11 Loan Schemes 4.11.1 Credit Union Approach 4.12 Multi Year Budgets

5. INCOME 5.1 Income from Lettings

WCC Scheme for Financing Schools – January 2013 2 5.2 Income from Fees and Charges 5.3 Income from Fund Raising Activities 5.4 Income from the Sale of Assets 5.5 Administrative Procedures for the Collection of Income 5.6 Purposes for Which Income May be Used

6. THE CHARGING OF SCHOOL BUDGET SHARES 6.1 General Provision 6.1.1 Charging of Salaries at Actual Cost 6.2 Circumstances in Which Charges May be Made

7. TAXATION 7.1 Value Added Tax 7.2 Construction Industry Taxation Scheme (CITS)

8. THE PROVISION OF SERVICES AND FACILITIES BY THE LA 8.1 Provision of Services from Centrally Retained Budgets 8.2 Timescales for the Provision of Services Bought Back from the LA Using Delegated Budgets

8.2.1 Packaging 8.3 Service Level Agreements 8.4 Teachers Pensions

9. PRIVATE FINANCE INITIATIVES (PFI)/PUBLIC PRIVATE PARTNERSHIPS

10. INSURANCE 10.1 Insurance Cover

11. MISCELLANEOUS 11.1 Right of Access to Information 11.2 Liability of Governors 11.3 Governors Expenses 11.4 Responsibility for Legal Costs 11.5 Health and Safety

WCC Scheme for Financing Schools – January 2013 3 11.6 Right of Attendance for Director of Resources 11.7 Delegation to New Schools 11.8 Optional Delegated Funding 11.9 Special Educational Needs and Educational Inclusion 11.10 Whistle Blowing 11.11 Child Protection 11.12 Redundancy and Early Retirement Costs

12. RESPONSIBILITY FOR REPAIRS AND MAINTENANCE

13. COMMUNITY FACILITIES 13.1 Introduction 13.2 Consultation with the LA 13.3 Funding agreements 13.4 Other Prohibitations, Restrictions and Limitations 13.5 Supply of Financial Information 13.6 Audit 13.7 Treatment of Income and Surpluses 13.8 Health & Safety Matters 13.9 Insurance 13.10 Taxation 13.11 Banking

Annex A: The Statutory Outline Scheme Annex B: The Funding Framework Main Features Annex C: Schools to Which the Scheme Applies Annex D: Proportion of budget share payable at Each Instalment Annex E: Responsibility for Redundancy and Early Retirement Costs Annex F: Responsibility for Repairs and Maintenance

WCC Scheme for Financing Schools – January 2013 4 SECTION ONE – INTRODUCTION 1.1 The Funding Framework

The Statutory Outline Scheme is detailed in Annex A.

The Funding Framework Main Features are detailed in Annex B.

1.2 The Role of the Scheme

This scheme sets out the financial relationship between the LA and the maintained schools, which it funds. It contains requirements relating to financial management and associated issues, which are binding on both the LA and on the schools.

1.2.1 Application of the Scheme to the LA and Maintained Schools

This scheme applies to all maintained community, voluntary, foundation, community special, foundation special schools, nurseries and pupil referral units/short stay schools (from April 2013) in the area of the LA. These are listed in Annex C. It does not apply to schools situated in the LA which are maintained by another LA, nor does it apply to Academies and Free Schools.

1.3 Publication of the Scheme

These requirements are detailed in Annex B.

1.4 Revision and Approval of the Scheme

These requirements are detailed in Annex B.

1.5 Delegation of Powers to the Headteacher

Each Governing Body is asked to consider the extent to which it wishes to delegate its financial powers to the Headteacher, and to record its decision (and any revisions) in the minutes of the Governing Body. The LA has no wish to impose uniformity on schools but considers that the level of delegation to Headteachers, which is desirable, is as set out in guidance to governors.

In terms of the annual budget plan, the first formal budget plan of each financial year must be approved by the Governing Body or by a designated Committee of the Governing Body.

1.6 Maintenance of Schools

The LA is responsible for maintaining the schools covered by the scheme, and this includes the duty of defraying all the expenses of maintaining them (except in the case of a voluntary aided school where some of the expenses are, by statute, payable by the Governing Body). Part of the way an LA maintains schools is through the funding system put in place under sections 45 to 53 of the SSFA 1998.

WCC Scheme for Financing Schools – January 2013 5 SECTION TWO – FINANCIAL CONTROLS

2.1.1 Application of Financial Controls to Schools

In managing their delegated budgets schools must abide by the LAs requirements on financial controls and monitoring.

Certain of these are directly referred to in this scheme while others are included in the following documents already sent to schools:

Financial Regulations. Financial Procedures and Accounting Instructions.

2.1.2 Provision of Financial Information and Reports

Schools are required to provide the LA with details of expected and actual expenditure and income, in a form and at times determined by the LA. Such details will not be required more often than once very three months, except for those connected with tax or bank reconciliation. The LA many, however, notify the school in writing if in its view the school's financial position requires more frequent submission or the school is in its first year of operation. This restriction would not apply if a school were to be part of an on-line financial accounting system operated by the LA.

The details of these requirements are set out in the following documents already sent to schools: -

Financial Procedures and Accounting Instructions.

2.1.3 Payment of Salaries; Payment of Bills

The procedures for these will vary according to the choices schools make about the holding of bank accounts and the buying back of the LAs payroll system.

The procedures, which apply to the different choices made by schools, are as set out in the following documents already sent to schools: -

.Financial Procedures and Accounting Instructions; .Service Level Agreements.

2.1.4 Control of Assets

Each school must maintain an inventory of its moveable non-capital assets, in a form determined by the LA, and setting out the basic authorisation procedures for disposal of assets.

The format of the required inventory and the basic authorisation procedures for disposal of assets is as set out in the following documents already sent to schools: - .Financial Procedures and Accounting Instructions

WCC Scheme for Financing Schools – January 2013 6 . Schools may determine their own arrangements for keeping a register of assets worth less than £1000. However, they must keep a register in some form.

2.1.5 Accounting Policies (Including Year-End Procedures)

Schools must abide by procedures issued by the LA in relation to accounting policies and year-end procedures.

These procedures are as set out in the following documents already sent to schools: -

Financial Procedures and Accounting Instructions

2.1.6 Writing off of Debts

Where a school has its own bank account the Governing Body is authorised to write off debts up to a level stipulated by the Director of Resources, but must notify the LA of any debts approved for write off. The current limit is set at debts up to and including £250.

In the case of larger debts and for schools who do not have their own bank account, the school must carry out the following procedures as set out in: -

Financial Regulations. Financial Procedures and Accounting Instructions.

It is important that whenever possible schools should obtain payment in advance

2.2 Basis of Accounting

Reports and accounts furnished to the LA must be on an accruals basis. Schools may use what financial software they wish, provided they meet the costs of any modification to provide output required by the LA.

2.3 Submission of Budget Plans

Each school is required to submit a budget plan to the LA by 31st May in each year for the financial year in question.

The budget plan must show the school’s intentions for expenditure in the current financial year and the assumptions underpinning the budget plan. The school may take account of estimated deficits/surpluses at 31st March in their budget plan. The format of the budget plan should be as set out in the following documents sent to schools: -

School Budget Planning Summary to take account as far as possible the Consistent Financial Reporting (CFR) national framework.

The LA may also require the submission of revised plans where the LA deems it necessary. Such revised plans shall not be required at intervals of less than three months.

WCC Scheme for Financing Schools – January 2013 7

The LA will supply schools with all income and expenditure data that it holds and which is necessary for efficient planning by schools. An annual statement of this information will be available at times through the year.

The full Governing Body or a designated Committee of the Governing Body of a school, as outlined in their regulations must agree the initial school budget plan approval.

Regulation 17(1)(c) of the School Governance (Procedures)(England) Regulations 2003 requires the Governing Body or a committee of the Governing Body to give their approval to the first formal budget plan of the financial year.

2.3.1 Submission of Financial Forecasts

The LA may also require schools to submit a financial forecast covering each year of a multi-year period for which schools have been notified of budget shares beyond the current year.

2.4 Efficiency and Value for Money

Schools must seek to achieve efficiencies and value for money, to optimise the use of their resources and to invest in teaching and learning, taking into account the LAs purchasing, tendering and contracting requirements.

It is for heads and governors to determine at school level how to secure better value of money.

2.5 Virement

Schools are free to vire between budget heads in the expenditure of their budget shares but governors are advised to establish criteria for virements and financial limits above which the approval of the governors is required.

2.6 Audit: General

Schools are required to provide access to the school’s records and to co-operate both with auditors employed by the LA (internal audit) and auditors appointed by the Audit Commission to audit the local LA itself (external audit).

In regard to internal audit, all schools come within the audit regime determined by the LA.

Details of this are set out in the following separate document distributed to schools: -  Financial Regulations.

Specific requirements will be issued for bank account schools. Where additional audits are required as a result of a school operating its own bank account there will be a charge for this service.

WCC Scheme for Financing Schools – January 2013 8 In relation to external audit all schools come within the LA external audit regime as determined by the Audit Commission.

2.7 Separate External Audits

In instances where a school wishes to seek an additional source of assurance at its own expense, a Governing Body is permitted to spend funds from its budget share to obtain external audit certification of its accounts, separate from any LA internal or external audit process. Where a school chooses to seek such an additional audit it does not remove the requirement that the school must also co- operate with the LAs internal and external auditors.

2.8 Audit of Voluntary and Private Funds

In addition to the normal internal and external audits, schools must provide audit certificates in respect of any voluntary and private funds they hold and of the accounts of any trading organisations controlled by the school.

The procedures for furnishing these audit certificates and advice on the handling of such voluntary and private funds is set out in the following documents previously distributed to schools: -

Financial Regulations.

2.9 Register of Business Interests

The Governing Body of each school is required to establish a register which lists for each member of the Governing Body and the Headteacher, any business interests they or any member of their immediate family have; to keep the register up to date with notification of changes and through annual review of entries, and to make the register available for inspection by the LA, school governors, staff and parents.

More detailed guidance on the maintenance of such a register is set out in the following documents already sent to schools: -

OFSTED document – Keeping your Balance.

2.10 Purchasing, Tendering and Contracting Requirements

Schools are required to abide by the LAs financial regulations and standing orders in purchasing, tendering and contracting matters other then where the scheme would require schools: -

To do anything incompatible with any of the provisions of the scheme, or any statutory provision, or any EU Procurement Directive.

To seek LA Officer counter signature for any contracts for goods or services for a value below £60,000 in any one year.

To select suppliers only from an approved list.

WCC Scheme for Financing Schools – January 2013 9 Would permit schools to seek fewer than 3 tenders or quotations in respect of any contract exceeding £10,000 in any one year.

Schools are required to assess in advance, where relevant, the health and safety competence of contractors, taking account of the LAs policies and procedures.

Schools may nominate suppliers for inclusion on the LAs list of approved suppliers.

Individual school Governing Bodies together with the Headteacher must determine their own arrangements for handling contracts. They must abide by the LAs Standing Orders for contracts in excess of the equivalent value of £200,000 Special Drawing Rights (SDR's, Value approximately £144,000 at February 2001). A minimum of three tenders must be sought for any contract with a value exceeding £10,000 in any one year.

2.11 Application of Contracts to Schools

Schools have the right to opt out of LA-arranged contracts. This is except where they have lost that right for particular contracts (whenever started) in accordance with a specified written procedure: in which case they will be bound into the contract for its length (although the contract might contain clauses allowing variance of its terms and conditions).

Although Governing Bodies are empowered under paragraph 3 of schedule 1 to the Education Act 2002 to enter into contracts, in most cases they do so on behalf of the LA as maintainer of the school and owner of the funds in the budget share.

Other contracts may be made solely on behalf of the Governing Body, when the Governing Body has clear statutory obligations, e.g. contracts made by aided or foundation schools for the employment of staff.

2.12 Central Funds and Earmarking

The LA is authorised to make sums available to schools from central funds, in the form of allocations, which are additional to and separate from the schools’ budget shares. Such allocations shall be subject to conditions setting out the purpose or purposes for which the funds may be used: and while these conditions need not preclude virement (except, of course, where the funding is supported by a specific grant which the LA itself is not permitted to vire), this should not be carried to the point of assimilating the allocations into the school’s budget share.

Such earmarked funding from centrally retained funds is to be spent only on the purposes for which it is given, or on other budget heads for which earmarked funding is given, and is not to be vired into the school’s budget share. Any unspent balance of earmarked funds must be returned to the LA if not spent during the year or within the period over which schools are allowed to use the funding if different.

WCC Scheme for Financing Schools – January 2013 10 In order that schools may demonstrate compliance with this requirement, the procedure as set out in the following documents already sent to schools shall be used: -

Earmarked Funding Allocation Sheets.

The LA will not make any deduction in respect of interest costs to the LA from payments to school of devolved specific or special grants.

2.13 Spending for the Purposes of the School

Governing Bodies are free to spend budget shares for the purposes of the school’, subject to any provisions of this scheme. This includes where a school has a budget share in relation to a pupil or pupils registered at other schools.

Amounts spent by Governing Bodies on community facilities will be treated as if spent for any purpose of the school.

The LA may issue guidance and impose restrictions to school budget share expenditure. This will be detailed in: -

Financial Procedures and Accounting Instructions.

2.14 Capital Spending From Budget Shares

Governing Bodies are permitted to use their budget shares to meet the cost of capital expenditure on the school premises. The Governing Body must notify the LA of any proposals to undertake capital works, in advance of making any commitment. Where the LA owns the premises or the school has Voluntary Controlled (VC) status the Governing Body shall also seek the consent of the LA to the proposed works, consent will only be withheld on health and safety grounds.

This includes expenditure by the Governing Body of a Voluntary Aided (VA) school on work which is their responsibility.

For all premises where the expected capital expenditure from the budget share in any one-year will exceed £15,000, the Governing Body must notify the LA and take into account any advice from the Director of Children’s Services as to the merits of the proposed expenditure. The Governing Body should not enter into any capital scheme that impacts on the LAs statutory responsibilities regarding the planning and supply of school places.

2.15 Schools Financial Value Standard (SFVS) All LA maintained schools (including nursery schools and Pupil Referral Units (PRUs) that have a delegated budget) must demonstrate compliance with the Schools Financial Value Standard (SFVS) and complete the assessment form on an annual basis.

It is for the school to determine at what time in the year they wish to

WCC Scheme for Financing Schools – January 2013 11 Complete the form. Governors must demonstrate compliance through the submission of the SFVS assessment form signed by the Chair of Governors.

The form must include a summary of remedial actions with a clear timetable, ensuring that each action has a specified deadline and an agreed owner.

Governors must monitor the progress of these actions to ensure that all actions are cleared within specified deadlines.

Maintained schools that did not achieve the Financial Management Standard in Schools (FMSiS) must submit the form to the local authority before 31 March 2012, and annually thereafter. All other maintained schools with a delegated budget must submit the form to the local authority before 31 March 2013 and annually thereafter.

2.16 Notice of Concern

The LA may issue a notice of concern to the Governing Body of any school it maintains where, in the opinion of the Director of Resources and the Director of Children’s Services, the school has failed to comply with any provisions of the scheme, or where actions need to be taken to safeguard the financial position of the LA or the school.

