Agenda item

To consider the attached report of the Assistant Director, Finance and the Director, Education (Tameside and Stockport)

Consideration was given to a report of the Director of Education, Tameside and Stockport and Assistant Director of Finance, which set out information on the allocation of the Dedicated Schools Grant funding for 2023-24 and details of additional funding provided.

 

Members were advised that the provisional DSG settlement of £257.527m for 2023-24 had been received on 16 December 2022.  In addition, the government had announced that an additional £2.3billion per year would be invested in schools over the next 2 years.  This would represent an actual increase of £2 billion after an adjustment had been made to remove the element which related to the Health and Social Care Levy.

 

In Tameside, a Mainstream Schools Additional Grant (MSAG) for 2023-24 had also been allocated, which totalled £6.915m alongside additional funding of £1.636m to support the High Needs Block.

 

A detailed breakdown of the provisional settlement for the 4 blocks within the DSG compared to the latest 2022-23 settlement figures was provided for Members.

 

Members were advised that the Schools Block, which was the largest element of DSG funding, covered funding for all pupils and school led factors in the funding formula and comprised of the following:

•       A primary unit of funding (PUF) of £4,996.61

•       A secondary unit of funding (SUF) of £6,486.04

•       Premises – this includes PFI and business rates, which are based on historical spend.

•       Business rates, which are included in the LA allocation but will be top sliced from the DSG allocation and retained by the ESFA who will make payments to all LA’s directly on behalf of Schools.

•       Growth – this is calculated using the difference between the primary and secondary numbers on roll on the October 2021 and October 2022 school censuses.

 

It was explained that, in 2023-24, LAs would be able to set the Minimum Funding Guarantee (MFG) between +0% and+0.5% per pupil and that a Gains Cap could be used, which was a limiting factor that limits the gain in pupil led funding per pupil that a School received.  It was noted that this factor had been used in previous years to enable the LA to meet its statutory duty to set a balanced DSG budget.

 

Members were made aware that the provisional figures from the DfE had previously indicated that it would be affordable to:

•       continue to apply the 2023-24 national funding formula rates;

•       set the MFG protection at the highest rate of 0.5%;

•       remove the gains cap; and

•       transfer 0.5% of the School Block Funding to the High Needs Block.

 

However, following receipt of figures from the DfE, which had since been updated to reflect October census data, this scenario was not affordable within the funding allocation for the Schools Block as there was a shortfall of approximately £312k.  As a result, members were provided with a range of alternative options as set out below and option 3 was recommended in setting the formula for 2023-24.

•       Option 1 – Include a gains cap to balance the budget: There were 24 schools that would be affected by capping their gain, which would total approximately £315k.  The cap would allow a gain of up to 4.6% in funding. This assumed the MFG was set at 0.5%, as stated in the consultation.

•       Option 2 – Set the MFG at 0% and include a gains cap: There were 7 schools, who were in receipt of MFG and this would only save £34k, which would be transferred to the gaining schools (of which 23 would be affected).  To balance the budget, there would need to be a cap of 4.7% (allowing a increase of funding up to 4.7%), which would total approximately £281k.

•       Option 3 – Reduce the 0.5% transfer to the High Needs Block: The 0.5% would provide £1.005m to support the High Needs Block.  In order to balance the budget, MFG would be kept at 0.5% and have no cap on gains, the block transfer would need to reduce to 0.345% and this would provide support of £694k to the High Needs Block.

 

It was suggested that adopting option 3 would ensure that support was still being given to the High Needs Block and the gaining schools would have the increased funding, which related to the additional needs factors.  It was also noted that those schools with Minimum Funding Guarantee (MFG) would remain protected to the highest level.

 

An update was provided for Members in relation to the Growth Fund and it was noted that the estimated Growth Fund required for 2023-24 was £274k.  A detailed breakdown of this was provided for Members.

 

Members were informed that the Contingency budget had been established to support those schools facing a deficit budget position in order to support the DSG against any future pressures.  It was explained that, where schools were in deficit or facing deficit in the next financial year, they would be subject to a review in line with the School Deficit process as outlined within the Tameside Scheme Financing.  It was further stated that the LA would work very closely with the school and governors in order to manage the deficit and ensure action was taken to address this.

 

Members were made aware that the de-delegation rate for Contingency for 2023-24 remained at £5.81 per pupil and agreement to de-delegate in 2023-24 was sought from both the primary and secondary sectors.  It was noted that, should both sectors agree to contribute, based on October 2022 census information, this would result in the following contribution to Contingency:

•       Mainstream Primary Maintained Schools - £65k

•       Mainstream Secondary Maintained Schools - £35k

 

As in previous financial years, all schools were asked to support safeguarding across the borough by agreeing to a contribution of £3.03 per pupil, which equated to approximately £106k towards the cost of Tameside Safeguarding Children’s Partnership (TSCP).

