Agenda item

To consider a report from Assistant Director, Finance and Director, Education on the Dedicated Schools Grant outturn position for 2020-21 and an update of the budget position for the financial year 2021-22.

Consideration was given to a report of the Assistant Director of Finance and Director of Education, which outlined the Dedicated Schools Grant Outturn position for 2020-21 and an update of the budget position for the financial year 2021-22.

Members were informed that there had been an overall, in-year deficit of £1.129m, with the main reason for this relating to the deficit on the High Needs Block of £1.822m, which would be subject to further discussion in Agenda Item 4.  Members were made aware that this had been partly offset by a surplus on the Schools Block of £0.296m, which related to surplus in business rates and growth funding. 

It was explained that the surplus on the Early Years Block was currently £0.703m and that final allocations for the Early Years settlement would be provided to the DfE in November 2021, based on the census data from January 2021.  Members were informed that there had been a final adjustment of the 2019-20 allocation, which was the clawback of £0.018m, and it was estimated that a further clawback of £0.293m, relating to 2020-21 financial year would reduce the Early Years surplus to £0.392m.  A detailed breakdown of this was provided for Members in Table 2.

It was highlighted that the figures provided were based on the actual payments for Summer 2020, Autumn 2020 and Spring 2021 terms, along with the adjustment to increase the hours of participation to Autumn 2019 levels.  Members noted that the majority of providers had remained open in Spring 2021, throughout the lockdown period, with a number of providers having temporary closures as a result of outbreaks and periods of self-isolation.  However, it was acknowledged that the second period of lockdown had seen lower levels of participation than anticipated, which had meant there was an estimated reduction in funding of £0.293m expected for 2020-21.  It was stated that a more detailed update would be provided for Members in November 2021.

Members were informed that the centrally retained element of Early Years funding was not fully spent as work had not progressed as expected due to the pandemic.  Members were reminded that any surplus would be used to support the overall DSG deficit, as previously agreed by Schools Forum.

In terms of the current financial year, Members were informed that there was a projected deficit of £341k and reference was made to the previously agreed 0.5% (£0.878m) transfer from the Schools Block to the High Needs Block.  The surplus of £0.181m on the Schools Block was highlighted and it was explained that this related to actual rates charges being lower than estimated (£0.049m) and unallocated growth (£0.132m).  However, Members were made aware that this could be subject to change further to decisions, which may be made later in this meeting, in relation to the growth fund requests.  Members were reminded that, as agreed with Schools Forum in January 2021, this unallocated growth should support the deficit on the DSG. 

It was explained that the Central School Service Block was expected to be spent in full and that the projected, in-year deficit on the High Needs Block was expected to be £2.155m, which would reduce to £0.948m with the £0.878mtransfer from the Schools Block and savings of £0.329m identified in the DSG Deficit recovery Plan.

Members were made aware that the Early Years Block was currently estimated to be in surplus (£0.426m).  However, it was also noted that there would be changes in the funding mechanism for Early Years in 2021-22, due to the impact of the pandemic, with a detailed estimate provided for Members in Table 4.

It was explained that an Early Years Working Group had now been established, with priority areas for review having been identified as deprivation and SEND Inclusion Fund.  Members were informed that papers would be brought to Schools’ Forum to agree any changes to the funding mechanism.

With regard to the DSG Reserve, Members were made aware that there had been an increase in the reserve deficit, predominantly as a result of the in-year High Needs deficit.  It was outlined that contributions to the reserve had reduced this burden.  However, it was acknowledged that this was still a difficult issue to resolve.  Members were informed that, if the 2021-22 projections materialised, there would be a deficit of £2.027m on the DSG.  With this in mind, Members were reminded that a deficit recovery plan had been developed and submitted to the DfE and that there were ongoing discussions with DfE in relation to this.  It was confirmed that this plan had previously been presented to Schools’ Forum in November 2020. 

RESOLVED

That the contents of the report be noted and supported