Such a notice will set out the reasons and evidence for it being made and may place on the Governing Body restrictions, limitations or prohibitions in relation to the management of funds delegated to it. These may include: -

insisting that relevant staff undertake appropriate training to address any identified weaknesses in the financial management of the school;

insisting that an appropriately trained/qualified person chairs the finance committee of the Governing Body;

placing more stringent restrictions or conditions on the day to day financial management of a school than the scheme requires for all schools – such as the provision of monthly accounts to the LA or the withdrawal of local banking arrangements;

insisting on regular financial monitoring meetings at the school attended by LA officers;

requiring a Governing Body to buy into a LAs financial management systems; and

imposing restrictions or limitations on the manner in which a school manages extended school activity funded from within its delegated budget share – for example by requiring a school to submit income projections and/or financial monitoring reports on such activities.

The notice will clearly state what these requirements are and the way in which and the time by which such requirements must be complied with in order for the

WCC Scheme for Financing Schools – January 2013 12 notice to be withdrawn. It will also state the actions that the LA may take where the Governing Body does not comply with the notice.

2.17 Fraud All schools must have a robust system of controls to safeguard themselves against fraudulent or improper use of public money and assets.

The Governing Body and Headteacher must inform all staff of school policies and procedures related to fraud and theft, the controls in place to prevent them; and the consequences of breaching these controls. This information must also be included in induction for new school staff and governors.

WCC Scheme for Financing Schools – January 2013 13 SECTION THREE – INSTALMENTS OF BUDGET SHARE; BANKING ARRANGEMENTS

3.1 Frequency of Instalments

The budget share for schools operating their own bank accounts will be made available to Governing Bodies on a monthly basis. Non-bank accounts schools may draw on its entire budget share from the start of the year (although in practice this would not happen because of pay commitments).

3.2 Proportion of Budget Share Payable at Each Instalment

The proportion of the budget share to be made available to schools shall be calculated as set out in Annex D.

3.3 Interest Clawback

The LA may deduct from budget share instalments an amount equal to the estimated interest lost by the LA in making available the budget share in advance. When payments are made on the basis set out in Annex D there is no significant loss of interest to the LA and, therefore, no interest will be charged to schools.

3.3.1 Interest on the Budget Share Payments

Where budget share payments are made the as a result of LA error, interest will be paid on the instalment, at Bank of England base rate.

3.4 Budget Shares for Closing Schools

Budget shares of schools for which approval for discontinuation has been secured, will be made in respect of the proportion of the year for which the school will remain open.

3.5 Bank and Building Society Accounts

All schools may have an external bank account into which their budget share instalments (as determined by other provisions) are paid. Where schools have such accounts they shall be allowed to retain all interest payable on the account.

Any school funded under this scheme wishing to opt for its own bank account may only do so after giving 3 months notice. New bank account arrangements will only be made with effect from the beginning of each financial year.

Schools without bank accounts at the start of the scheme cannot have one until any deficit balance is cleared; and any school requesting a bank account at a later date shall not be able to have one until any deficit is cleared.

Interest will be charged/paid on any adjustments made. The interest rate will be that used for interest on school balances (see Section 4 Paragraph 4.3).

WCC Scheme for Financing Schools – January 2013 14

3.5.1 Restrictions on Accounts

Accounts may only be held for the purpose of receiving budget share payments, at the banks or building societies consistent with the LAs Treasury Management Policy.

Schools having bank accounts with other banks prior to 1st April 2001 will be allowed to retain those accounts.

Any school closing an account used to receive its budget share and opening another must select the new bank or building society consistent with the LAs Treasury Management Policy.

Schools are allowed to have accounts for budget share purposes, which are in the name of the school. These accounts must only be used for the purposes of the school budget under the terms of this scheme. Money paid by the LA and held in such accounts remains LA property until spent (S.49 (5) of the SSFA 1998).

Where a school has such an account the account mandate should provide that the LA is the owner of the funds in the account and can take control of the account if the LA that is entitled to receive statements suspends the school’s right to a delegated budget.

3.6 Borrowing by Schools

Governing Bodies may borrow money only with the written permission of the Secretary of State.

The types of financing arrangements, which would normally be classed as borrowing are: -

Loans in the broadest sense, whereby lenders make available to the school a sum of money, which the school uses for specific aims. The school repays the sum of money usually at a price, over the term of the loan.

Finance leases, whereby the school requires the use of an asset from the supplier or lender over a specified period. At the end of the period, the school has paid the lender for the underlying cost and the asset plus interest charges.

Certain types of Public Private Partnerships where the asset is deemed to be 'on the balance sheet'.

See school borrowing guidance for further information. Schools are able to use procurement cards as part of the LAs scheme.

3.7 Other Provisions

WCC Scheme for Financing Schools – January 2013 15 The LA has formulated separate detailed rules and guidance in respect of other aspects of banking arrangements, which are as set out in the following documents already sent to schools: -

Financial Procedures and Accounting Instructions.

WCC Scheme for Financing Schools – January 2013 16 SECTION FOUR – THE TREATMENT OF SURPLUS AND DEFICIT BALANCES ARISING IN RELATION TO BUDGET SHARES

4.1 Right to Carry Forward Surplus Balances

Schools may carry forward from one financial year to the next any surplus/deficit in net expenditure relative to the school's budget share for the year plus/minus any balance brought forward from the previous year. A surplus balance at 1st April will be equal to that of 31st March.

4.1.1 Calculation of Balances

The amount of the balance to be transferred to a new bank account school will be based on discussions between the school and the LA as to what their estimated year-end balance will be. The amount will be subject to correction when the accounts for the relevant year are closed. The balance will be paid to the school along with the first instalment for the financial year, i.e. on 1st April or nearest bank working day.

4.2 Controls on Surplus Balances

The LA reserves the right to operate a scheme to control and potentially clawback excess surplus balances.

The mechanism will have regard to the principle that schools should be moving towards greater autonomy, should not be constrained from making early efficiencies to support their medium-term budgeting in a tighter financial climate, and should not be burdened by bureaucracy. This is in response to the DfE recommending that LAs relax provisions in this area.

The mechanism will, therefore, be focused on only those schools which have built up significant excessive uncommitted balances and/or where some level of redistribution would support improved provision across a local area.

The mechanism will be contained in: -

Financial Procedures and Accounting Instructions.

The total of any amounts deducted from school’s budget share by the LA under its mechanism in this provision are to be applied to the 'School Budget' of the LA for redistribution to schools on criteria and in a timescale to be determined by the LA in consultation with the WSF.

This scheme change will be modified to fit with any regulations the DfE issues from time to time.

The decision to make a deduction from a schools budget share will be made by the Director of Children’s Services or their representative. If a school feels that the scheme has been unfairly applied to them they can appeal to the Director of Resources via the WSF.

WCC Scheme for Financing Schools – January 2013 17 4.2.1 Reporting on the Intended use of Surplus Balances

In order to allow the LA to monitor excessive balances, Governing Bodies may from time to time be required to report to the LA on the use which the school intends to make of surplus balances (in excess of a percentage of the budget share as stipulated in the LA mechanism), after taking account of any retrospective adjustments.

4.3 Interest on Surplus Balances

Balances held by the LA on behalf of schools will attract interest on the following basis: -

The balance for interest purposes will be taken as the average between the brought forward figure at the beginning of the financial year and the cumulative balance carried forward at the end of the financial year.

The rate of interest paid will be an annual weighted average based upon the rate that the County Council receives on its investment portfolio.

4.4 Obligation to Carry Forward Deficit Balances

Deficit balances will be carried forward by the deduction of the relevant amounts from the following year's budget share (see also section 4.9). A deficit balance at 1st April will be equal to that of 31st March.

4.5 Planning for Deficit Budgets

Schools may only plan for a deficit budget in accordance with the terms of section 4.9 below.

4.6 Charging of Interest on Deficit Balances

The LA will charge interest on any deficit balance. The calculation of interest will be based upon the interest on surplus balances (section 4.3) plus 1%.

4.7 Writing off of Deficits

The LA has no power to write off the deficit balance of any school.

4.8 Balances of Closing and Replacement Schools

When a school closes any balance (whether surplus or deficit) shall revert to the LA; it cannot be transferred as a balance to any other school, even where the school is a successor to the closing school. This is except that a surplus converts to Academy status under Section 4 (1) (a) of the Academies Act 2010.

4.9 Borrowing for Agreed Purposes

WCC Scheme for Financing Schools – January 2013 18 The general provision in paragraph 3.6 above forbidding Governing Bodies to borrow money shall not apply to schemes run by the LA as set out in the following sections 4.11 and 4.12.

4.10 Licensed Deficits

The LA will permit a school , which has no deficit at 31 March 1999 to plan for a deficit budget only in exceptional circumstances. Such circumstances might include where a Governing Body wishes to overcome a demonstrably short-term difficulty. The funding to allow such a deficit budget shall be provided from the collective surplus of school balances held by the LA on behalf of schools

The detailed arrangements applying to this scheme are set out below: -

In exceptional circumstances, with the prior approval of the Director of Children’s Services and the Director of Resources, a school may plan to spend in anticipation of the following year's budget.

Such spending would not normally be allowed to exceed 2% of the school’s own budget allocation.

Approved deficits will be reviewed regularly with a view to the deficit being repaid over a maximum of 2 years, or in exceptional circumstances over a maximum of 5 years.

4.11 Loan Schemes

The LA shall provide a form of loan arrangement for schools, which does not operate by way of a licensed deficit, but rather by way of actual payments to schools or expenditure by the LA in respect of a particular school on condition that a corresponding sum is repaid from the budget share. The same parameters under section 4.10 apply.

The detailed arrangements applying to this scheme are set out in: -

.Utilisation of School Balances - Loan Scheme for Achievement Related Capital Projects.

4.11.1 Credit Union Approach

The LA does not operate a scheme.

4.12 Multi Year Budgets

The LA may inform each maintained school of its estimate of the school’s budget and central government grant income paid by the LA for the relevant number of years and periods if this is specified within the statutory School Funding Regulations. This will be provided in a format determined by the LA. The estimates will use information available to the LA at the time of preparation, will be subject to change in the future as permitted within the Fair Funding regulations and be provisional in nature implying no commitment on the part of the LA to fund schools at the level shown in the estimate.

WCC Scheme for Financing Schools – January 2013 19

The detailed methodology for calculation will be included in the information given to schools on these amounts.

WCC Scheme for Financing Schools – January 2013 20 SECTION FIVE – INCOME

Schools shall be able to retain income except in certain specified circumstances.

5.1 Income from Lettings

Schools may retain income from lettings of the school premises, which would otherwise accrue to the LA, subject to alternative provisions arising from any joint use or PFI agreements. Schools are permitted to cross-subsidise lettings for community and voluntary use with income from other lettings, provided there is no net cost to the budget share. However, schools whose premises are owned by the LA shall be required to have regard to directions issued by the LA as to the use of school premises, as permitted under the SSFA 1998 for various categories of schools.

Income from lettings of school premises may not be paid into voluntary or private funds held by the school.

5.2 Income from Fees and Charges

Schools may retain income from fees and charges except where a service is provided by the LA from centrally retained funds. However, schools are required to have regard to any policy statements on charging produced by the LA.

5.3 Income from Fund-Raising Activities

Schools may retain income from fund-raising activities.

5.4 Income from the Sale of Assets

Schools may retain the proceeds of sale of assets except in cases where the asset was purchased with non-delegated funds (in which case it should be for the LA to decide whether the school should retain the proceeds), or the asset concerned is land or buildings forming part of the school premises and is owned by the LA.

Any sale of land or buildings requires consultation with the LA and in the case of County schools, or where it effects the statutory provision, the LAs consent.

5.5 Administrative Procedures for the Collection of Income

Because of the potential VAT implications of providing services, which lead to fees and charges, fund raising activities and the sale of assets, the LA has established administrative procedures for the collection of income, which are set out in the following documents: -

Financial Procedures and Accounting Instructions.

WCC Scheme for Financing Schools – January 2013 21 5.6 Purposes for Which Income May Be Used

Income from the sale of assets purchased with delegated funds may only be spent for the purposes of the school.

WCC Scheme for Financing Schools – January 2013 22 SECTION SIX – THE CHARGING OF CHOOL BUDGET SHARES

6.1 General Provision

The budget share of a school may be charged by the LA without the consent of the Governing Body only in circumstances set out in 6.2 below.

The LA shall consult a school as to the intention to so charge, and shall notify a school when it has been done.

Schools are reminded that the LA cannot act unreasonably in the exercise of any power given by this scheme, or it may be the subject of a direction under s.496 of the Education Act 1996. The LA shall make arrangements for a disputes procedure for such charges.

6.1.1 Charging of Salaries at Actual Cost

The LA must charge the salaries of school based staff to the budget share of a school at actual cost.

6.2 Circumstances in Which Charges May Be Made

6.2.1 Where premature retirement costs have been incurred without the prior written agreement of the LA to bear such costs (the amount chargeable being only the excess over any amount agreed by the LA).

6.2.2 Other expenditure incurred to secure resignations where the school had not followed LA advice.

6.2.3 Awards by courts and employment tribunals against the LA, or out of court settlements arising from action or inaction by the Governing Body contrary to the LAs advice.

6.2.4 Expenditure by the LA in carrying out health and safety work or capital expenditure for which the LA is liable where funds have been delegated to the Governing Body for such work, but the Governing Body has failed to carry out the required work.

6.2.5 Expenditure by the LA incurred in making good defects in building work funded by capital spending from budget shares, where the premises are owned by the LA, or the school has Voluntary Controlled status.

6.2.6 Expenditure incurred by the LA in insuring its own interests in a school where funding has been delegated but the school has failed to demonstrate that it has arranged cover at least as good as that which would be arranged by the LA. See also section 10.1.

6.2.7 Recovery of monies due from a school for services provided to the school, where a dispute over the monies due has been referred to a disputes procedure set out in a Service Level Agreement (SLA) and the result is that monies are owed by the school to the LA.

WCC Scheme for Financing Schools – January 2013 23 6.2.8 Recovery of penalties imposed on the LA by the Board of Inland Revenue, the Contributions Agency, HM Customs and Excise, Teachers' Pensions, The Environment Agency (for Carbon Reduction Commitment purposes) or regulatory LAs as a result of school negligence.

6.2.9 Correction of LA errors in calculating charges to a budget share (e.g. pension deductions).

6.2.10 Additional transport costs incurred by the LA arising from decisions by the Governing Body on the length of the school day, and failure to notify the LA of non-pupil days resulting in unnecessary transport costs.

6.2.11 Legal costs which are incurred by the LA because the Governing Body did not accept the advice of the LA (see also Section 11.2).

6.2.12 Costs of necessary health and safety training for staff employed by the LA, where funding for training has been delegated but the necessary training not carried out.

6.2.13 Compensation paid to a lender where a school enters into a contract for borrowing beyond its legal powers, and the contract is of no effect.

6.2.14 Cost of work done in respect of teacher pension remittance and records for schools not purchasing LA payroll services. The charge will be the minimum needed to meet the cost of the LAs compliance with its statutory obligations.

6.2.15 Costs incurred by the LA in securing provision specified in a statement of SEN, where the Governing Body or a school fails to secure such provision despite the delegation of funds in respect of that statement.

6.2.16 Costs incurred by the LA due to submission by the school of incorrect data.

6.2.17 Recovery of amounts spent from specific grants on ineligible purposes.

6.2.18 Costs incurred by the LA as a result of the Governing Body being in breach of the terms of a contract.

6.2.19 Costs incurred by the LA or another school as a result of a school withdrawing from a cluster arrangement, for example where this has funded staff providing services across the cluster.

6.2.20 Costs arising from failure to follow Financial Regulations and Audit advice.

6.2.21 Costs of any additional audit required as a result of schools operating their own bank accounts.

6.2.22 In the case of pupils still enrolled at a school but receiving tuition at a Pupil Referral Unit or elsewhere, the schools will be charged in defined circumstances for the service received from the LA.

