Agenda item
2019/20 Funding Announcements and Schools' Budget Position
The paper informs the Schools Forum about the funding announcements made in the summer of 2018. It then assesses these announcements in light of the financial position of schools and the High Needs block.
Minutes:
Andrew Ward introduced the paper which informed members of the Schools Forum about various funding announcements made in the summer of 2018 and provided an assessment of these announcements, taking into the account the financial position of schools and the High Needs Block. The teacher pay rise had been announced in September 2018 (for details, please see paragraph 5.1 of the report on page 20 of the Agenda pack) and it would be funded by a grant separate to the Dedicated Schools Grant (DSG) in 2018/19 and 2019/20. It aimed to fund the difference between the confirmed pay rise and the 1% that had been assumed had been budgeted for. Mr Ward said that the Department for Education (DfE) had published the methodology for the Teachers’ Pay grant, but detailed school level allocations had not been made available yet. He reminded members that Brent paid its teachers the inner London rate, but non-teaching members of staff received the outer London one. Estimates for each school for both 2018/19 and 2019/20 were available in the appendices to the report (pages 25-31 of the Agenda pack).
Members of the Schools Forum commented that the teachers’ pay rise might not be sustainable in the long term as many schools were in a difficult financial position and were struggling to meet their needs. Brian Grady explained that a number of factors would be taken into account when setting the Schools Budget - planning would start earlier, consideration whether the existing Task Groups were fit for purpose would be given, and officers would be proactive in putting forward transparent proposals. In relation to a question about the way funding allocations would be made, Mr Ward said that the Council would pass the on the Teachers’ Pay grant to maintained schools and academies would receive it directly from the Education and Skills Funding Agency (ESFA). The 2018/19 allocation had come into force in September 2018 and it had been based on previous allocations in October 2017. A primary governor noted that as funding was not guaranteed after the initial two years, expanding schools with increased number of teachers could be at net loss. Mr Grady acknowledged the points raised by members and said that officers would be available to address specific concerns.
Mr Ward directed the Schools Forum’s attention to section six of the report (pages 20 and 21 of the Agenda pack) and pointed out that the revenue funding for schools would continue to be made via the four-block structure of the DSG and this arrangement would continue until 2021. In the Schools Block, there would be an increase in cash terms (rather than in real terms) to funding allocations in 2019/20 accounting for 0.5% per pupil. Local Authorities would continue to set the local schools formulae for distributing the Block, although allocations would be aggregated from school level calculations using the national funding formula - a key change would be related to accounting for differences in Primary and Secondary Pupil growth as a fall in one would not net off or reduce the other. Mr Ward said that although Brent’s growth budget had been reduced, an overspend had been forecast due the sudden change in growth patterns observed in the Borough. Therefore, if the growth pattern in the current year reflects the previous year’s one, funding would be lost which could be a problem considering the overspend in the High Needs Block. Nevertheless, the Local Authority would still make the decision how to fund growth within its area.
The Forum heard that there would be a small increase of 0.5% per head of under 19 population in the High Needs Block. This would not be sufficient to contain the projected overspend of approximately £2 million and the growing demand for high needs support. Furthermore, it remained a concern that the national high needs formula had calculated £6 million less than the current allocation for Brent, while no announcements had been made on the Early Years Block. As inflationary pressures continued to exist within the sector, officers would continue monitoring the situation.
Mr Ward referred to the financial positon of schools. He said that at the end of the 2017/18 financial year, six schools were in deficit, however, all but one had been successful in setting balanced budgets for the current financial year. He reminded members that the three-year budgets which schools submit to the Local Authority provided a medium-term view on their financial position. The proportion of available income that had been budgeted for employee costs in 2018/19 averaged 80% as predicted which led to a challenge as expenditure on staff costs was increasing, while the proportion of money spent on staffing had not changed. In relation to the use of reserves, Mr Ward highlighted that with reduced funds for growth and rising pressures in the High Needs block, it would not be prudent to continue to supplement the mainstream funding formula from reserves.
A primary governor enquired how officers would manage the process of setting a balanced growth budget. Mr Grady responded that work would be undertaken to ensure that young people with additional needs were funded fairly – additional resources would be made available in secondary provision and commissioning activity related to high-cost placements would be examined as in-borough provision had been considered to be better for young people.[1] Furthermore, capacity across the Borough been examined in Brent’s School Place Planning Strategy. Mr Ward addressed a concern related to schools which were in deficit by explaining that if they were unable to balance their budgets, they had to apply for a licence to operate in deficit which had to be approved by the Council’s Chief Finance Officer. The Schools Finance Team would be available to support them to set a balanced budget by holding thorough discussions about various strategies that could be used to reduce deficit.
RESOLVED that:
(i) The contents of the 2019/20 Funding Announcements and Schools’ Budget Position report, be noted; and
(ii) That the mainstream funding formula be presented for final approval at meeting of the Schools Forum in January 2019
Supporting documents:
- 09. 2019-20 Funding Announcements and Schools’ Budget Position, item 9. PDF 103 KB
- 09a. Teachers' Pay Grant Estimate 18-19, item 9. PDF 276 KB
- 09b. Teachers' Pay Grant Estimate 19-20, item 9. PDF 278 KB