 

In relation to the Risk Protection Arrangement (RPA), Members were advised that, where schools had opted into this agreement for 2022-23, membership would continue on an ongoing basis.  It was, therefore, noted that, should schools wish to opt out of this arrangement, they would need to make their own risk protection arrangements going forwards.  RPA for 2023-24 was confirmed to be £23 per pupil and it was noted that nursery numbers were included to calculate the charge for the primary sector, where relevant.

 

With regard to additional funding, the Mainstream Schools Additional Grant (MSAG) would be paid as a separate grant for 2023-24 and it was the DfE’s intention for this to be rolled into the DSG baseline allocation from 2024-25.  This allocation would be based on the October 2022 census and would be allocated as follows:

•       basic per pupil rate for pupils (reception through to year 11), £119 for primary, £168 for key stage 3 and £190 for key stage 4

•       a lump sum of £4,510 per school

•       a rate for FSM6 (£104 per eligible primary pupil and £152 per eligible secondary pupil)

 

It was further noted that the school level allocations for 2023-24 would be published in May 2023.

 

The outcomes of the Schools Funding Consultation were shared with Members, who were informed that 18 responses had been received in total.  However, 2 of these were duplicate responses, one of which was removed.  In response to the question ‘Do you support a 0.5% transfer from the Schools Block to the High Needs Block’ (as agreed in principle with Schools’ Forum), it was noted that 56% supported the 0.5% transfer and 44% did not support the 0.5% transfer.

 

Detailed information in relation to Early Years Funding streams for 2022-23 and 2023-24 was provided for Members and it was noted that the increase in funding across all Early Years streams was due to an increase in the funding rates, which were outlined.  It was stated that consultation would need to be held with Early Years providers regarding the increased rates and an additional Schools’ Forum meeting was required in order to agree the rates of allocation.

 

Approval was sought in order to centrally retain 5% (in line with operational guidance) of 3 and 4 year old funding (741k based on current settlement) and £0.14 per hour (as a minimum) of 2 year old funding (£71k based on current settlement).  It was explained that this would support the following areas:

•       Early Education Funding Team

•       Family Information Services

•       Early Years Quality Improvement

•       SEN Team

•       Social Emotional and Mental Health Service

•       Sensory Support

•       Making it REAL (Raising Early Achievement in Literacy)

 

Members were informed that a further paper with proposed funding rates, SEN Inclusion Fund and outcome of the consultation would be presented at the next meeting of Schools’ Forum, which was agreed to be scheduled for 7 March 2023.

 

It was explained that the total allocation for the Central Schools Services Block, which funds the statutory duties the LA undertakes for both maintained schools and academies, had received a total allocation of £1.249m for 2023-24.  This was based on a per pupil element of £35.81 for ongoing duties, for example, School Admissions Schools’ Forum, Copyright Licenses (£209k) and former ESG duties.  It was noted that these overall costs were estimated to be in excess of £1.2m and there was £1.040m available to support these costs. It was made clear that the funding received to support these statutory functions did not fully cover these costs and Members were formally requested to approve the central retention of this funding.

 

Discussion ensued in relation to the report and it was acknowledged that, whilst it was positive news that additional funding had been made available, with increasing costs, including pay award increases, funding was still an issue and presented risks to schools and the LA.   Following discussion, it was noted that, alongside the MSAG, there would also be some additional funding allocated to special schools.

 

It was explained that the Early Years Funding Group was planned and that much of this information would be brought forward for discussion.  It was also noted that, whilst Early Years Funding rates had increased, this was also significantly impacted by the mainstreaming in of the Teachers’ Pay and Pension Grant.  With this in mind, further consultation would be brought to the Early Years sector and, following the next meeting of Schools’ Forum, indicative allocations would be available for providers by the end of March 2023.

 

RESOLVED

(i)   That the recommended funding formula for mainstream schools be approved,

(ii)  That the growth fund be approved.

(iii) That the transfer from the Schools Block to High Needs Block, as outlined in Option 3, be approved.

(iv) That de-delegation of funding for Schools Contingency be rejected for the primary maintained sector.  

(v)  That de-delegation of funding for Schools Contingency be approved for the secondary maintained sector. 

(vi) That a continued contribution to Tameside Safeguarding Children’s Partnership be approved.

(vii)  That central retention of Early Years Funding be approved.

(viii) That the allocation of the Central Services Schools Block be approved.