WCC Scheme for Financing Schools – January 2013 24 SECTION SEVEN – TAXATION

7.1 Value Added Tax (VAT)

The LA has established procedures to enable schools to utilise the LAs ability to reclaim VAT on expenditure relating to non-business activity.

These are set out in separate guidance in the following documents: -

Guidelines on VAT, Handbook for Schools. Financial Procedures and Accounting Instructions.

Amounts reclaimed through these procedures will be passed back to the school.

7.2 Construction Industry Taxation Scheme (CITS)

Schools are required to abide by procedures issued by the LA in connection with CITS. These procedures are as set out in the following documents already sent to schools: -

Financial Procedures and Accounting Instructions.

Guidance on CITS produced by the Revenue Officer, Directorate of Resources.

WCC Scheme for Financing Schools – January 2013 25 SECTION EIGHT – THE PROVISION OF SERVICES AND FACILITIES BY THE LA

8.1 Provision of Services from Centrally Retained Budgets

The LA shall determine on what basis services from centrally retained funds will be provided to schools, but the LA is debarred from discriminating in its provision of services on the basis of categories of schools except where (a) funding has been delegated to some schools only or (b) such discrimination is justified by differences in statutory duties. The term service in this paragraph includes Premature Retirement Costs (PRC) and redundancy payments but excludes centrally funded premises and liability insurance.

8.2 Timescales for The Provision of Services Bought Back from the LA Using Delegated Budgets

The term of any arrangement with a school starting on or after 1 April 1999 to buy services or facilities from the LA shall be limited to a maximum of three years from the inception of the scheme or the date of the agreement, whichever is the later, and periods not exceeding five years for any subsequent agreement relating to the same services. In the case of contracts for the supply of catering services, these may be extended to five and seven years respectively.

When a service is provided for which expenditure is not retainable centrally by the LA under the regulations made under Section 46 of the Act it must be offered at a price, which is intended to generate income, which is no less than the cost of providing those services. The total cost of the service must be met by the total income even if schools are charged differentially.

8.2.1 Packaging

The purchasing of services will be offered in such a way which does not unreasonably restrict schools’ freedom of choice among the services available, and where practicable, this will include purchasing provision on a service-by- service basis as well as in packages of services.

8.3 Service Level Agreements (SLAs)

8.3.1 If services or facilities are provided under a SLA - whether free or on a buyback basis - the terms of any such agreement starting on or after the inception of the scheme will be reviewed at least every three years if the agreement lasts longer than that.

8.3.2 Services, if offered at all by the LA, shall be available on a basis, which is not related to an extended agreement, as well as on the basis of such agreements.

8.3.3 SLAs must be in place by mid February to be effective for the following financial year. Schools will have a maximum of one month from the date of issue to consider the terms of agreement, before signing up for the service for the financial year. The only exception to this would be where a SLA is drawn up for new services bought on an 'as and when' basis. These may be issued during a financial year.

WCC Scheme for Financing Schools – January 2013 26

8.4 Teachers Pensions

In order to ensure that the performance of the duty on the LA to supply Teachers Pensions with information under the Teachers’ Pensions Regulations 1997, the following conditions are imposed on the LA and Governing Bodies of all maintained schools covered by this Scheme in relation to their budget shares.

The conditions only apply to Governing Bodies of maintained schools that have not entered into an arrangement with the LA to provide payroll services.

A Governing Body of any maintained school, whether or not the employer of the teachers at such a school, which has entered into any arrangement or agreement with a person other than the LA to provide payroll services, shall ensure that any such arrangement or agreement is varied to require that person to supply salary, service and pensions data to the LA which the LA requires to submit its annual return of salary and service to Teachers' Pensions and to produce its audited contributions certificate. The LA will advise schools each year of the timing, format and specification of the information required. A Governing Body shall also ensure that any such arrangement or agreement is varied to require that Additional Voluntary Contributions (AVC's) be passed to the LA within the time limit specified in the AVC scheme. The Governing Body shall meet any consequential costs from the school’s budget share.

A Governing Body of any maintained school which directly administers its payroll shall supply salary, service and pensions data to the LA which the LA requires to submit its annual return of salary and service to Teachers' Pensions and to produce its audited contributions certificate. The LA will advise schools each year of the timing, format and specification of the information required from each school. A Governing Body shall also ensure that Additional Voluntary Contributions (AVC's) are passed to the LA within the time limit specified in the AVC scheme. The Governing Body shall meet any consequential costs from the school’s budget share.

WCC Scheme for Financing Schools – January 2013 27 SECTION NINE – PRIVATE FINANCE INITIATIVES/PUBLIC PRIVATE PARTNERSHIPS

The LA shall have the power to issue regulations from time to time relating to Private Finance Initiatives/Public Private Partnerships.

Amongst other issues these may deal with: -

the reaching of agreements with the Governing Bodies of schools as to the basis of charges relating to such schemes.

the treatment of monies withheld from contractors due to poor performance.

the power of the LA to charge to the school’s budget share amounts agreed under a PFI/PPP entered into by the Governing Body of the school.

WCC Scheme for Financing Schools – January 2013 28 SECTION TEN – INSURANCE

10.1 Insurance Cover

If funds for insurance are delegated to any school, the LA will require the school to demonstrate that cover relevant to an LAs insurable interests, under a policy arranged by the Governing Body, is at least as good as the relevant minimum cover arranged by the LA if the LA makes such arrangements, either paid for from central funds or from contributions from schools' delegated budgets.

The LA will have regard to the actual risks, which might reasonably be expected to arise at a school. Guidance on the minimum level of cover required for all schools is available from the County's Insurance Officer.

WCC Scheme for Financing Schools – January 2013 29 SECTION ELEVEN – MISCELLANEOUS

11.1 Right of Access to Information

Governing Bodies shall supply to the LA all financial and other information which might reasonably be required to enable the LA to satisfy itself as to the school's management of its delegated budget share, or the use made of any central expenditure by the LA (e.g. earmarked funds) on the school.

11.2 Liability of Governors

Because the Governing Body is a corporate Body and because of the terms of S.50 (7) of the SSFA 1998, governors of maintained schools will not incur personal liability in the exercise of their power to spend the delegated budget share provided they act in good faith.

11.3 Governors' Expenses

The LA shall have the power to delegate to the Governing Body of a school yet to receive a delegated budget, funds to meet governors' expenses. Only allowances in respect of purposes specified in regulations (Schedule 11 of the SSFA 1998), may be paid to governors from a school's delegated budget share. Schools are expressly forbidden from paying any other allowances to governors. Schools are also barred from payment of expenses duplicating those paid by the Secretary of State to additional governors appointed by him to schools under special measures.

11.4 Responsibility for Legal Costs

Legal costs incurred by the Governing Body, although the responsibility of the LA as part of the cost of maintaining the school (unless they relate to the statutory responsibility of aided school governors for buildings) may be charged to the school's budget share unless the Governing Body acts in accordance with the advice of the LA. As at present, where a conflict of interest is perceived by our Legal Department, they can make available a list of alternative sources of advice. Schools may also seek completely independently advice from other sources other than from the LA.

11.5 Health and Safety

Governing Bodies are required, in expending the school’s budget share, to have due regard to duties placed on the LA in relation to health and safety, and the LAs policy on health and safety matters.

11.6 Right of Attendance for Director of Resources

Governing Bodies are required to permit the Director of Resources of the LA, or any officer of the LA nominated by the Director of Resources, to attend meetings of the Governing Body at which any agenda items are relevant to the exercise of her or his responsibilities. This attendance shall normally be limited to items, which relate to issues of probity or overall financial management and shall not be regarded as routine.

WCC Scheme for Financing Schools – January 2013 30

11.7 Delegation to New Schools

The LA is empowered to delegate selectively and optionally to the Governing Bodies of schools that have yet to receive delegated budgets.

11.8 Optional Delegated Funding

Where a school exercises an option to receive delegated or devolved funding for an item, that option can only be exercised once a year, three months prior to the start of the financial year.

11.9 Special Educational Needs and Educational Inclusion

Schools are expected to use their budget share to: -

Promote high quality learning and high achievement for all. Provide for Special Educational Needs. secure equal opportunities and equal access in Education. Promote lifelong learning opportunities. Meet and exceed agreed educational targets.

The LA reserves the right to suspend delegation where a situation is serious enough to warrant it.

11.10 Whistle Blowing

The LA is committed to the highest possible standards of openness, probity and accountability. In line with this commitment schools have received a model whistle blowing policy that sets out the procedures to be followed by persons working at a school or school governors who wish to complain about financial management or financial propriety at the school and how such complaints will be dealt with.

11.11 Child Protection

Schools shall ensure that they meet their duty to assist LA Children's Services Departments activity on behalf of children in need or enquiries into allegations of child abuse.

Funding to support this duty is contained within existing budget allocations to schools.

11.12 Redundancy and Early Retirement Costs

WCC Scheme for Financing Schools – January 2013 31 The 2002 Education Act sets out how premature retirement and redundancy costs should normally be funded. If the circumstances in which the LA proposes to depart from this these are set out in LA policy. Further guidance is provided at Annex E.

WCC Scheme for Financing Schools – January 2013 32 SECTION 12 – RESPONSIBILITY FOR REPAIRS AND MAINTENANCE

Following the consultation in September 2012 on changes to the new funding formula, County Council Cabinet agreed further delegation of revenue funding for building maintenance and repairs. This funding from within the Dedicated Schools Grant has been retained in the past to support the capital programme.

As a consequence the responsibility for repairs and maintenance in schools will change as follows: -

Community, Voluntary Controlled and Foundation Schools

The County Council will prepare a capital programme for major works at these schools using the asset management information held by Property Services. The projects will be identified in line with the Local Investment Plan approved in December 2011 which identified basic need (additional school places as a consequence of increasing pupil numbers) and condition related works as the priorities.

For condition works the emphasis is on keeping schools safe, open and weather tight and therefore the programme will major on heating, roof, window projects and asbestos works. It is the intention to publish this programme in late February each year when the capital grant from the DfE has been announced and the County Council has approved its budget. If a school has a project listed on the programme the County Council will not be seeking a revenue contribution to these projects but the scope will be defined and approved by officers in the Accommodation Team within Children's Services.

All other repairs and maintenance, suitability works or general improvements are for the school governors and leadership team to plan and fund. The revenue budget will be increased to cover some of these costs and the Devolved Formula Capital is also available. Schools can also consider a loan from the County Council. Information on the loan scheme is available from the finance team in Children's Services

VA Schools

There is no change to the arrangements for VA schools

Academies and Free Schools

Access to capital funding is through the Education Funding Agency (EFA) and information is provided direct or through the web site.

All other repairs and maintenance, suitability works or general improvements are for the school governors and leadership team to plan and fund. The attached Annex F sets out the categories of work which Governing Bodies must finance from their budget shares.

WCC Scheme for Financing Schools – January 2013 33 SECTION 13 – COMMUNITY FACILITIES

13.1 Introduction

Schools which choose to exercise the power conferred by s.27 (1) of the Education Act 2002 to provide community facilities will be subject to a range of controls. First, regulations made under s.28 (2), if made, can specify activities which may not be undertaken at all under the main enabling power. Secondly, the school is obliged to consult its LA and have regard to advice from the LA. Thirdly, the Secretary of State issues guidance to Governing Bodies about a range of issues connected with exercise of the power, and a school must have regard to that.

However, under S.28 (1), the main limitations and restrictions on the power will be those contained in the maintaining LAs scheme for financing schools made under section 48 of the SSFA 1998. Paragraph 2 of Schedule 3 to the Education Act 2002 extends the coverage of schemes to the powers of Governing Bodies to provide community facilities.

Schools are therefore subject to prohibitions, restrictions and limitations in the scheme for financing schools.

This section of the scheme does not extend to joint-use agreements; transfer of control agreements, or agreements between the LA and schools to secure the provision of adult and community learning.

Schools are able to spend their delegated budget for the purpose of community facilities.

Mismanagement of community facilities funds can be grounds for suspension of the right to be a delegate budget.

13.2 Consultation with the LA – Financial Aspects

Section 28 (4) of the Education Act 2002 requires that before exercising the community facilities power, Governing Bodies must consult the local education LA and have regard to advice given to them by their LA.

Schools should inform the LA of their intention to set up a company for the purposes of exercising the community facilities at least 3 months before commencement of any agreement.

The information a school should provide to the LA should include: The purpose for which the company is being established Details of any third party who will be part of an agreement establishing a company for the purposes of exercising community facility powers

The LA may request further details from the Governing Body of the school in relation to the company being established.

The LA will provide the Governing Body with comments on the proposed

WCC Scheme for Financing Schools – January 2013 34 establishment of the company within 15 working days of receipt of information from a Governing Body.

The LA will require schools to inform it of any action that has been taken following LA advice.

13.3 Funding Agreements

The provision of community facilities in schools may depend on the conclusion of a funding agreement with a third party which will either be supplying funding and/or taking part in the provision. The LA requires any such proposed agreement to be submitted to the LA for comments at least 1 month before the start of any such agreement.

The LA does not retain a general power of veto over such agreements, however if an agreement has been or is to be concluded against the wishes of the LA or has been concluded without informing the LA, which in the view of the LA is seriously prejudicial to the interests of the school or the LA, it may constitute grounds for suspension of the right to a delegated budget.

13.4 Other Prohibitions, Restrictions and Limitations

The LA may, in the specific instance of use of the community facility power by a Governing Body, require the Governing Body concerned to make arrangements to protect the financial interests of the LA by either carrying out the activity concerned through the vehicle of a limited company formed for the purpose, or by obtaining indemnity insurance for risks associated with the project in question as specified by the LA.

Section 28 of the Education Act 2002 provides that the exercise of the community facilities power is subject to prohibitions, restrictions and limitations in the scheme for financing schools.

13.5 Supply of Financial Information

The LA may require schools which exercise the community facilities power to provide the LA every six months with a summary statement, in a form determined by the LA, showing the income and expenditure for the school arising from the facilities in question for the previous six months and, on an estimated basis, for the next six months.

The LA, on giving notice to the school that it believes there to be cause for concern as to the school’s management of the financial consequences of the exercise of the community facilities power, may require such financial statements to be supplied every three months and if the LA sees fit, to require the submission of a recovery plan for the activity in question.

13.6 Audit

WCC Scheme for Financing Schools – January 2013 35 The school is required to grant access to its records connected with the exercise of the community facilities power, in order to facilitate internal and external audit of relevant income and expenditure.

In concluding funding agreements with other persons pursuant to the exercise of the community facilities, schools must ensure that such agreements contain adequate provision for access by the LA to the records and other property of the those persons held on the school’s premises, or held elsewhere insofar as they relate to the activity in question, in order for the LA to satisfy itself as to the propriety of expenditure on the facilities in question.

13.7 Treatment of Income and Surpluses

Schools are able to retain all net income derived from community facilities except where otherwise agreed with a funding provider, whether that is the LA or some other person.

Schools are able to carry such retained net income over from one year to the next as a separate community facilities surplus, or, subject to the agreement of the LA at the end of each financial year, transfer all or part of it to the budget share balance.

Any accumulated retained income obtained from exercise of the community facilities power of a community or community special school that the LA ceases to maintain, reverts to the LA unless otherwise agreed with the funding provider.

13.8 Health and Safety Matters

The health and safety provisions of the main scheme extend to the community facilities power.

The Governing Body of a school exercising the community facilities power are responsible of the costs of securing Criminal Records Bureau clearances for all adults involved in community activities taking place during the school day. Governing Bodies are free to pass such costs to a funding partner as part of an agreement with the partner.

