Item No: Page Numbers: EAST RIDING OF YORKSHIRE COUNCIL Report to: The Cabinet 23 April 2013 Wards: East Wolds and Coastal Review of Gembling Primary School Report of the Director of Children, Family and Adult Services A. Executive Summary The report informs members of the consultation that has taken place on the future of Gembling Primary school and seeks members’ views on the action to be taken in the next stage of the review of the school. The report is to be considered as an urgent item, as the consultation period did not expire until after the agenda had been prepared. B. Corporate Priorities 2011-2015 Reducing Costs, Raising Performance C. Portfolio Children, Young People and Local Authority Schools D. Recommendation and Reason for Recommendation To improve the efficient use of school funding and to achieve a more efficient organisation of schools, Cabinet is recommended to approve the publication of proposals for the closure of Gembling Primary School with effect from the end of the 2012/2013 school year. 1. Background 1.1 National changes to the way all schools are funded were published by the Government in 2012. New finance regulations, conditions of grant and Schools Forum regulations have been introduced and affect the way schools will be funded in the 2013/2014 financial year and beyond. These new regulations, which have been introduced as a transitional arrangement pending the introduction of a national funding formula, significantly restrict local authorities’ discretion to determine how the funding allocated by Government for schools is distributed. 1.2 Low levels of funding provided by central government, the general pressure on public finances and the vagaries of the demand for school places are putting increasing pressure on individual school budgets. The limited local discretion allowed by the new funding arrangements means that local authorities are less able to adopt local funding formulae which suit the existing arrangements of schools and the current distribution of pupils between schools. The ‘old’ East Riding formula for school funding has had to change and the new framework means that the changes implemented take less account of local circumstances, including the nature, arrangement and organisation of schools and school places. 1.3 The patterns of school place provision in the East Riding have been reviewed in the past to see if changes can be made which will ensure that the limited funding available is distributed to schools in a way which secures the most effective use of that funding for the education of all children. 1.4 Schools that are not financially viable, or where the need for school places could be met at other local schools, would be looked at to consider their future. By reducing the overall number of schools, the remaining schools will each have a greater share of the total school funding available. Additionally, the redistribution of pupils resulting from a school closure will invariably mean more pupils on roll at some of the remaining schools in the area, improving the financial viability of those remaining schools. 1.5 Whenever a headteacher resigns, East Riding of Yorkshire Council expects the governing body to review the leadership arrangements. The local authority is involved with this process and will also take the opportunity to review the position of the school. The headteacher of Gembling Primary School tendered her resignation and as part of the review process, the future of the school was considered and it was decided by the local authority to consult on the potential closure of the school. The alternative would have been to implement a review at a future date after the appointment of a new headteacher. If a review was undertaken after the appointment of a new headteacher, and the result of the review was closure of the school, it would be unfair on the new headteacher as well as a potentially costly exercise as a redundancy payment may be incurred. 2. School Funding Reform 2.1 The new funding regulations introduced by the Government do not affect the amount of funding that the local authority is allocated to fund schools. Instead, the new regulations impose significant restrictions on the ways in which a local authority can distribute that funding to schools. 2.2 Direct and acknowledged consequences of the Government’s changes to school funding are that individual schools’ budgets will have to change and the viability of small rural schools will be affected. In its guidance on school funding reform, the Department for Education stated that “the development of new local formulae under these arrangements is highly likely to result in changes to each school’s budget share.” The same guidance states that small rural schools can be supported but only where “…they represent an efficient use of a local area’s funding” and concludes that “it would be unfair to allow subsidies to reach schools with a few pupils, at a 1 significant cost to the schools with the majority of pupils.” 2.3 Transitional arrangements have been put in place through the Minimum Funding Guarantee (MFG), whereby a school’s budget will not be reduced by more than 1.5% per pupil. This guarantee is in place for 2013/2014 and 2014/2015 and a guarantee is expected to be included in the arrangements for 2015/2016. However, if the Government’s intention is to implement its funding reforms in full, the transitional arrangements will have to end at some point. 2.4 To achieve more consistency and standardisation, the new national scheme limits the factors that can be used to decide how much funding a school gets. Although there is still some local 1 School funding reform: Arrangements for 2013-14, Department for Education,2012 discretion, there are now only 12 factors which local authorities can use in their formulae for the allocation of school funding. Two of the 12 factors are mandatory and have to be included in the local formula: pupil numbers and levels of deprivation. Of the other nine factors, not all are relevant to or significant for most schools in the East Riding, for example: pupil mobility, schools within the London fringe, exceptional premises factors and split sites. This compares with over 30 factors in the school funding formula used in the East Riding in the 2012-2013 financial year. 2.5 The most significant optional factor that the new framework allows local authorities some discretion in determining is the lump sum. The lump sum is a locally determined figure which can be of any value up to £200,000 and has to be paid at the same level to all schools in the local authority area, both primary and secondary. The intention behind including a lump sum as a factor is to ensure that all schools have a minimum level of funding to cover basic management, administration and maintenance costs. Such costs are not necessarily proportionately affected by the numbers and categories of pupils on roll. 2.6 In determining the level of the lump sum, local authorities have to achieve an appropriate balance between setting a higher lump sum, which principally benefits smaller schools; or a lower lump sum, which benefits larger schools. The higher the lump sum, the less funding is available for distribution to schools through other factors, including pupil numbers, pupils with special needs and pupils from deprived areas. 2.7 The way central government funding for schools is allocated has led to the East Riding of Yorkshire being consistently funded at one of the lowest levels in the country. Given this low starting point, any negative effects on individual schools resulting from the new arrangements for local school funding formulae will be accentuated. 2.8 In determining the local funding formula, a local authority is obliged to take into account the views of the local Schools Forum. The Council is required to ensure that at least two thirds of the members are school representatives. The East Riding Schools Forum’s membership comprises 18 maintained school and academy representatives and six non-school representatives. 2.9 The local school funding formula recommended by the Schools Forum and approved by the Council made provision for the lump sum to be set at £130,000. At this level, the greatest number of pupils will be attending schools where the impact of the changes to the funding arrangements is either neutral or positive. If the lump sum is set at a higher level, although smaller schools would benefit, more pupils would be taught in schools affected negatively by the new funding arrangements. Increasing the lump sum by £10,000 per school, reduces by more than £1.4 million the funding available for distribution through factors specifically relating to provisions for individual pupil’s education. This approach is reflected and supported in a recent consultation document issued by the Department for Education in which it states that the Department is “…keen to ensure that even more money is targeted to the needs of 2 pupils rather than to the circumstances of schools.” 2.10 When a primary school is closed, the lump sum of £130,000 becomes available in the Schools’ Budget for redistribution through the funding formula. This increases the amount that each primary school receives through the age weighted pupil unit. In addition, the schools that receive the displaced pupils will receive their pupil led funding. The minimum funding guarantee is also redistributed, in the same way. 2 Review of 2013-2014 School Funding Arrangements, paragraph 15 2.11 Since 2000, we have closed or amalgamated 20 schools, small and large. By doing this, we have redistributed nearly £2m to all schools in East Riding.