Agenda item

a)    Report of Corporate Director of Resources

b)    Presentation by Paul Darby, Head of Financial and Transactional Services

The Committee considered a report of the Corporate Director of Resources that provided details of the Council’s proposals with regards to setting the funding formula for mainstream primary and secondary schools for 2018-19, taking into account the Governments announcements on the National Funding Formula for schools on 14 September 2017. The formula would apply to maintained schools from 1 April 2018 and academies from 1 September 2018 (for copy of report and slides, see file of minutes).

The Head of Finance and Transactional Services advised that three options were currently being consulted on. Members were given an overview of how the funding formula works, with members advised that the pupil led formula factors are basic unit per pupil (AWPU); deprivation; low prior attainment and English as an additional language (although this factor is not used in County Durham at the moment).  It was highlighted that funding allocations to schools were sensitive to the number of pupils on the roll.  School led funding factors includes the lump sum.  Currently in County Durham the lump sum is - primary schools receive £160,000 per school and secondary schools receive £175,000. Under the NFF each school whether primary or secondary will receive £110,000. It was highlighted that under the NFF there was a sparsity factor within school led funding, that will only apply to schools in the limited examples and this funding was set at a maximum of £65,000 but tapered based on the size of the school.  Premises led funding related to business rates and PFI costs, which are cost neutral for schools.

It was explained that the government had announced that the NFF would be implemented in 2020/21 bit that Councils needed to set a local formula for 2018/19 and 2019/20. The DfE were encouraging all authorities to move towards the NFF based allocations prior to 2020/21.  School funding formula changes year on year had been minor since 2013 and usually taken under a delegated decision but because of the NFF impacts changes the authority is consulting with schools forum and individual schools and taking a report back to Cabinet in December and formalised in January.  The Council had modelled three options: initiate changes immediately from 2018/19; make incremental changes using a transition approach or do nothing until 2020/21. The impact on individual schools had been modelled and were attached to the report. The modelling was continuing to be refined.

The Head of Finance and Transactional Services provided members with a presentation that focused on:-

·         Schools Local Formula Funding Arrangements and Regulations;

·         National Formula Funding Announcements;

·         Issus and Options arising from the National Formula Funding Announcements.

Councillor Brookes referred to the figures for Bluebell Meadow Primary School, which was shown on appendix 3 of the report and noted that this school would have a 5.2% increase in pupil numbers, yet funding had decreased under all scenarios. He highlighted that the National Funding Formula was the better option for that particular school, rather than the transition option, even though pupil numbers had increased. The Head of Finance and Transactional Services advised that some schools have historical allocations and were protected due to depravation which would reduce over a period of time. He also highlighted that post that there were issues relating to the loss of lump sums following the merger. A breakdown of each individual school would have to be produced for a better understanding. He explained that if there was no change, Bluebell Meadow Primary School would lose £188,000 of funding, while under the NFF the loss would be a smaller amount. He added that a number of other schools would be in the opposite position and would be in a worse situation under the NFF. A breakdown to better explain the change for an individual school could be provided to members on request.

In response to a question from Councillor Blakey regarding how the NFF would apply to new schools and if any safeguarding was in place, the Head of Finance and Transactional Services explained that in terms of modelling, the NFF had been set based on the existing number of schools. Work would be carried out with individual schools to make sure they were factoring in resource impacts of the loss of lump sums upon amalgamation.

Councillor Jewell asked if individual schools that would have a negative impact had been identified and how that would be managed, particularly in light of the different amounts of reserves held by each school. The Head of Finance and Transactional Services advised that when determining the local formula the Council was not able to take into account any retained balances and individual schools and governors were required to consider resources during their MTFP planning. He added that the NFF formula was increasing the amount of funding allocated to the secondary phase and within the NFF increase the amount of funding distributed via Pupil Led factors so the more pupils on roll the greater the resources a school allocated. The government’s aim was to reward high performing popular schools through attracting a greater proportion of the funding. This was one of the reasons why a report going to Cabinet on 15 November 2017 was seeking to launch a review of schools provision on an area by area basis.

Councillor Brookes challenged the rational of driving schools to become bigger. He referred to the list of primary schools and noted that Bluebell Meadow would be the biggest loser in the county even though they had become a bigger school by amalgamating two schools. The Head of Finance and Transactional Services explained that it was possible that the 17/18 funding figures were distorted by the split site allowances and the base funding may have doubled lump sums. He advised that he would confirm the position with the school and forward the information to Councillor Brookes.

Mr Josh Conlon asked if a small school was to close would the funding go with the pupil.  The Head of Finance and Transactional Services advised that the funding would follow the child definitely in the following year and as a transition if the child left midway through.

The Head of Finance and Transactional Services added that all members and governors were being asked to consider the proposals and subject to consultation, the consensus from responses so far was that the transitional option was fare to everyone in that every school would change.

The Chairman thanked the Head of Finance and Transactional Services for the detailed presentation.

Resolved:

(i)        That the information contained in the report and the consultation currently underway via the Schools Forum and will all Primary and Secondary Schools across the county be noted;

(ii)       That progress towards implementation of the NFF in 2020-21 continue to be monitored.