Agenda item
Dedicated Schools Grant Financial Outturn 2019/2020
This report sets out the final Dedicated Schools Grant (DSG) outturn against the budget set for 2019/20.
Minutes:
The Schools Forum received a report from Olufunke Adediran, (Head of Finance) detailing the final Dedicated Schools Grant (DSG) outturn against the budget set for 2019/20 along with the breakdown of the overall £4.9 m deficit.
After reviewing the report, discussions that followed highlighted the following key points:
Ø At the end of the financial year 2019/20, the DSG deficit totalled £4.9 m, after the use of planned DSG reserves of £2.5m. The main reason identified was the £3.8m deficit on the High Need block mainly due to rising demand and the growth seen in Education Health and Care Plan (EHCPs).
Ø The School and Early Years Finance (England) Regulations, made clear the requirement for any DSG deficit balance to be held within the Local Authority’s overall DSG and be carried forward to recover from future years funding and or, recovery plans agreed with the Department for Education (DfE). This would require the deficit to be recovered from future years funding and/or through recovery plans agreed with the DfE.
Ø The breakdown of the detailed final DSG outturn position had been detailed within Table 1 and Appendix A of the report.
Ø The detailed summary provided on the outturn position in relation to the Schools Block (as detailed in section 5 of the report). Of the £230million Schools Block Budget, £111million had been allocated directly to Brent maintained schools, £115million had been recouped and allocated directly to academies, leaving a remaining expenditure budget of £4million to fund centrally retained items.
Ø The schools Block was in deficit of £1million, which was mainly due to a £1.4million pressure against the growth budgets, which covered the cost of the Choice and Fair Access panel (CAFAI) arrangements for new arrivals to Brent schools, as well as the impact of rising rolls in schools. The growth in pupil numbers had mainly been within the secondary school phase resulting in the budget for 2020-21 having been increased in line with forecast secondary growth, following a consultation with schools and as agreed by the Schools Forum. Pressure had also been offset by underspends in other school block funded budgets.
Ø The detailed summary provided on the outturn position in relation to the High Needs Block (as detailed in section 6 of the report). The High Needs Block budget was £58.7million and the allocation included a contribution of £1.1million (or 0.5%) of Schools Block income and £1.5million of DSG reserves. Of this allocation, £7.1million was recouped by the DfE to allocate directly to academies. As detailed within the summary, the main cost driver behind the deficit of £3.8million had been being the significant growth in the number of children with Education Health and Care Plan (EHCPs). The High Needs expenditure exceeded the allocated block income from the DfE by £6.7million with the growth identified in EHCPs a nationwide challenge, also recognised by Ofsted. The Forum were informed that Brent had seen a 35% EHCP growth over the last 5 years. At the end of 2018/19, there were 2,173 EHC plans, but by the end of 2019/20, the number increased by 12% to 2,435 despite the overall pupil population remaining broadly the same.
Ø There had been notable increases in Post 16 EHCPs where young people with SEND could remain in education provision until they were 25. This had led to a pressure of £1.7million following an increase from an average number of 182 in 2018/19 to an increased average number of 256 EHCPs in 2019/20. Also included in this pressure was approximately £0.5million of place funding, charged as an additional cost to the High Needs Block by further education colleges. The DfE had recently clarified that colleges should no longer make this charge and confirmed that the commissioning Local Authority should not incur the charge. It was therefore expected that this would be a significant cost avoidance in 2020-21. Other pressures identified included out of borough mainstream top-ups as well as for residential and independent educational settings. Work continued to develop proposals to increase the amount of special provision within the borough with the 2020-21 High Needs Block allocation for Brent including an additional £5m, although it was noted that current expenditure would still need to be reduced in order to achieve a balanced in-year budget, ahead of a medium term plan to recover the DSG deficit.
Ø The detailed summary provided on the outturn position for the Early Years Block (as detailed in section 7 of the report) and Central Items (as detailed in section 8 of the report).
Ø The summary provided in relation to the outturn position of the level of DSG balances (as detailed in section 9 of the report) and in relation to school balances (as detailed in section 10 and Appendix B of the report). It was noted that the school balances had decreased overall by £2.5m with funding and expenditure pressures likely to persist and those schools in deficit continuing to be monitored closely.
Ø The deficit on the DSG was a challenge faced nationally with long-term actions required to recover the deficit, which the Forum had already agreed to establish a Task and Finish Group to co-ordinate and monitor, especially in relation to the High Needs Block.
Ø As part of the work being undertaken by the High Needs Task and Finish Group the need was identified to ensure the banding review currently being considered included a review of the impact any recalibration may have on special schools.
Ø Members of the Forum also highlighted concerns in relation to the approach being adopted towards the management of funding deficits within schools, which it was felt would need to take account of pressures not only on the DSG relating to pupil numbers but also in terms of managing the response to the Covid-19 pandemic.
Ø Given the range of issues identified, it was also suggested that the Forum continue to monitor the implications and actions being taken to manage and mitigate the DSG deficit.
As an outcome of the discussion it was RESOLVED
(1) That the Schools Forum note the report.
(2) To ensure that the banding review currently being considered by the DSG High Needs Block Task & Finish Group include a review of the impact any recalibration may have on special schools. (Action 63: Brian Grady/Dena Aly)
(3) To request that the officers review the flexibility and options available in relation to how the national policy framework and approach regarding the management of funding deficits within schools was applied within Brent taking account of pressures not only on the DSG relating to pupil numbers but also in terms of managing the response to the Covid-19 pandemic. (Action 64: Olufunke Adediran and Dena Aly)
(4) That the Forum consider further the implications of the DSG deficit at a future meeting towards the end of 2020. (Action 65: Olufunke Adediran and Dena Aly)
Supporting documents:
- 06. DSG Financial Outturn 19-20, item 6. PDF 102 KB
- 06a. Appendix A- DSG Outturn, item 6. PDF 447 KB
- 06b. Appendix B- Schools Outturn, item 6. PDF 376 KB