School funding reform

1

School Business Managers

North East July 2013

Mukesh ParekhAcademies & Maintained Schools

The case for reform

Previous system complex, opaque, unfair and often perverse

School Funding Reform (2012): first step towards a fairer system and the national funding formula

– Introduction of 12 factors for bases of calculating funding

High needs: Special Educational Needs / Learners with Learning Difficulties and/or Disabilities (to age 25) funding reform

Review of implementation in spring 2013

2014/15 factors announced in June 2013

How it felt for schools and academies Overly complicated

Too bureaucratic

Opaque

Poorly communicated

Prone to error and interpretation

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Twelve standard factors are available for use in the local funding model

Two of the factors are compulsory

– basic entitlement (age weighted pupil unit or AWPU)– deprivation

The other 10 factors are optional

Local authorities can suggest exceptional factors

The final proforma is agreed in the Schools Forum

Design of the LA funding model

Existing 2013/14 allowable factors

Basic entitlement (Compulsory) Deprivation (Compulsory) Prior attainment Looked after children English as an additional language Pupil mobility Lump sum (Max of £200K) Split sites Rates Private Finance Initiative (PFI) London fringe Post-16

Exceptional factors

LA’s can include additional exceptional factors. Must have dedicated criteria and must be pre-agreed by the EFA

Exceptional costs

– Maximum of 5% of schools in a local area

– Circumstances must have a financial impact greater than 1% of the school’s budget

MFG set at -1.5% per pupil for 2013/14 & 2014/15

The following aspects excluded from protection:

– Post-16– Early years– High needs– Lump sum – Rates

Local authorities could apply for additional exclusions

– For example bulge classes where the money should not be built into your baseline as it will disadvantage you in subsequent years

Minimum Funding Guarantee

New Schools Forum regulations

– Only the DCS, Chief Finance Officer and Lead member (or their deputy) can be LA members of the Schools Forum

– The need for a minimum of 16 members has been removed– LA staff cannot vote on their own proposals, only the other

members of the Forum– Academies are entitled to proportional representation on the

Forum– EFA has observer status at meetings

Schools Forum reform

Introduction of 12 Factors funding methodology

HN funding Reformed to Planned Places plus top up funding

New Schools Forum regulations

Post 16 Funding Reforms

Schools Funding ReformSummary (Stage 1)

Review of 2013-14 arrangements(Spring 2013)

Continuing a clear commitment to reform funding systems

Looked at getting views on are we moving towards national consistency

Getting views, on areas of concern and possible changes

Looking specifically at three factors, prior attainment, pupil mobility and the lump sum

Deadline for views was 26th March

2014/15 factors announced in June 2013 and EFA has started to work with local authorities on implementation

Beginning the second year of school funding reform – the context

Changes introduced in 2013-14 were the first step towards a national funding formula for schools

Radical change – needed to ensure no unexpected outcomes and Ministers committed to reviewing the impact

Result of review, together with changes for 2014-15 published 4 June 2014

Compared to stage 1, changes for 2014-15 are relatively modest

Building on 2013-14 reforms…

The simplified local formula remains

Limited set of factors to be used for school formula distribution

LA proforma submissions in October and January

The high needs system remains broadly as in 2013-14

The Minimum Funding Guarantee continues at -1.5% per pupil (Exclusions apply)

The changes for 14-15 are therefore a development of 13-14 and continue the journey towards a

national funding formula for pre-16

The principal changes for 2014-15 (1)

New factor – an allowance for sparsity, aimed at supporting necessary small schools, mainly in rural areas

Maximum allowable for a sparse school is £100,000 - flat rate or tapered

Eligibility based on size of school and distance to second nearest school:– Primary schools – max: 150 pupils, min: 2 miles distance– Secondary schools – max: 600 pupils, min: 3 miles distance

Nearest school

Next nearest school

Next nearest school

1 mile

1 mile

2 miles

1 mile

3 miles

5 miles

2 miles

4 miles

Key

1st nearest school

Distance to 2nd nearest school

The principal changes for 2014-15 (2)