13.9 Insurance

It is the responsibility of the Governing Body to ensure adequate arrangements are made for insurance against risks arising from the exercise of the community facilities power taking professional advice, including from the LA, as necessary. Such insurance should not be funded from the school budget share.

The LA is empowered to undertake its own assessment of the insurance arrangements made by a school in respect of community facilities, and if it judges those arrangements to be inadequate, make arrangements itself and charge the resultant costs to the schools. Such costs could not be charged to the school’s budget share.

13.10 Taxation

WCC Scheme for Financing Schools – January 2013 36 Schools should seek advice form the LA and the local VAT office on any issues resulting to the possible imposition of VAT on expenditure in connection with community facilities, including the use of the local VAT reclaim facilities.

For any member of staff employed by the school or LA in connection with community facilities at the school paid from funds held in a school’s own bank account (whether a separate bank account is used for community facilities or not), the school is likely to be held liable for payment of income tax and National Insurance, in line with Inland Revenue rules.

Schools are required to follow LA advice in relation to the Construction Industry Scheme where this is relevant to the exercise of the community facilities power.

13.11 Banking

Schools should either maintain a separate bank account for funds relating to community facilities or, if one account is held for the school, adequate internal accounting controls should maintain a separation of funds.

Banks that can be used are set out in the main scheme under section 3. The provisions outlined in section 3 apply equally to the exercise of the community facilities power, except that a mandate showing the LA as owner of the funds in the account should exempt the community facilities funds if they are in the same account as the budget share.

The provision of the main scheme relating to loans (see section 3) applies equally to the exercise of community facilities power.

WCC Scheme for Financing Schools – January 2013 37 ANNEX A

THE STATUTORY OUTLINE SCHEME

References throughout this statutory guidance to: - “the Act” is to the School Standards and Framework Act 1998. “the authority” means the LA. “the Regulations” are to the School and Early Years Finance (England) Regulations 2012 made under the Act.

The Regulations state that schemes must deal with the following matters: -

The carrying forward from one funding period to another of surpluses and deficits arising in relation to schools’ budget shares.

Amounts which may be charged against schools’ budget shares.

Amounts received by schools which may be retained by their Governing Bodies and the purposes for which such amounts may be used.

The imposition, by or under the scheme, of conditions which must be complied with by schools in relation to the management of their delegated budgets and of sums made available to Governing Bodies by the authority which do not form part of delegated budgets, including conditions prescribing financial controls and procedures.

Terms on which services and facilities are provided by the authority for schools maintained by them.

The payment of interest by or to the authority.

The times at which amounts equal in total to the school’s budget share are to be made available to Governing Bodies and the proportion of the budget share to be made available at each such time.

The virement between budget heads within the delegated budget.

Circumstances in which a local authority may delegate to the Governing Body the power to spend any part of the authority’s non-schools education budget or schools budget in addition to those set out in section 49(4)(a) to (c) of the 1998 Act.

The use of delegated budgets and of sums made available to a Governing Body by the local authority which does not form part of delegated budgets.

Borrowing by Governing Bodies.

The banking arrangements that may be made by Governing Bodies.

WCC Scheme for Financing Schools – January 2013 38 A statement as to the personal liability of governors in respect of schools’ budget shares having regard to section 50(7) of the 1998 Act.

A statement as to the allowances payable to governors of a school which does not have a delegated budget in accordance with the scheme made by the authority for the purposes of section 519 of the 1996 Act.

The keeping of a register of any business interests of the governors and the head teacher.

The provision of information by and to the Governing Body.

The maintenance of inventories of assets.

Plans of a Governing Body’s expenditure.

A statement as to the taxation of sums paid or received by a Governing Body.

Insurance.

The use of delegated budgets by Governing Bodies so as to satisfy the authority’s duties imposed by or under the Health and Safety at Work etc Act 1974.

The provision of legal advice to a Governing Body.

Funding for child protection issues.

How complaints by persons working at a school or by school governors about financial management or financial propriety at the school will be dealt with and to whom such complaints should be made.

Expenditure incurred by a Governing Body in the exercise of the power conferred by section 27 of the 2002 Act.

WCC Scheme for Financing Schools – January 2013 39

ANNEX B

THE FUNDING FRAMEWORK: MAIN FEATURES

Since April 1989 the LA has delegated funding to its schools in accordance with its Local Management of Schools (LMS) scheme as approved by the Secretary of State. Under the terms of the School Standards and Framework Act (SSFA) 1998, LAs were required to draw up a new Fair Funding Scheme for Financing Schools to replace the old LMS scheme. The funding framework, which replaced LMS, is based on the legislative provisions in sections 45-53 of the SSFA 1998.

Under this legislation, LAs determine for themselves the size of their School Budget and LA Budget – although at a minimum a LA must appropriate its entire Dedicated Schools Grant (DSG) to their Schools Budget. The categories of expenditure, which fall within the two budgets, are prescribed under regulations made by the Secretary of State but included within the two, taken together, is all expenditure, direct and indirect, on an LAs maintained schools except for capital and certain miscellaneous items.

LAs may centrally retain funding in the Schools Budget for purposes defined in regulations made by the Secretary of State under s45A of the SSFA 1998. The amounts to be retained centrally are decided by the LA concerned, subject to any limits or conditions (including gaining the approval of their Schools Forum or the Secretary of State in certain instances) as prescribed by the Secretary of State. The balance of the Schools Budget left after deduction of centrally retained funds is termed the Individual Schools Budget (ISB). Expenditure items in the LA Budget must be centrally retained (although earmarked allocations may be made to schools).

LAs must distribute the ISB amongst their maintained schools using a formula, which accords with regulations made by the Secretary of State, and enables the calculation of a budget share for each maintained school. This budget share is then delegated to the Governing Body of the school concerned unless the school is a new school, which has not yet received a delegated budget, or the right to a delegated budget has been suspended in accordance with s51 of the SSFA1998.

The financial controls within which delegation works to be set out in a scheme made by the LA in accordance with s48 of the SSFA.

All proposals to revise the Scheme must be approved by the Worcestershire Schools Forum (WSF), following consultation with all schools maintained by the LA. The LA may apply to the Secretary of State for approval in the event of the WSF rejecting a proposal or approving it subject to modifications that are not acceptable to the LA.

Subject to provisions of this scheme, Governing Bodies of schools may spend budget shares for the purposes of their school. They may also spend budget shares on any additional purposes prescribed by the Secretary of State in regulations made under s50 of the SSFA.

An LA may issue a notice of concern or fully suspend a school's right to a delegated budget if the provisions of the school financing scheme (or rules applied by the scheme) have been substantially or persistently breached, or if the budget share has not been managed satisfactorily. There is a right of appeal to the Secretary of State. A school's

WCC Scheme for Financing Schools – January 2013 40 right to a delegated budget share may also be suspended for other reasons (s17 of the SSFA 1998) but in that case there is no right of appeal.

The LA is obliged to publish each year a statement setting out details of its planned Schools Budget and LA Budget, showing the: -

Amounts to be centrally retained. Budget share for each school. Formula used to calculate those budget shares. Detailed calculation for each school.

After each financial year the LA must publish a statement showing out-turn expenditure at both central level and for each school, and the balances held in respect of each school. Out-turn statements are subject to audit certification by the Audit Commission. Information may be collated and published by the Secretary of State.

The detailed publication requirements for financial statements and schemes are set out in DfE Regulations, but each school must receive a copy of each year's budget and outturn statements so far as they relate to that school or central expenditure.

Regulations also require a LA to publish their scheme and any amendments to it on a web site accessible to the general public by the date any revisions come into force together with a statement that the revised scheme comes into force on that date. The web site address is: - http://www.worcestershire.gov.uk/cms/worcestershire-schools-forum/dfe-regulatory- issues.aspx

WCC Scheme for Financing Schools – January 2013 41

ANNEX C

SCHOOLS TO WHICH THIS SCHEME APPLIES (AS AT 1st JANUARY 2013 – 210)

NURSERY SCHOOLS (1) DFE No

EVESHAM NURSERY 1001

PRIMARY SCHOOLS (167) DFE No

ABBERLEY PAROCHIAL PRIMARY 3000 ALVECHURCH, CROWN MEADOW FIRST 2002 ARELEY KINGS, ST. BARTHOLOMEW’S C.E. PRIMARY 3012 ASHTON-UNDER-HILL FIRST 2006 ASTLEY C.E PRIMARY 3300 BADSEY FIRST 2007 BARNT GREEN ST. ANDREW'S C.E. FIRST 3302 BAYTON C.E. PRIMARY 3001 BELBROUGHTON C.E. PRIMARY & NURSERY 3002 BEOLEY FIRST 2008 BEWDLEY, ST. ANNE’S C.E. PRIMARY 3011 BEWDLEY, PRIMARY 3397 BLAKEDOWN C.E. PRIMARY 3005 BREDON HANCOCK'S ENDOWED FIRST 3306 BRETFORTON FIRST 2012 BROADHEATH C.E. PRIMARY 3008 BROADWAS C.E. PRIMARY 3308 BROADWAY FIRST 2013 BROADWAY, ST. MARY'S R.C. PRIMARY 3309 BROMSGROVE, BLACKWELL FIRST 2022 BROMSGROVE, CATSHILL FIRST & NURSERY 2015 BROMSGROVE, CHARFORD FIRST 2016 BROMSGROVE, FINSTALL FIRST 2017 BROMSGROVE, LICKEY END FIRST 2018 BROMSGROVE, MEADOWS FIRST 2019 BROMSGROVE, MILLFIELDS FIRST 2020 BROMSGROVE, ST.PETER'S R.C. FIRST 3310 BROMSGROVE, SIDEMOOR FIRST & NURSERY 2021 CALLOW END C.E. PRIMARY 3014 CASTLEMORTON C.E. PRIMARY 3017 CHADDESLEY CORBETT ENDOWED PRIMARY 3330 CHURCH LENCH C.E. FIRST 3018 CLAINES C.E. PRIMARY 3019 CLEEVE PRIOR C.E. FIRST 3020 CLENT PAROCHIAL PRIMARY 3022 CLIFTON-UPON-TEME PRIMARY 2032 COOKLEY SEBRIGHT PRIMARY 3016 CROPTHORNE WITH CHARLTON C.E. FIRST 3027 CROWLE C.E. FIRST 3028 CUTNALL GREEN C.E. FIRST 3316

WCC Scheme for Financing Schools – January 2013 42 DEFFORD-CUM-BESFORD C.E. FIRST 3029 DODFORD FIRST 2034 DROITWICH, CHAWSON COMMUNITY FIRST 2036 DROITWICH, ST. JOSEPH'S R.C PRIMARY 3317 DROITWICH, ST.PETER'S C.E. FIRST 3318 DROITWICH, WESTLANDS FIRST 2035 ECKINGTON C.E. FIRST 3038 ELDERSFIELD LAWN C.E. PRIMARY 3039 ELMLEY CASTLE C.E. FIRST 3040 EVESHAM, BENGEWORTH C.E. FIRST 3041 EVESHAM, ST RICHARD'S C.E. FIRST 3042 EVESHAM, ST ANDREWS C.E. FIRST 3043 EVESHAM, ST. MARY'S R.C. PRIMARY 3322 EVESHAM, SWAN LANE FIRST 2041 FAIRFIELD FIRST 2047 FAR FOREST LEA MEMORIAL C.E. PRIMARY 3010 FLADBURY C.E. FIRST 3324 FLYFORD FLAVELL FIRST 5201 GREAT WITLEY C.E. PRIMARY 3328 GRIMLEY & HOLT C.E. PRIMARY 3048 HAGLEY PRIMARY 2055 HALLOW C.E. PRIMARY 3329 HANBURY C.E. FIRST 3049 HANLEY SWAN, ST.GABRIEL’S WITH ST.MARYS C.E.PRIMARY 3051 HARTLEBURY C.E. PRIMARY 3013 HARVINGTON C.E. FIRST 3053 HIMBLETON C.E. FIRST 3056 HINDLIP C.E. FIRST 3057 HONEYBOURNE FIRST 2078 INKBERROW FIRST 2079 KEMPSEY PRIMARY 2080 KIDDERMINSTER, BIRCHEN COPPICE PRIMARY 2905 KIDDERMINSTER, COMBERTON PRIMARY 2907 KIDDERMINSTER, FOLEY PARK COMMUNITY PRIMARY 2908 KIDDERMINSTER, FRANCHE PRIMARY 2910 KIDDERMINSTER, HERONSWOOD PRIMARY 2912 KIDDERMINSTER, OFFMORE PRIMARY 2911 KIDDERMINSTER, ST. AMBROSE RC PRIMARY 3393 KIDDERMINSTER, ST. CATHERINE’S C.E. PRIMARY 3021 KIDDERMINSTER, ST. GEORGE'S C.E. PRIMARY AND NURSERY 3023 KIDDERMINSTER, ST. JOHN'S C.E. PRIMARY 3024 KIDDERMINSTER, ST. MARY'S C.E. PRIMARY 3331 KIDDERMINSTER, ST. OSWALD'S C.E. PRIMARY 3026 KIDDERMINSTER, SUTTON PARK COMMUNITY PRIMARY 3369 LEIGH AND BRANSFORD PRIMARY 2914 LINDRIDGE ST LAWRENCE’S C.E. PRIMARY 3350 MADRESFIELD C.E. PRIMARY 3353 MALVERN PARISH C.E. PRIMARY 3357 MALVERN WELLS C.E. PRIMARY 3359 MALVERN, NORTHLEIGH C.E. PRIMARY 3210 MALVERN, ST. JOSEPH'S R.C. PRIMARY 3358 MALVERN, THE GROVE PRIMARY 3400

WCC Scheme for Financing Schools – January 2013 43 MALVERN, WYCHE C.E. PRIMARY 3074 MARTLEY C.E. PRIMARY 3077 NORTON JUXTA KEMPSEY C.E. FIRST 3081 OFFENHAM C.E. FIRST 3082 OMBERSLEY ENDOWED FIRST 3365 OVERBURY C.E. FIRST 3084 PEBWORTH FIRST 2118 PENDOCK C.E. PRIMARY 3085 PERSHORE, ABBEY PARK FIRST & NURSERY 2119 PERSHORE, CHERRY ORCHARD FIRST 2121 PERSHORE, HOLY REDEEMER R.C. PRIMARY 3368 PINVIN C.E. FIRST 3088 POWICK C.E. PRIMARY 3089 REDDITCH, ABBEYWOOD FIRST 3398 REDDITCH, ASTWOOD BANK FIRST 2127 REDDITCH, BATCHLEY FIRST 2128 REDDITCH, FECKENHAM C.E. FIRST 3091 REDDITCH, HOLYOAKES FIELD FIRST 2131 REDDITCH, MATCHBOROUGH FIRST 2919 REDDITCH, MOON'S MOAT FIRST 2192 REDDITCH, OAK HILL FIRST 2920 REDDITCH, OUR LADY OF MOUNT CARMEL R.C. FIRST 5200 REDDITCH, ROMAN WAY FIRST 2141 REDDITCH, ST. GEORGE'S C.E. FIRST 3092 REDDITCH, ST. LUKE'S C.E. FIRST 3093 REDDITCH, ST. STEPHEN'S C.E. FIRST 3094 REDDITCH, ST.THOMAS MORE R.C. FIRST 5202 REDDITCH, TENACRES FIRST 2136 REDDITCH, THE HARRY TAYLOR FIRST 2130 REDDITCH, WOODROW FIRST 2137 ROMSLEY, ST. KENELM'S C.E. PRIMARY 3097 RUBERY, BEACONSIDE PRIMARY & NURSERY 2197 RUBERY, HOLYWELL PRIMARY & NURSERY 2921 RUBERY, LICKEY HILLS PRIMARY 2901 RUSHWICK C.E. PRIMARY 3098 SEDGEBERROW C.E. FIRST 3099 STOKE PRIOR FIRST 2147 STOURPORT-ON-SEVERN PRIMARY 2902 STOURPORT-ON-SEVERN, BURLISH PARK PRIMARY 2903 STOURPORT-ON-SEVERN, ST.WULSTAN'S R.C. 3380 SYTCHAMPTON ENDOWED FIRST 3381 TARDEBIGGE C.E. FIRST 3382 TENBURY C.E. PRIMARY 3104 THE LITTLETONS C.E. FIRST 3072 TIBBERTON C.E. FIRST 3105 UPPER ARLEY C.E. PRIMARY 3109 UPTON SNODSBURY C.E. FIRST 3108 UPTON UPON SEVERN C.E. PRIMARY 3107 WELLAND PRIMARY 2156 WEST MALVERN ST.JAMES C.E. PRIMARY 3360 WHITTINGTON C.E. PRIMARY 3110 WILDEN, ALL SAINTS' C.E. PRIMARY 3015