Changes to the lump sum:– LAs can now choose to have different lump sums for primary

and secondary schools – with middle schools getting a weighted average

– The lump sum is now capped at £175,000 per school– Where two schools amalgamate the new school will receive

85% of the total of the lump sums of the predecessors for the next full year

The principal changes for 2014-15 (3) Other factors with changes:

– The looked after children factor must now apply to any child in care for one day or more

– The prior attainment factor has changes in its measurement at Early Years Foundation Stage and Key Stage 2. For EYFSP it will apply to pupils not achieving a good level of development; for KS2 it is will apply to pupils not achieving level 4 in English or Maths

– The mobility factor now applies only when the number of “mobile” pupils exceeds 10%

The principal changes for 2014-15 (4)

Other restrictions:

Basic entitlement for primary pupils must be at least £2000; and for secondary pupils at least £3000

At least 80% of delegated funding must be distributed via pupil-led factors

For 2014-15 we are not putting any constraints on the primary/secondary ratio

The principal changes for 2014-15 (5)

LAs may create a “falling rolls” fund to support good and outstanding schools and academies with temporary falling rolls in advance of a population bulge

Schools Forum must approve the criteria and be consulted on allocations (and the EFA will check that criteria are compliant)

Schools Forum – membership must include a representative from an institution providing education to 16-19 year olds, other than schools or academies (replacing the 14-19 partnership)

Exceptions

Local authorities can apply for exceptions to be made for:– Exceptional premises factors (13-14 approval can be

automatically carried forward if criteria still met)– Exclusions from the MFG– Changes in pupil numbers as a result of reorganisation or

changes in years of admission– Sparsity calculation if the “crow flies” measure produces

perverse results– Variation to the lump sum for amalgamated schools

Ensure that your local authority and Schools Forum are aware of any unusual circumstances for your school

The principal changes for 2014-15 – high needs In 13-14 we recommended that authorities delegated sufficient

funding to allow schools to meet up to £6000 of special needs costs. This is now mandatory

Local authorities should develop criteria to support schools with disproportionate numbers of high needs pupils

The operational guidance sets out how high needs places will be adjusted for 2014-15 (further guidance due in July)

For special schools and academies with post-16 pupils we will be consulting on setting the place value at £10,000 in place of the normal post-16 values

Factors for 2014/15 allowable factors Basic entitlement (Compulsory) Minimum set Deprivation (Compulsory) Prior attainment Change Looked after children Change English as an additional language Pupil mobility Change Lump sum Change Sparsity New Split sites Rates Private Finance Initiative (PFI) London fringe Post-16

Equal treatment

When constructing the formula, authorities must take into account the characteristics of all maintained schools, academies and free schools in their area.

When incurring central expenditure (other than de-delegated budgets), maintained schools and recoupment academies must be treated on an equivalent basis.

All high needs providers must be treated on an equivalent basis when making placements.

Your Role as Business Manager

Develop your understanding of the LA funding formula and its impact for your school or academy.

Accurate Census returns are key to determining the bulk of your funding – ensure an accurate and timely return.

Know who represents you on the Schools Forum and liaise with them about the LA formula for 2014/15.

Make sure the LA is aware of your circumstances which may impact on MFG and or exceptional funding.

Sources of information

The announcement on 2014-15 funding arrangements is at – http://www.education.gov.uk/schools/adminandfinance/financialmanagement/schoolsrevenuefunding/a00221523/review-of-2013–14-school-funding-arrangements

For the latest guidance on Schools Forums

please see – http://www.education.gov.uk/schools/adminandfinance/financialmanagement/schoolsrevenuefunding/schoolsforums/a0070290/guidance-for-schools-forums-on-their-role

For analysis of LA Proforma return 2013/14http://media.education.gov.uk/assets/files/pdf/a/january%20proforma%20analysis%20vfinal.pdf

School funding reform

1

School Business Manager

North East

July 2013