WCC Scheme for Financing Schools – January 2013 44 WOLVERLEY SEBRIGHT PRIMARY 3332 WORCESTER, CHERRY ORCHARD PRIMARY 2161 WORCESTER, CRANHAM PRIMARY 2162 WORCESTER, DINES GREEN PRIMARY 2163 WORCESTER, GORSE HILL COMMUNITY PRIMARY 2167 WORCESTER, NORTHWICK MANOR PRIMARY 3401 WORCESTER, NUNNERY WOOD PRIMARY 2172 WORCESTER, OLDBURY PARK PRIMARY 2202 WORCESTER, OUR LADY QUEEN OF PEACE R.C. PRIMARY 3387 WORCESTER, PERDISWELL PRIMARY 2173 WORCESTER, PITMASTON PRIMARY 2200 WORCESTER, RED HILL C.E. PRIMARY 3116 WORCESTER, ST BARNABAS' C.E. PRIMARY 3114 WORCESTER, ST CLEMENT'S C.E. PRIMARY 3388 WORCESTER, ST GEORGE'S C.E. PRIMARY 3389 WORCESTER, ST GEORGE'S R.C. PRIMARY 3390 WORCESTER, ST JOSEPH'S R.C. PRIMARY 3391 WORCESTER, STANLEY ROAD PRIMARY 2179 WORCESTER, THE FAIRFIELD COMMUNITY PRIMARY 3394 WORCESTER, THE LYPPARD GRANGE PRIMARY 2918 WORCESTER, WARNDON PRIMARY 3399 WYCHBOLD FIRST & NURSERY 2187 WYTHALL, MEADOW GREEN PRIMARY 2188

MIDDLE-DEEMED-PRIMARY (5)

DRAKES BROUGHTON ST.BARNABAS C.E.FIRST AND MIDDLE 3208 DROITWICH, WESTACRE MIDDLE 2916 DROITWICH, WITTON MIDDLE 2917 PERSHORE, ABBEY PARK MIDDLE 2906 PINVIN, ST. NICHOLAS' C.E. MIDDLE 3205

WCC Scheme for Financing Schools – January 2013 45

MIDDLE DEEMED SECONDARY SCHOOLS (12)

ALVECHURCH C.E. MIDDLE 4575 BREDON HILL MIDDLE 4400 BROMSGROVE, ASTON FIELDS MIDDLE 4401 BROMSGROVE, CATSHILL MIDDLE 4402 BROMSGROVE, PARKSIDE MIDDLE 4403 BROMSGROVE ST. JOHN'S C.E. FOUNDATION MIDDLE 5404 EVESHAM, BLACKMINSTER MIDDLE 4408 EVESHAM, SIMON DE MONTFORT MIDDLE 4409 EVESHAM, ST. EGWIN'S C.E. MIDDLE 4576 REDDITCH, BIRCHENSALE MIDDLE 4418 REDDITCH, CHURCH HILL MIDDLE 4427 REDDITCH, ST. BEDE'S R.C. MIDDLE 5401

HIGH SCHOOLS (10)

BROMSGROVE, NORTH BROMSGROVE HIGH 4002 BROMSGROVE, SOUTH BROMSGROVE HIGH 4003 EVESHAM HIGH 4006 HAGLEY R.C. HIGH 4800 REDDITCH, KINGSLEY COLLEGE 4438 REDDITCH, ST AUGUSTINE'S R.C. HIGH 5400 TENBURY HIGH 4041 THE BEWDLEY COMMUNITY SECONDARY 4001 WOLVERLEY C.E. SECONDARY 4503 WORCESTER, BLESSED EDWARD OLDCORNE R.C. COLLEGE 5402

SPECIAL SCHOOLS (9)

BROMSGROVE, CHADSGROVE 7015 BROMSGROVE, RIGBY HALL 7001 EVESHAM, THE VALE OF EVESHAM 7011 FORT ROYAL COMMUNITY PRIMARY 7025 REDDITCH, PITCHEROAK 7009 REGENCY HIGH 7024 RIVERSIDES 7022 THE KINGFISHER 7023 THE WYRE FOREST SCHOOL 7026

PUPIL REFERRAL UNITS (PRU)/ SHORT STAY SCHOOL (6) (WITH EFFECT FROM 1st APRIL 2013)

THE BEACON PRIMARY 1105 PERRYFIELDS PRIMARY 1103 THE COACH HOUSE PRIMARY 1113 FOREST OAK SECONDARY 1119 NEWBRIDGE SECONDARY 1120 THE FORGE SECONDARY 1121 ANNEX D

WCC Scheme for Financing Schools – January 2013 46 PROPORTION OF BUDGET SHARE PAYABLE AT EACH INSTALMENT

Schools who operate their own bank account will receive the instalments of their budget share on the following basis: -

The total formula allocation plus any standards fund allocations is divided into twelve monthly instalments.

One third of the April monthly advance is paid to schools bank accounts on 1st April or nearest bank working day.

The balance of the budget share due for April (two thirds) will be paid into school accounts two bank working days before Council’s normal pay date (i.e. two days before 28th monthly or where this falls on a bank holiday or weekend the nearest previous bank working day).

Instalments for May to March will be paid into school accounts two bank working days before Council’s normal pay date (i.e. two days before 28th monthly or where this falls on a bank holiday or weekend the nearest previous bank working day).

WCC Scheme for Financing Schools – January 2013 47 ANNEX E

RESPONSIBILITY FOR REDUNDANCY AND EARLY RETIREMENT COSTS

This guidance note summarises the position relating to the charging of voluntary early retirement and redundancy costs. It sets out what is specified in legislation and provides some examples of when it might be appropriate to charge an individual school’s budget, the central Schools Budget or the LAs non-schools budget.

Section 37 of the 2002 Education Act says -:

(4) costs incurred by the local education authority in respect of any premature retirement of a member of the staff of a maintained school shall be met from the school's budget share for one or more financial years except in so far as the authority agree with the governing body in writing (whether before or after the retirement occurs) that they shall not be so met

(5) costs incurred by the local education authority in respect of the dismissal, or for the purpose of securing the resignation, of any member of the staff of a maintained school shall not be met from the school's budget share for any financial year except in so far as the authority have good reason for deducting those costs, or any part of those costs, from that share.

(6) The fact that the authority have a policy precluding dismissal of their employees by reason of redundancy is not to be regarded as a good reason for the purposes of subsection (5); and in this subsection the reference to dismissal by reason of redundancy shall be read in accordance with section 139 of the Employment Rights Act 1996 (c. 18).

The default position, therefore, is that premature retirement costs must be charged to the school’s delegated budget, while redundancy costs must be charged to the local authority’s budget. In the former case, the local authority has to agree otherwise for costs to be centrally funded, while in the latter case, there has to be a good reason for it not to be centrally funded, and that cannot include having a no redundancy policy. Ultimately, it would be for the courts to decide what was a good reason, but the examples set out below indicate the situations in which exceptions to the default position might be taken.

Charge of dismissal/resignation costs to delegated school budget

If a school has decided to offer more generous terms than the authority’s policy, then it would be reasonable to charge the excess to the school If a school is otherwise acting outside the local authority’s policy

Where the school is making staffing reductions which the local authority does not believe are necessary to either set a balanced budget or meet the conditions of a licensed deficit Where staffing reductions arise from a deficit caused by factors within the school’s control

WCC Scheme for Financing Schools – January 2013 48 Where the school has excess surplus balances and no agreed plan to use these Where a school has refused to engage with the local authority’s redeployment policy

Charge of premature retirement costs to local authority non-schools budget

Where a school has a long-term reduction in pupil numbers and charging such costs to their budget would impact on standards Where a school is closing, does not have sufficient balances to cover the costs and where the central Schools Budget does not have capacity to absorb the deficit Where charging such costs to the school’s budget would prevent the school from complying with a requirement to recover a licensed deficit within the agreed timescale Where a school is in special measures, does not have excess balances and employment of the relevant staff is being/has been terminated as a result of local authority or government intervention to improve standards

Costs of new early retirements or redundancies can also be charged to the central part of the Schools Budget if the Schools Forum agree and the local authority can demonstrate that the “revenue savings achieved by any termination of employment are equal to or greater than the costs incurred”. The Schools Forum must agree to any increase in this budget over the previous financial year. If the Schools Forum does not agree with the local authority’s proposal, then the authority can appeal to the Secretary of State. The Schools Forum would also be involved if the additional expenditure resulted in a breach of the central expenditure limit, whereby central expenditure increases faster than the Schools Budget as a whole.

An example of where a charge to the central Schools Budget might be appropriate would be a school reorganisation. A reorganisation involving the closure of a number of schools would be likely to result in savings because there would be a reduced amount being allocated through the formula for factors such as flat rate amounts to all schools or floor area. If the savings in the formula exceeded the ongoing costs of the VER/redundancy then this would qualify.

It would be possible to consider savings at an individual school level as well, but this needs to be carefully managed so that there are clear ground rules in place for applications, recommendations and approval. It may be sensible to agree criteria for eligibility which are consistent with the general approach as to when costs should be centrally funded. It is important that the local authority discusses its policy with its Schools Forum. Although each case should be considered on its merits, this should be within an agreed framework. It may be reasonable to share costs in some cases, and some authorities operate a panel to adjudicate on applications.

There are clearly difficulties in setting a budget, whether inside or outside the Schools Budget, at a point prior to the beginning of the financial year before schools have set their budgets and made staffing decisions. Local authorities can only make

WCC Scheme for Financing Schools – January 2013 49 a best estimate of what may be needed, based on past experience, local knowledge of the financial position of individual schools and the context of that year’s funding settlement. There are dangers in raising expectations that costs will be met centrally if the budget is set too high, and so an alternative would be to keep the budget tight and use contingency or schools in financial difficulties budgets if there is an unexpected need for staffing reductions and it is not appropriate for delegated budgets to fund VER/redundancy costs. To achieve best use of resources, local authorities should also have an active redeployment policy, to match staff at risk to vacancies.

One of the permitted uses of the contingency is where “a governing body has incurred expenditure which it would be unreasonable to expect them to meet from the school’s budget share” while local authorities are also allowed to retain funding for schools in financial difficulties “provided that the authority consult the schools forum on their arrangements for the implementation of such support.”

Section 37 now states: -

(7)Where a local education authority incur costs—

(a)in respect of any premature retirement of any member of the staff of a maintained school who is employed for community purposes, or

(b)in respect of the dismissal, or for the purpose of securing the resignation, of any member of the staff of a maintained school who is employed for those purposes, they shall recover those costs from the governing body except in so far as the authority agree with the governing body in writing (whether before or after the retirement, dismissal or resignation occurs) that they shall not be so recoverable.

(7B)The condition is that the governing body are satisfied that meeting the amount out of the school’s budget share will not to a significant extent interfere with the performance of any duty imposed on them by section 21(2) or by any other provision of the Education Acts.

(9)Where a person is employed partly for community purposes and partly for other

WCC Scheme for Financing Schools – January 2013 50 purposes, any payment or costs in respect of that person is to be apportioned between the two purposes; and the preceding provisions of this section shall apply separately to each part of the payment or costs.

ANNEX F

WCC Scheme for Financing Schools – January 2013 51

RESPONSIBILITY FOR REPAIRS AND MAINTENANCE

SCHEDULE OF RESPONSIBILITY FOR THE MAINTENANCE OF SCHOOL BUILDINGS

Type Definition School funding LA funding responsibility responsibility Planned Capital The annual capital Nil. Capital Limit All (funded from Maintenance programme. Likely contribution no the DFE Capital (Condition inclusions are major longer required. Maintenance Works) replacement of roof Grant). coverings, doors and Dependent on the windows, boilers, availability of the electrical rewires and grant. associated asbestos removal works amongst others. Revenue Maintenance: reactive Emergency repairs All without limit Nil Unplanned, urgent All without limit Nil repair needs not included in a current programme. This includes asbestos removal works. servicing The cost of the actual All without limit Nil service to components, plant and equipment. Consequential works All without limit Nil recommended following servicing, testing and inspection management Asbestos All surveys, Asbestos of premises inspections and management risks consequential survey works other than programme those described (responsibility to in the next be reviewed in column (LA 2014/15) funding All asbestos responsibility). All works associated works associated with the Annual with a school Capital funded project Programme. Fire Fire Risk Nil Assessment and consequential works. Water (Legionella) All surveys and Nil consequential works.

WCC Scheme for Financing Schools – January 2013 52 Type Definition School funding LA funding responsibility responsibility

Planned Internal and external All without limit Nil maintenance, redecoration and other than associated repairs described above Finishes to ceilings, All without limit Nil walls and floors. Fixtures and fittings All without limit Nil (includes sanitary fittings, science laboratory and Food technology furniture) External works, All without limit Nil boundary walls and fences, car parks playgrounds, roads and paths. Grounds and trees. Repair work designated All without limit Nil as a priority by the school but not included in the Capital Maintenance Programme

WCC Scheme for Financing Schools – January 2013 53 VOLUNTARY AIDED SCHOOLS

RESPONSIBILITY FOR BUILDING AND ENGINEERING MAINTENANCE IN AIDED SCHOOLS

This document applies to temporary and permanent buildings on the school site. It does not apply to County Schools

BACKGROUND

The DfE has reviewed the liabilities and funding arrangements for VA schools and produced the Regulatory Reform (Voluntary Aided Schools Liabilities and Funding) (England) Order 2002. The rules for determining premises liabilities have been simplified.

VA governing bodies are now liable for capital work to the school buildings and playground. LA's are liable for capital work to playing fields and their associated buildings. All revenue work is LA liability but this has in the main been delegated to governing bodies under the Fairer Funding initiatives.

DEFINITION OF CAPITAL AND REVENUE WORKS

REVENUE work describes those repairs that are of a cyclical nature and do not have a significant effect on the life of the building i.e.

Emergency repairs - defined as unforeseen works to keep building users safe or to keep the building watertight or secure. The works are normally required as a result of breakdown of vital services or fabric defects involving risk to occupants or contents.

Urgent repairs - defects whilst not a positive danger, cause some inconvenience to the user and/or may develop into more serious faults if left unattended.

Routine servicing, inspections and testing - this includes all essential repairs identified by the servicing engineer that would normally be categorised as urgent as defined above.

Redecoration

CAPITAL work describes repairs that are of a substantial nature and have a significant life enhancing effect on the building. Capital repairs are grant aided provided that the tendered cost is greater than the deminimus level, currently £2000. The grant is currently 90% of the total cost of the work including fees and VAT. The school has to fund the remaining 10% and all expenditure on work where the total cost is below the deminimus level.

WCC Scheme for Financing Schools – January 2013 54 SCHEDULE OF MAINTENANCE RESPONSIBILITY

REVENUE LIABILITY (defined above)

VA Governing Bodies LA All emergency and urgent works. Property Services will organise BUT NOT FUND asbestos removal (no fees to be charged). The removal of asbestos containing materials can normally be grant aided. All servicing and consequential repairs. Internal and external redecoration (unless part of a capital repair, e.g. external refurbishment). CAPITAL LIABILITY (defined above)

VA Governing Bodies LA The existing buildings and services (internal and external. Those buildings currently known as excepted (kitchens, dining areas, medical/dental rooms, swimming pools, caretakers dwelling houses). Perimeter walls and fences. Playing fields. Playgrounds. Buildings on playing fields and related to their use. Furniture, fixtures and fittings. Large-scale removal of asbestos. Other capital items.

WCC Scheme for Financing Schools – January 2013 55

Written Ministerial Statement on Funding Early Education

1. Today I am announcing indicative revenue funding allocations to local authorities to secure early education places for two year olds from lower income households. This will form part of the Dedicated Schools Grant (DSG) in 2013-14. I am also announcing capital funding allocations for the current financial year.

Revenue funding

2. The government announced in the “Government Response to Supporting Families in the Foundation Years: Consultation on Proposed Changes to Free Early Education and Childcare Sufficiency “ (May 2012), that funding for early education for two year olds will form part of the DSG in 2013- 141. This reflects the fact that early education will become a statutory entitlement for around 20% (130,000) of eligible two year olds2 from September 2013, in the same way as it is for all three and four year olds.

3. Formula details – in 2013-14 the Department is allocating £525m to local authorities and using £9m itself to fund the new programme for early education for two year olds. Local authority allocations have been calculated using an estimated number of eligible two year old children likely to receive provision in each area, using Free School Meals (FSM) data for four to six year olds as a proxy, and including an area cost adjustment. Each local authority’s allocation includes a notional amount for statutory places (which must be funded once the entitlement for 20% of two year olds comes into force from September 2013) and a notional amount for trajectory building which will be used, in the main, to create non-statutory places in preparation for the entitlement for 40% of two year olds (September 2014).

4. Funding rates – the result of the formula is that the Department is allocating funding to local authorities at an average hourly rate of £5.09 for statutory two year old places. This compares favourably to the Daycare Trust Cost Survey 2012 which shows average hourly childcare fees in England are £4.13 per hour for under-twos and £3.95 per hour for children aged two and over.

5. Local funding arrangements – research evidence is clear that high quality early education is critical to the success of the early years programme for two year olds from lower income families. The government expects local

1 https://media.education.gov.uk/assets/files/pdf/g/government%20response%20proposed%20 changes%20to%20free%20early%20education%20and%20childcare%20sufficiency.pdf

2 Eligibility criteria for first phase of the entitlement:1) Looked after children; 2) Children who meet the FSM criteria e.g. from families whose income is below £16,190 and their parents are in receipt of any of the following benefits: Income Support; Income-based Job Seekers' Allowance; Income-related Employment and Support Allowance; Support under Part VI of the Immigration and Asylum Act 1999; the Guarantee element of the State Pension Credit; or Child Tax Credit, provided they have an annual gross income of no more than £16,190, as assessed by Her Majesty’s Revenue and Customs, and are not in receipt of Working Tax Credits (except during the four-week period immediately after their employment ceases, or after they start to work fewer than 16 hours per week).

authorities to fund places in any settings that are rated good or outstanding by Ofsted. Our aspiration is that all eligible two year olds are able to receive early education in good and outstanding provision.

6. We expect local authorities to pass all available funding to providers and not retain any centrally, and to do so using a flat rate with no supplements so that all providers receive the same rate. Stable and sustainable funding rates are vital to give providers the confidence to offer new two year old places. We will increase transparency so that providers and parents will be able to hold local authorities to account on the rate they are offering. For the first time, from 2013-14, local authorities will be required to submit details of the funding rates they pay providers for two, three and four year old places to the Department. This information will be published on the Department’s website and will enable providers and parents to compare rates across the country, particularly between similar local authorities.

7. Participation funding – we see the key role of the local authority as raising awareness of the programme with parents and it is the government’s strong intention to reward local authorities who achieve high levels of take-up by moving to participation funding. This is not possible in 2013, but we intend to do so as quickly as possible from 2015. In the interim, the Department will provide funding to local authorities according to a formula, based on estimated numbers of eligible children. Local authorities will be made aware, in their allocation letters, of the intention to move towards participation-based funding for the new programme at the earliest opportunity.

Capital funding

8. £100 million of capital funding will be allocated in 2012-13 as a contribution to local authorities’ capital budgets. This additional funding may be used for any capital purpose, but it is intended to support implementation of early years education for two year olds from lower income families.

9. Formula details – local authority allocations have been calculated using the estimated number of eligible two year old children in each area (using FSM data for four to six year olds as a proxy) and including a capital specific area cost adjustment.

10. More details about today’s revenue and capital allocations are being sent to local authorities and will be published on the Department’s website at: www.education.gov.uk. Details of today’s announcement can be found at Annex A and copies of the dedicated school grant and capital investment documents will be placed in the House Libraries.

Annex A

Accompanying documents

 A table of local authority revenue and capital investment allocations

 A technical note explaining the methodology used to calculate these allocations

These can be found online at: www.education.gsi.gov.uk

Early Education Funding for Two Year Olds from Lower Income Households

November 2012

Dear Colleague,

1. This week I made a series of announcements on early education funding for two year olds. This letter provides further details on those announcements as well as links to related sections of the Department for Education’s (the Department) website.

Duty to secure free early education for eligible two year olds

2. Free early education will become a statutory entitlement for eligible two year olds from 1 September 2013, with the local authority having a duty to secure provision. Eligibility criteria are set out in The Local Authority (Duty to Secure Early Years Provision Free of Charge) Regulations 2012 (SI 2012/2488), made under Section 7 of the Childcare Act 2006 as amended by Section 1 of the Education Act 20111. Some 130,000 children in England, around 20% of two year olds, are expected to receive free early education from September 2013.

3. The programme will be extended from September 2014 to include around 260,000 children, some 40% of two year olds. The Government recently consulted on proposed eligibility criteria for this extended entitlement. The consultation ended on 15 October 2012, and the Government expects to publish an analysis and conclusion in early 2013.

2013-14 Revenue funding for two year old early education

4. The government announced in the Government Response to Supporting Families in the Foundation Years: Consultation on Proposed Changes to Free Early Education and Childcare Sufficiency (May 2012), that funding for free early education for two year olds will form part of the Dedicated Schools Grant (DSG) from 2013-142. This

1 From 1 September 2013, the duty to secure free early education for two year olds relates to:1) Looked after children; 2) Children who meet the FSM criteria e.g. from families whose income is below £16,190 and their parents are in receipt of any of the following benefits: Income Support; Income-based Job Seekers' Allowance; Income-related Employment and Support Allowance; Support under Part VI of the Immigration and Asylum Act 1999; the Guarantee element of the State Pension Credit; or Child Tax Credit, provided they have an annual gross income of no more than £16,190, as assessed by Her Majesty’s Revenue and Customs, and are not in receipt of Working Tax Credits (except during the four-week period immediately after their employment ceases, or after they start to work fewer than 16 hours per week). 2 https://media.education.gov.uk/assets/files/pdf/g/government%20response%20proposed%20 changes%20to%20free%20early%20education%20and%20childcare%20sufficiency.pdf reflects the fact that from September 2013 free early education for eligible two year olds will be statutory, in the same way as it is for all three and four year olds. Transferring the funding into the DSG integrates funding for all free early education.

5. Local authority allocations for two year old free early education will, alongside funding for three and four year olds, form part of the notional Early Years block within the reformed DSG.

Allocation details

6. In 2013-14 the Department is allocating £525m to local authorities and using £9m itself to support implementation of the new early years programme for two year olds from lower income families.

7. Local authority allocations have been calculated using a formula to divide the funding available between local authorities, based on an estimate of the number of eligible two years olds likely to receive provision in each local authority. The formula estimates the number of eligible children using free school meal data (from the School Census) for four to six year olds as a proxy, multiplied against population estimates for the number of two year olds in each local authority in September 2013. The formula then takes account of different costs in different local areas by using an area cost adjustment (ACA). For details of the formula, see the technical note.

8. Each local authority’s allocation includes a notional amount for statutory places (which must be funded once the entitlement for 20% of two year olds comes into force from September 2013) and a notional amount for trajectory building which will be used, in the main, to create non-statutory places in preparation for the 2014 entitlement for 40% of two year olds. Alongside this is the estimate, drawn from the formula, of the number of eligible two year olds in each local authority based on the 20% entitlement.

9. The allocation has been split in this way to provide maximum transparency for local authorities and providers on the funding allocation each local authority will receive and the number of places this is intended to support. This should enable sensible budget setting to make the most effective use of funding. In particular, this should enable local authorities to set hourly rates in 2013-14 which can be sustained into 2014-15. Stable and sustainable funding rates are vital to give providers the confidence to offer new two year old places.

10. The result of the formula is that the Department is allocating funding to local authorities at an average hourly rate of £5.09 for statutory two year old places. This compares favourably to the Daycare Trust Cost Survey 2012 which shows average hourly childcare fees in England are £4.13 per hour for under-twos and £3.95 per hour for children aged two and over. Local funding arrangements

11. Local authorities will be required from April 2013 to fund two year old places through an Early Years Single Funding Formula (EYSFF). This requirement will be contained in the Schools and Early Years Finance Regulations 2013, which the Department intends to make shortly.

12. Local authorities should work with and consult providers to create their own EYSFF for two year old places, in a similar way to current arrangements for three and four year olds. The National Audit Office report ‘Delivering the free entitlement to education for three and four year olds’ (February 2012) highlighted the complexity of some local formulae. Local authorities are, therefore, strongly encouraged to fund providers on the basis of a flat hourly rate for two year old places with no additional supplements. Following consultation the Government has decided against introducing, through the Finance Regulations, a mandatory quality supplement for providers of two year old early education.

13. The funding allocated contains sufficient flexibility to provide additional support for two year olds with additional educational needs and Special Educational Needs. Funding included in the High Needs Block of the DSG may also be used to support two year olds with additional needs. Local authorities are encouraged to be clear with providers on the additional resource available to meet the needs of these children.

14. Research evidence is clear that high quality early education is critical to the success of the two year old entitlement. The Government expects local authorities to fund places in any settings that are rated good or outstanding by Ofsted. Our aspiration is that all eligible two year olds are able to receive early education in good and outstanding provision.

15. Local authorities are strongly encouraged to pass all available funding to providers to deliver two year old places. This will help create a sustainable, high quality early years offer. Local authorities are also reminded that, from 2013-14, they will be required to secure the permission of the Schools Forum for any early years centrally retained funding.

16. It is important to maximise the transparency of the funding allocated. This is why the Government has published separate notional statutory place and trajectory funding allocations. In addition, from 2013-14 local authorities will be required to submit to the Department details of the funding rates they pay providers for two, three and four year old places. This information will be collected through the new early years proforma as part of the Section 251 financial returns. Once collected, this information will be published on the Department’s website and will enable providers and parents to compare funding rates in different areas. We will also update and expand the early years benchmarking information we publish using the information from the proforma. Future funding allocations

17. The Department is considering the most suitable formula for allocating funding to local authorities for 2014-15 for the 40% entitlement. More information will be made available on this in due course.

18. We see the key role of the local authority as raising awareness of the programme with parents and it is the government’s strong intention to reward local authorities who achieve high levels of take-up by moving to participation funding. This is not possible in 2013, but we intend to do so as quickly as possible, from 2015.

Capital funding

19. £100 million of capital funding will be allocated in 2012-13 as a contribution to local authorities’ capital budgets.

20. This funding is being paid to local authorities under section 31 of the Local Government Act 2003 and is not ring-fenced for the early years programme for two year olds from lower income families. This additional funding may be used for any capital purpose, but it is intended to support implementation of early education for two year olds.

21. Local authority allocations have been calculated using the same formula used for revenue funding to estimate the number of eligible two year old children likely to receive provision in each area. Funding has then been distributed using a capital specific area cost adjustment.

Further Information

22. Further information about the allocations is available at www.education.gov.uk.

Elizabeth Truss MP Parliamentary Under Secretary of State for Education and Childcare 2012-13 Capital and 2013-14 Revenue Allocations - Funding Early Education for Two Year Olds from Lower Income Households

2012-13 Capital 2013-14 Revenue Allocations (£525m) Allocations (£100m) Estimated eligible numbers1 in Statutory Trajectory January Place Building 2 2 1,3 Region LA Name 2013 Funding Allocation Allocated budget North East Darlington 288 £796,850 £312,822 £212,638 Durham 1,304 £3,603,574 £1,414,665 £902,735 Gateshead 509 £1,407,568 £552,573 £356,444 Hartlepool 343 £946,348 £371,511 £237,071 Middlesbrough 658 £1,817,733 £713,593 £470,211 Newcastle upon Tyne 867 £2,396,256 £940,705 £606,814 North Tyneside 486 £1,343,271 £527,332 £340,162 Northumberland 601 £1,660,303 £651,790 £429,487 Redcar and Cleveland 381 £1,052,329 £413,116 £272,216 South Tyneside 440 £1,216,357 £477,509 £301,399 Stockton-on-Tees 571 £1,578,480 £619,668 £391,129 Sunderland 817 £2,256,192 £885,720 £552,914 North West Blackburn with Darwen 491 £1,356,684 £532,597 £365,724 Blackpool 491 £1,355,508 £532,136 £369,098 Bolton 855 £2,412,773 £947,189 £623,904 Bury 448 £1,264,111 £496,256 £323,509 Cheshire East 541 £1,520,022 £596,720 £397,394 Cheshire West and Chester 609 £1,713,197 £672,555 £445,176 Cumbria 813 £2,247,482 £882,301 £581,326 Halton 493 £1,385,717 £543,995 £355,916 Knowsley 534 £1,482,568 £582,016 £381,836 Lancashire 2,628 £7,259,833 £2,850,014 £1,917,510 Liverpool 1,516 £4,205,981 £1,651,154 £1,094,656 Manchester 2,274 £6,416,800 £2,519,062 £1,727,706 Oldham 770 £2,172,528 £852,876 £555,989 Rochdale 683 £1,926,968 £756,476 £493,146 Salford 841 £2,373,840 £931,905 £620,165 Sefton 552 £1,532,629 £601,669 £427,970 St. Helens 521 £1,444,886 £567,223 £379,966 Stockport 543 £1,531,719 £601,312 £391,995 Tameside 703 £1,985,236 £779,350 £518,642 Trafford 430 £1,214,360 £476,725 £320,488 Warrington 402 £1,131,673 £444,264 £287,638 Wigan 801 £2,261,753 £887,903 £566,765 Wirral 834 £2,313,366 £908,165 £614,624 Yorkshire & The Humber Barnsley 705 £1,948,682 £765,000 £482,861 Bradford 1,850 £5,116,089 £2,008,438 £1,266,298 Calderdale 524 £1,450,077 £569,261 £354,969 Doncaster 894 £2,469,429 £969,431 £685,861 East Riding of Yorkshire 482 £1,331,343 £522,649 £348,017 Kingston upon Hull, City of 1,071 £2,959,249 £1,161,721 £781,614 Kirklees 1,118 £3,091,715 £1,213,724 £807,286 Leeds 2,190 £6,058,098 £2,378,245 £1,581,845 North East Lincolnshire 450 £1,242,085 £487,609 £297,628 North Lincolnshire 396 £1,093,125 £429,131 £264,911 North Yorkshire 806 £2,227,388 £874,412 £594,376 Rotherham 657 £1,815,492 £712,713 £449,857 Sheffield 1,404 £3,878,003 £1,522,399 £1,034,841 Wakefield 812 £2,244,907 £881,290 £567,856 York 308 £851,917 £334,439 £231,972 East Midlands Derby 750 £2,072,282 £813,522 £519,130 Derbyshire 1,466 £4,051,014 £1,590,319 £1,036,886 Leicester 1,122 £3,100,508 £1,217,175 £793,597 Leicestershire 987 £2,727,416 £1,070,710 £698,102 Lincolnshire 1,268 £3,503,462 £1,375,364 £887,196 Northamptonshire 1,576 £4,404,889 £1,729,240 £1,173,455 Nottingham 1,138 £3,163,817 £1,242,029 £804,942 Nottinghamshire 1,625 £4,517,244 £1,773,348 £1,137,056 Rutland 46 £125,876 £49,415 £32,904 West Midlands Birmingham 4,657 £12,992,530 £5,100,516 £3,398,671 Coventry 1,138 £3,173,954 £1,246,009 £838,823 Dudley 732 £2,041,311 £801,363 £517,465 Herefordshire 277 £764,610 £300,165 £201,953 Sandwell 1,153 £3,215,789 £1,262,432 £849,879 Shropshire 467 £1,290,055 £506,441 £337,224 Solihull 411 £1,145,712 £449,776 £299,703 Staffordshire 1,466 £4,049,291 £1,589,642 £1,036,445 Stoke-on-Trent 920 £2,542,131 £997,972 £657,599 Telford and Wrekin 508 £1,402,787 £550,696 £359,053 Walsall 943 £2,631,835 £1,033,187 £667,160 Warwickshire 921 £2,596,466 £1,019,302 £686,312 Wolverhampton 915 £2,552,028 £1,001,857 £660,694 Worcestershire 992 £2,741,597 £1,076,277 £724,127 East of England Bedford 361 £1,035,678 £406,579 £268,781 Central Bedfordshire 449 £1,287,779 £505,547 £348,738 Cambridgeshire 1,045 £3,009,967 £1,181,631 £833,396 Essex 2,616 £7,490,826 £2,940,695 £2,027,366 Hertfordshire 2,261 £6,755,031 £2,651,842 £1,836,818 Luton 723 £2,075,634 £814,838 £576,761 Norfolk 1,668 £4,608,525 £1,809,182 £1,267,426 Peterborough 612 £1,762,094 £691,751 £474,078 Southend-on-Sea 464 £1,293,493 £507,790 £355,820 Suffolk 1,293 £3,571,640 £1,402,129 £1,001,715 Thurrock 443 £1,334,126 £523,742 £343,379 Inner London City of London 7 £29,578 £11,611 £6,617 Camden 663 £2,294,876 £900,906 £598,388 Hackney 1,028 £3,559,773 £1,397,470 £928,210 Hammersmith and Fulham 585 £2,027,028 £795,756 £528,547 Haringey 882 £2,656,027 £1,042,684 £736,659 Islington 884 £3,059,151 £1,200,940 £797,673 Kensington and Chelsea 309 £1,068,789 £419,578 £278,687 Lambeth 1,125 £3,894,409 £1,528,840 £1,015,466 Lewisham 1,132 £3,920,980 £1,539,271 £1,022,395 Newham 1,210 £3,642,365 £1,429,894 £1,010,223 Southwark 1,301 £4,504,571 £1,768,373 £1,174,566 Tower Hamlets 1,336 £4,627,227 £1,816,524 £1,206,548 Wandsworth 894 £3,093,763 £1,214,528 £806,698 Westminster 653 £2,262,519 £888,204 £589,951 Outer London Barking and Dagenham 1,065 £3,206,382 £1,258,739 £889,302 Barnet 940 £2,966,150 £1,164,430 £785,387 Bexley 524 £1,577,356 £619,227 £437,485 Brent 1,057 £3,333,154 £1,308,506 £882,564 Bromley 668 £2,011,521 £789,669 £557,903 Croydon 1,211 £3,646,234 £1,431,413 £1,011,296 Ealing 1,064 £3,356,379 £1,317,624 £888,713 Enfield 1,316 £3,961,096 £1,555,019 £1,098,625 Greenwich 996 £3,447,729 £1,353,485 £898,995 Harrow 525 £1,654,541 £649,528 £438,095 Havering 506 £1,522,235 £597,588 £422,197 Hillingdon 757 £2,386,826 £937,003 £631,992 Hounslow 780 £2,460,525 £965,936 £651,506 Kingston upon Thames 289 £911,614 £357,875 £241,380 Merton 501 £1,581,080 £620,689 £418,644 Redbridge 828 £2,494,142 £979,133 £691,759 Richmond upon Thames 314 £990,571 £388,871 £262,287 Sutton 460 £1,451,840 £569,953 £384,423 Waltham Forest 951 £2,863,299 £1,124,054 £794,147 South East Bracknell Forest 205 £641,646 £251,893 £169,666 Brighton and Hove 517 £1,429,400 £561,144 £421,653 Buckinghamshire 686 £2,082,992 £817,726 £536,851 East Sussex 981 £2,710,305 £1,063,992 £789,662 Hampshire 2,153 £6,223,088 £2,443,016 £1,651,964 Isle of Wight 259 £749,417 £294,201 £200,888 Kent 3,095 £8,706,561 £3,417,960 £2,468,296 Medway 684 £1,902,603 £746,910 £560,659 Milton Keynes 676 £2,060,064 £808,726 £514,015 Oxfordshire 1,148 £3,368,615 £1,322,427 £872,334 Portsmouth 617 £1,783,665 £700,219 £459,561 Reading 448 £1,369,767 £537,733 £357,238 Slough 450 £1,408,249 £552,841 £355,447 Southampton 713 £2,061,249 £809,190 £547,173 Surrey 1,717 £5,373,166 £2,109,360 £1,433,702 West Berkshire 252 £770,582 £302,509 £200,969 West Sussex 1,254 £3,537,705 £1,388,807 £1,000,411 Windsor and Maidenhead 203 £634,635 £249,140 £167,812 Wokingham 193 £588,745 £231,125 £150,649 South West Bath and North East Somerset 248 £717,947 £281,847 £201,874 Bournemouth 340 £946,215 £371,458 £278,841 Bristol, City of 1,375 £3,973,304 £1,559,812 £1,117,224 Cornwall 936 £2,587,081 £1,015,618 £732,627 Devon 1,179 £3,257,973 £1,278,992 £913,743 Dorset 566 £1,575,409 £618,463 £451,482 Gloucestershire 1,015 £2,854,463 £1,120,585 £809,784 Isles of Scilly 1 £3,229 £1,268 £879 North Somerset 378 £1,092,291 £428,804 £301,446 Plymouth 696 £1,922,062 £754,549 £533,835 Poole 243 £675,326 £265,115 £197,187 Somerset 904 £2,498,070 £980,675 £693,815 South Gloucestershire 439 £1,268,517 £497,986 £356,685 Swindon 503 £1,425,387 £559,569 £400,859 Torbay 320 £883,982 £347,027 £252,739 Wiltshire 726 £2,058,668 £808,177 £573,493

1. See explanatory note for further information. 2. Allocations have been weighted using the General Labour Market Area Cost Adjustment. 3. Allocations have been weighted using the Building Cost Information Service (BCIS) 2011 Location Factors.

Figures have been rounded to the nearest whole number, therefore totals may not match the sum of constituent parts. Funding Early Education for Two Year Olds from Lower Income Households – local authority allocations

Formula

How does the formula work?

These allocations have been calculated using a formula, based on the number of four-six year olds eligible for free school meals, to estimate the number of eligible two year olds in each LA. This formula first estimates the proportion of two year olds eligible for the new criteria for free entitlement and then multiplies this by the projected population of two year olds in each local authority. The result is then weighted by an Area Cost Adjustment (ACA), which takes into account the different costs in different parts of the country. The technical note contains more information.

Has the Department adjusted funding to reflect different costs across the country?

Yes. Both the revenue and capital allocations include an area cost adjustment. We use the same estimated pupil count for both capital and revenue funding, although we use different ACA: for capital we use the Building Cost Information Service (BCIS) ‘location factors’ and for revenue we use the general labour market ACA modelled by DCLG.

How will LAs be funded in 2014-15?

No decision has been taken, but funding will be allocated on a formula basis and not on participation levels. We will move to participation funding as soon as we are able.

Does the number of children information replace the previously published HMRC data?

They are for different purposes. HMRC data was published, most recently alongside the consultation in July on extending eligibility to more children from September 2014, as an estimate only to guide local authority planning. The limitations of the data were made clear at the time of publication. The new estimates are based on a more robust data source. They estimate the number of children likely to take up provision, rather than the HMRC estimate of the number eligible to do so – this means that they are lower, reflecting that not all parents of eligible children will wish to take up places.

Revenue

Is the funding ring-fenced?

The funding is part of the Dedicated Schools Grant (DSG) which is ring-fenced for education purposes for children aged 2-16. The two year old funding allocated is not ring-fenced for use on two year olds. Local authorities are responsible for taking decisions on the use of DSG, in consultation with their Schools Forums.

What can the funding be spent on?

Funding is intended to support delivery of the two year old entitlement from September 2013, as well as building towards the extended entitlement from September 2014. However, decisions on the use of DSG are for local authorities. The use of the DSG is governed by regulations. New School and Early Years Finance Regulations will shortly be made for 2013-14.

What reporting mechanisms are you expecting of LAs?

Local authorities will, as with other areas, be expected to submit section 251 financial returns. In addition, from 2013-14, local authorities will be required to complete the new early years proforma, giving details of their spending for two, three and four year old free early education.

What hourly rate will providers receive?

Decisions about hourly rates are for local authorities to take. However, local authorities are strongly encouraged to pass all available funding to providers to deliver two year old places. This will help create a sustainable, high quality early years offer.

What if take up is lower than expected in my LA – will funding be reclaimed?

Funding will not be reclaimed. However, local authorities are encouraged to maximise take up of the entitlement by eligible children. The Department intends to move to full participation funding to local authorities (as for three and four year olds) as soon as is possible.

What if take up is higher than expected in my LA? – can I get more funding?

The available funding has been allocated. Other in exceptional circumstances the Department will not consider additional funding to any local authority. The allocations allow for full-year funding, even though the duty to secure places starts only in September 2013.

What is the difference between place based and trajectory funding allocations?

The revenue allocations are constructed of two elements. The first is place based funding. This is a notional amount for statutory places which must be funded once the entitlement for 20% of two year olds comes into force from September 2013. The second is trajectory building. This is a notional amount to be used, in the main, to create non-statutory places in preparation for the 2014 entitlement for 40% of two year olds. Capital

Is the funding ring-fenced?

No. Funding will be paid under Section 31 of the Local Government Act 2003, which means it is not ring-fenced.

When does it need to be spent by?

Use of the funding is not time-bound, so there is no deadline by which allocations need to be spent.

What reporting mechanisms are you expecting of LAs?

Local authorities will not be asked to report on their spending. Authorities will not, therefore, be asked to provide, for example, end year outturn information.

What can the funding be spent on?

The funding is intended to support capital investment necessary to deliver the entitlement for two year olds. It can however be spent by local authorities on any capital purpose. APPENDIX E

PROPOSED USE OF TRAJECTORY BUILDING FUNDING

Amount Purpose £ 53,000 Support NEF Team costs 60,000 High Needs SEN supplement 330,000 Age appropriate resources: for settings planning to either take 2 year olds or for settings offering places to 'younger' two year olds for the first time: - Changing stations (£800 per setting) Toys, equipment and games (£2,000 per setting) Sleeping equipment and bedding/cushions (£500 per setting) 171,000 Supplement for setting with more than 12 funded two year olds to support staffing rations/sustainability (30 out of 220 settings on average) 50p per hour, per child 170,000 Bespoke training: such as child development and managing behaviour, plus backfill to cover staffing ratios (all eligible children should be able to access free entitlement in good/outstanding setting) 285,000 Discretionary places, such as GRT children (15 children), children with complex additional needs (to be included in 2014/15 offer), children 'at risk' Cost TBC Data system to be developed

AGENDA ITEM 11 WORCESTERSHIRE SCHOOLS FORUM 11th JANUARY 2013 URN URN DFE Pre Post Number Academy Name Name of Predecessor School conversion conversion Phase Open Local Authority 8855403 Prince Henry's High School N/A 117000 136469 Secondary Mar-11 Worcestershire 8854432 Christopher Whitehead Language College N/A 116978 136890 Secondary Jul-11 Worcestershire 8854435 The Chantry School Martley, The Chantry High School 116980 136897 Secondary Jul-11 Worcestershire 8854010 Haybridge High School and Sixth Form N/A 116933 136898 Secondary Jul-11 Worcestershire 8854017 Woodrush Community High School N/A 116937 136924 Secondary Jul-11 Worcestershire 8854030 Pershore High School N/A 116943 136925 Secondary Jul-11 Worcestershire Droitwich Spa High School and Sixth Form 8854005 College Droitwich Spa High School 116931 136927 Secondary Jul-11 Worcestershire 8852153 Suckley Primary School Suckley Primary School 116741 136983 Primary Aug-11 Worcestershire 8852105 Great Malvern Primary School Great Malvern Primary School 116709 136984 Primary Aug-11 Worcestershire 8854434 Nunnery Wood High School N/A 116979 137051 Secondary Aug-11 Worcestershire 8854500 Hanley Castle High School N/A 116981 137101 Secondary Aug-11 Worcestershire The Stourport High School and Sixth Form 8854004 Centre N/A 135039 137162 Secondary Aug-11 Worcestershire 8854437 Trinity High School and Sixth Form Centre N/A 132819 137167 Secondary Aug-11 Worcestershire 8853354 St Matthias Church of England Primary School St Matthias Church of England Primary School 116899 137185 Primary Aug-11 Worcestershire 8854801 Dyson Perrins CofE Sports College Dyson Perrins CofE Sports College 116995 137186 Secondary Aug-11 Worcestershire 8852204 Somers Park Primary School N/A 116772 137292 Primary Aug-11 Worcestershire 8854028 The Chase N/A 116942 137625 Secondary Nov-11 Worcestershire 8852915 Coppice Primary School Hollywood, the Coppice Primary School 116777 137697 Primary Dec-11 Worcestershire 8852904 Lickhill Primary School N/A 135044 137825 Primary Feb-12 Worcestershire 8852134 The Vaynor First School N/A 116727 137960 Primary Apr-12 Worcestershire 8852135 Webheath First School Academy N/A 116728 138026 Primary Apr-12 Worcestershire 8854501 King Charles I Secondary School N/A 135060 138032 Secondary Apr-12 Worcestershire 8854754 Bishop Perowne CofE College N/A 116993 138107 Secondary May-12 Worcestershire Middle Deemed 8854436 Woodfield Academy Woodfield Middle School 132818 138208 Secondary Jun-12 Worcestershire 8854007 Baxter College N/A 135062 138660 Secondary Sep-12 Worcestershire

8854044 Waseley Hills High School and Sixth Form Centre N/A 116951 138664 Secondary Sep-12 Worcestershire 8854422 Ridgeway Middle School Middle Deemed Worcestershire Ridgeway Middle School 116971 139029 Secondary Dec-12

POTENTIAL FURTHER CONVERSIONS

Honeybourne First Lickey Hills Primary May-13 Alvechurch CE Middle Birchensale Middle Walkwood Middle School Jan-12 North Bromsgrove HS South Bromsgrove HS DFE Predecessor Number URN Academy Name Name of Predecessor School(s) School URN(s) Phase Open Local Authority Lead Sponsor

8856905 135913 Tudor Grange Academy Worcester Elgar Technology College 116977 Secondary Sep-09 Worcestershire Tudor Grange Academy Solihull Arrow Vale Community High School - A Specialist Sports 8854008 138505 Arrow Vale RSA Academy College 116946 Secondary Sep-12 Worcestershire Royal Society of Arts (RSA) Perry Wood Primary and Nursery Perry Wood Primary and Nursery 8852000 139001 School School 134922 Primary Dec-12 Worcestershire Griffin Trust

FURTHER CONVERSION

The Harry Taylor First Sep-13 Ipsley Middle Jan-12

MINUTES OF THE MEETING OF THE WORCESTERSHIRE SCHOOLS FORUM (WSF)

Friday 11th January 2013 In the Council Chamber, County Hall

The meeting started at 2.05 pm

IN ATTENDANCE:

WSF Members

Marian Barton (Chair) - Trinity High School Elizabeth Spencer - St. Richards CE First School Marian Gager - Evesham Nursery School Lawrence Gittins - St. John's CE Primary Paul Kilgallon - St. Barnabas First and Middle School Caroline Hoddinott - Haybridge High School (until 3.30pm) Jane Long - Fort Royal Community Primary School David Hargreaves (Vice Chair) - Governor, Redditch Peter Ingham - Governor, Wyre Forest June Longmuir - Governor, Bromsgrove David McIntosh - Governor, Wyre Forest Mary White - Governor, Bromsgrove Jeff Robinson - Governor, Malvern Hills Sean Devlin - Archdiocese of Birmingham Steve Baker - Union Representative Deborah Andrews - 14-19 Partnership Tricia Wellings - PVI Sector

Local Authority (LA) Officers

Andy McHale - Children’s Services Trish Mallinson - Children's Services

Local Authority Members

Councillor Jane Potter - Cabinet Member with Responsibility for Education and Skills

1. WELCOME

The Chair welcomed Julie Lessiter from the Education Funding Agency (EFA) to the meeting in the Observer category.

2. APOLOGIES

Debbie Mitchell - Clifton-upon-Teme Primary School Julie Reilly - The Bewdley School and Sixth Form Centre Malcolm Richards - Governor, Bromsgrove Paul Newell - Governor, Worcester City

1 Sid Barkas - PVI Sector Stephanie Simcox - Children's Services

3. MINUTES OF THE LAST MEETING (29th NOVEMBER 2012)

Agreed except that Sid Barkas needed to be recorded under apologies.

4. MATTERS ARISING

4.1 Under 7.2 (a) Andy advised he would endeavour to get feedback on the further all party meeting.

4.2 Under 10.2 Trish advised this would be discussed under Agenda Item 5b).

5. ANY OTHER BUSINESS

Following a query from a member of the WSF Andy confirmed the LA was in the process of arranging the working group for the High Needs Pupils development work.

6. SCHOOL FUNDING SETTLEMENT 2013-14

6.1 Dedicated Schools Grant (DSG)

(a) Andy introduced the report which confirmed DSG settlement received on 19th December 2012. The notified DSG is £350.560m with an analysis within the report and in its Appendix A.

(b) The key issues for the DSG settlement are as follows: - The distribution of the DSG to LAs will continue to be based on the current 'spend-plus' methodology for 2013-14. The presentation of the settlement has been changed to show three spending blocks for each LA – Early Years, Schools and High Needs. The blocks represent what was anticipated except for the Schools Block where there is a reduction of just over £0.4m reflecting a reduction in pupil numbers. The baselines of LA's have been adjusted to reflect the incidence of high needs pupils and places supported by each LA. The underlying school budget will be kept at flat cash per pupil for 2013-14. The DfE will continue with a Minimum Funding Guarantee (MFG) that ensures no school sees more than a 1.5% per pupil reduction in 2013-14 budgets (excluding sixth form funding) compared to 2012-13 and before the Pupil Premium is added. Funding is also included for early education places for 2-year-olds from lower income households. Funding for NQT statutory induction of NQTs, currently included in Local Government Revenue Funding, is now within the DSG so that it can be delegated directly to all schools through local funding formulae. There will have to be some adjustments to the units of resource already submitted to the EFA in October 2012 for the mainstream formula. LAs have until 22nd January 2013 to change and submit their final proformas. LA is required to confirm by 25th January 2013 the growth in High Needs place numbers and Hospital School provision.

2  This represented the monitoring and assessment for teachers and not the existing delegation in the local formula. The existing delegation would change to be part of pupil led funding from April 2013.  The charging for the current LA central service is based upon an amount per school and any delegation would have to be part of the new simplified formula. The WSF debated the issues for a lump sum and pupil led model. It was noted that existing Training Schools had not expressed an interest in taking on this quality assurance role. The delegation of the additional DSG was put to a vote to the School Members.

RESOLVED – That on the majority vote, with 9 in favour and 2 against, the additional £105,000 be delegated to schools on a per pupil basis.

(d) On the new national system for the Copyright Licence Agreement for schools: - Trish advised the DfE have procured a single national arrangement for copyright and sheet music for three years from April 2013. However, this was potentially based upon the budget in LAs statutory section 251 budget returns which includes other licences such as performing rights and TV. The estimated national charge for Worcestershire is £135,000 whereas the current budget provision for the licences covered by the national agreement is £70,000. The result is a significant shortfall and budget pressure in the DSG. The WSF raised concerns that no consultation had taken place on this and that there was a duty to procure value for money services by LAs and schools that had not taken place by the DfE. The LA will need to remove the budget provision they have made for these licences from the ISB and, where appropriate, from the amounts de-delegated, before submitting their proformas due on 22nd January.

(e) On the Pupil Premium the level of funding for 2013-14 for disadvantaged (based upon FSM Ever 6) and LAC pupils is £900 per pupil and £300 for Service Children. The indicative allocation for Worcestershire is £12.9m.

RESOLVED – The WSF authorised: -

The submission of the revised mainstream school proforma by 22nd January; and The completion of the DfE returns for High Needs Pupils by 25th January.

6.2 Education Services Grant (ESG)

(a) Trish advised on the new arrangements in 2013-14 for the LA LACSEG to be replaced by a new Education Services Grant (ESG) as follows: - Funding will be transferred from LAs on a per pupil basis at a national rate of £116 per pupil in mainstream schools and £436 in PRU's and £495 in Special Schools. LAs will receive £116 per pupil for pupils in the schools they maintain, plus £15 per pupil for all pupils in the LA area for their retained statutory duties. As a transitional protection, the DfE will set the ESG rate for academies at £150 in 2013/14 and £140 in 2014/15. This protection will be funded from the DfE budget and not from the funding transferred from Local Government. The transitional protections for academies will be removed from the system over a

3 limited period of time so that the rates for LAs and academies are brought together.

(b) The County Council only spends £101 per pupil on the designated central services but the DfE will reduce the County Council's budget by £116 per pupil in mainstream academies thereby losing £15 per pupil more. This will therefore be another pressure on the LA budget.

(c) The WSF noted that this has implications for both maintained schools and academies and that the ESG will be confirmed during early 2013.

6.3 Pupil Growth Fund and School Specific Contingency (SSC)

Pupil Growth Fund

(a) On its operation Andy advised on the key aspects: - LAs are now able to create a growth fund from the DSG in advance of allocating school budget shares. The growth fund needs to be ring-fenced so that it is only used for the purposes of supporting growth in pupil numbers to meet basic need and will be for the benefit of both Maintained Schools and Academies. Any funds remaining at the end of the financial year must be added to the following year’s DSG and reallocated to Maintained Schools and Academies through the local formula. LAs are required to produce criteria on which any growth funding is to be allocated. LAs will need to propose the criteria to their Schools Forum and gain its agreement before growth funding is allocated. The LA will also need to consult their Schools Forum on the total sum to be top- sliced and must regularly update the Schools Forum on the use of the funding. The WSF noted that the initial impact is likely to be in the primary phase but the scheme would apply to all schools.

(b) On the criteria: - The WSF were requested to consider the 'Guiding Principles' in the report. The WSF agreed for additional funding to be made available in the circumstances detailed in the report where the LA has carries out a formal consultation and approves to increase the capacity of a school or requests schools to increase their PAN and the school has the capacity. The WSF also felt that this needed to include the LA requesting schools to admit significant additional pupils resulting from a school closure.

(c) On the options for making Allocations:- The WSF felt that this needed to be based on the age AWPU for the qualifying period but needed to be on actual numbers not a PAN increase as this could fund surplus places and be contrary to the requirement for pupil led funding.

RESOLVED – The WSF agreed to: -

The 'Guiding Principles' as qualifying criteria as detailed in the report extended to include the potential implications for some schools in respect of school closure.

4 That on the majority vote, with 10 in favour and 1 abstention, that Option 3 be agreed as the allocation methodology.

School Specific Contingency (SSC)

(a) The WSF noted: - The formal definition of qualifying expenditure for the SSC and that it only applies to maintained schools. That the Autumn Term 2012 consultation supported the de-delegation of this from maintained schools to support potential allocations as detailed in the report.

(b) This arrangement would not include the current central DSG budget for Schools in Financial Difficulty, which would be delegated as agreed as part of the Autumn Term 2012 consultation and the existing scheme would cease.

RESOLVED – The WSF approved the use of the SSC for the limited range of circumstances for: -

Exceptional unforeseen costs which it would be unreasonable to expect governing bodies to meet. Additional costs relating to new, reorganised or closing schools.

Budgetary Implications

The WSF noted the existing budget of £0.7m and that an assessment of the level required for 2013-14 had been carried out.

RESOLVED – The WSF agreed to budget provision as detailed in the report of: -

Pupil Growth Fund of £0.2m for Maintained Schools and Academies only. SSC Fund of £0.2m for Maintained Schools only. Additional delegation to schools of £0.3m.

7. SCHOOL FUNDING REVIEW UPDATE

7.1 DfE Invitation to WCC

(a) The WSF noted the invitation received from the DfE and the response from the LA for inclusion in the review.

(b) Andy advised it was likely that the DfE would want to engage directly with the WSF. The Chair of the WSF and the Chair of the Worcestershire Association of Governors had already agreed to be part of the discussions. Other WSF members were requested to contact the Clerk if they wished to be part of the DfE fieldwork visit.

7.2 F40 Group Analysis

The WSF noted the f40 document and thought it was an excellent summary of the issues arising from the new national arrangements and low funded LAs.

5 8. THE SCHOOL AND EARLY YEARS FINANCE (ENGLAND) REGULATIONS 2012

8.1 The WSF noted the revised regulations introduced to underpin the new national funding arrangements for schools.

9. THE MANAGEMENT OF SURPLUS BALANCES 2012-13

9.1 The WSF noted the existing requirements for schools in the maintained sector within the existing Scheme for Financing Schools and the need to collect relevant information.

9.2 It was confirmed the challenge process had not led to claw back of balances previously.

10. CHANGES TO THE WORCESTERSHIRE SCHEME FOR FINANCING SCHOOLS

10.1 Andy advised on the requirements to amend the existing Scheme for Financing Schools that applies to maintained schools. This was due to a combination of changes to the DfE statutory guidance and DfE directed revisions as listed in the report.

10.2 The WSF were reminded that the LA proposes changes to the Scheme and is required to consult Governing Bodies and the Headteacher of every school covered by the Scheme. It is the Schools Forum that approves any changes to the Scheme and the DfE adjudicates where Schools Forum does not agree with the LA proposal. The key issues discussed were as follows: -

(a) The WSF considered the current provisions in the Scheme for the management of surplus balances and the proposals to relax those provisions. Andy advised the DfE have requested LAs to consider relaxing or removing such provisions from their Schemes.

(b) Some members of the WSF felt that such a move was appropriate as: - The current challenge leads schools to review their financial management practices and allows for forward planning. Carry forwards have increased due to specific year end allocations. Schools need a buffer for unforeseen circumstances. The current system of 5% for secondary schools is unfair. The current system has been operating for some time without the need for claw back as schools have plans some over the medium to long term which are scrutinised and justified. Academies are not subject to these provisions and have carry forward tolerances at much higher levels, although it was recognised their external audit arrangements were rigorous.

(c) Other members of the WSF felt the existing controls were necessary: - For continuing public accountability. As the current high level of balances being at variance with the arguments for the low funding base of the LA As fairness to pupils was paramount.

RESOLVED – The WSF approved the proposed Scheme changes in the report be circulated for consultation to maintained schools as required.

6 11. FREE NURSERY EDUCATION FOR 2 YEAR OLDS

11.1 The WSF noted the key issues in the report on the offer for 2013/14 and 2014/15; the revenue funding of £3.82m being part of the DSG split between places of £2.74m and trajectory funding of £1.08m. There was also capital funding of £0.74m. It was further noted over time that more funding would be place led rather than trajectory funding as the number of children having an entitlement increased.

11.2 The WSF were requested to consider the proposals for: -

(a) The hourly rates recommended of £5.00 per hour for EY settings except childminders at £4.50.

(b) Trajectory funding with some of it to support children with complex needs by adding a supplement of £1.44 per hour for enhanced and £2.70 per hour for statutory assessment to the hourly rate.

11.3 The WSF raise issues on the capacity to provide places for up to 40% of two year olds from September 2014 and what happens if this demand cannot be met.

11.4 Andy advised that as part of the process for EY changes an electronic consultation had been undertaken with the Early Years Reference Group. Two replies had been received supporting the issues in the report but there were some issues raised on the process for the capital spend.

RESOLVED – The WSF agreed to: -

The proposed hourly rate of £5.00 to be paid to early years providers for eligible 2 year olds from 2013-14, except for child minders to be set at £4.50. The SEN supplement to be paid to early years providers for enhanced (£1.44 per hour) or statutory assessment (£2.70 per hour) from 2013-14. The proposed expenditure in the report for the trajectory funding. The proposed process in the report for the allocation of capital funding.

12. ACADEMY UPDATE

12.1 The WSF noted the current position on the number of academies transferred and those potential further conversions.

12.2 Trish raised with the WSF proposals for a process for budgetary management for the LA to implement for schools that are transferring under the sponsored academy route. This is due to any deficit at the point of transfer remaining with the LA, which has required the LA to fund some significant costs from reserves.

12.3 The proposal stopping short of full withdrawal of delegation is to limit schools access to SAP.

12.4 The WSF felt such an approach was entirely appropriate and that the two schools that had converted leaving a significant deficit was unfair on all other schools. Concerns were raised on the LA approach to deficit management.

7 12.5 Trish advised that the current challenge system is robust but it is difficult to manage spending in a delegated environment unless there is a full withdrawal of delegation, which requires LA resource to manage and Secretary of State approval. The proposal will be a measure prior to this sanction and will need to be referred to in the Scheme for Financing Schools.

RESOLVED – The WSF agreed to the proposal and for it to be included in the Scheme for Financing Schools consultation.

The meeting closed at 4.00pm

Date of next meeting: - Thursday 28th February 2013 at 2pm, Council Chamber, County Hall