Agenda item

This report updates Schools Forum on the National Funding Formula consultation carried out by the Department for Education (DfE) between July 2021 and September 2021.  The report also seeks views as to proposed changes to the Brent Schools Block Local Funding Formula (LFF) from 2022/23 as well as providing an update on the responses to the local consultation with maintained schools and academies on proposed changes to the LFF for 2022/23 and detailing changes to payments of maintained schools Non Domestic Business Rates (NNDR) from 2022/23.

8.            Schools Block – Local Funding Formula (LFF) proposed arrangements for 2022/2023 & National Funding Formula (NFF) update

Olufunke Adediran, Head of Finance at Brent Council introduced the report providing an update on the National Funding Formula consultation carried out by the DfE between July 2021 and September 2021.  Members of the Forum were advised they were being asked to consider the proposed changes to the Brent Schools Block Funding Formula (LFF) from 2022/23 as a result of the consultation and Government’s plans to transition towards a full NFF arrangement from 2023/24 which had been designed to enable a more phased approach.  In addition the report updated the Forum about the proposed changes to payments of maintained schools Non Domestic Business Rates (NNDR) from 2022/23. 

In presenting the report the key points highlighted included:

·                Whilst the final outcome of the consultation undertaken by the DfE was still awaited the main proposals and changes which had been included for considered from 2023/24 were as follows (as detailed in section 4.1 of the report):

Ø   That local authorities be required to start bringing their local formula factors at least 10% closer to the NFF factor value by 2023/2024. This would include all NFF funding factors without local adjustment. Subject to the impact of the 10% move proposed in 2023/24 the DfE was then looking to move at least 15% closer to the NFF in 2024/25 and at least 20% closer in 2025/26.  The Forum’s attention was drawn to Appendix A of the report, which set out Brent’s Local Funding Formula (LFF) rates for 2022/23.  These were mainly higher than the NFF rates meaning adjustments would be required with the same appendix highlighting the impact on Brent’s rates as a result of the 10% moved towards NFF;

Ø   To reform the premises factors from historic spend to a new formulaic approach following further consultation by the DFE. This would impact on the five schools in Brent that currently received split site funding;

Ø   To revise the basis of allocating growth funding for new and growing schools to meet basic need;

Ø   To change the falling rolls fund which provided funding for schools with short term reductions in pupil numbers and were judged to be “Good” or Outstanding” at their most recent Ofsted inspection.  The Forum was advised that Brent did not currently have a falling rolls fund and if that was required under the NFF only schools that fitted the eligibility criteria would benefit, which may include some within the borough;

Ø   The proposed changes to the role of the Schools Forum, including the removal of powers relating to the LFF, deciding on growth funds and falling rolls funds as well as agreeing a 0.5% transfer from the Schools Block to support other funding blocks as had been used by the Schools Forum in Brent to support the High Needs Block. It was noted that the removal of this power may have an impact on Brent’s deficit recovery plan, with the assumption that the option could be used moving forward over the next few years.

·                The details of the consultation undertaken with Brent maintained schools and academies during October 2021 seeking views on any changes to the LFF for primary and secondary mainstream schools funding and to be applied to the schools block element of the Dedicated Schools Grant funding in support of the transition to NFF, as set out in section 11 and Appendix C of the report.  There had been 11 respondents to the consultation, with the school level allocations for each option consulted upon set out in Appendix B of the report. Due to the relatively limited response the outcome had been broadly inconclusive providing, at this stage, no clear consensus for change with officers also acknowledging that the results could not be used as a fair representation on behalf of all schools in Brent.

·                In terms of a proposed way forward, informed by the DfE consultation proposals and position in other local authority areas, officers were therefore recommending that the Forum consider incorporating changes within the Brent LFF to support a transition towards the full NFF in order to avoid a more significant impact in 2023/24.  This would be based on a 10% gradual move in 2022/2023 as a step towards the NFF, as detailed within section 6 and Appendix B of the report as part of a phased approach including a minimum funding guarantee.  It was proposed that the recommended approach would then be subject to final approval at the next Schools Forum meeting.

·                In addition the Forum was provided with details of a further change from the DfE following the consultation undertaken on centralising the payment of Non Domestic Business Rates (NNDR).  As a result it had been confirmed that from April 2022 the Education and Skills Funding Agency (EFSA) would pay NNDR directly to billing authorities on behalf of schools for 5 to 16 year olds with maintained schools no longer needing to make NNDR payments to billing authorities and budget share allocations for 2022/23 reflecting the funding for NNDR although schools would not receive the actual cash payment. EFSA would provide additional rates costs associated with additional buildings on a school site that were used to deliver education for pupils at the school, however they would not cover additional rates costs associated with other buildings on site not used to deliver education.  In order to enable a smooth transition to the new payment system, schools were therefore being advised to ensure they registered any additional buildings on school sites not used to deliver education for pupils at the school as a separate entity with the Valuation Office Agency’s rating list (VOA), to ensure two individual bills were produced.

The Forum were then invited to raise questions on the report, with the following issues raised:

·                Forum members were supportive of the recommended way forward being proposed in terms of Option 3 that had been consulted upon involving the making of a 10%move towards the NFF funding rates whilst maintain the Age Weighted Pupil Unit (AWPU) element at current rates and using the minimum funding guarantee to mitigate against losses.  This was on the basis of the proposal being regarded as the least disruptive option for schools as part of the ongoing transition process although concerns were expressed should any more significant movement be required outside of the planned gradual and incremental increases over the next few years.

·                Details were sought on the process to be undertaken in engaging and advising schools on the approach agreed in relation to the transition process.  In response, Brain Grady assured the Forum of the measures being taken to actively engage and seek further views from all schools on the proposed changes.  Further communication would be undertaken with schools following on from the Forum meeting with a further update to be provided for the next meeting on the outcome of the process and further comments received, prior to a final decision being made.

·                Concerns were highlighted by members of the Forum that the limited response to the original consultation with schools may have been as a result of the frustrations felt by schools leaders about the financial pressures being faced in relation to school funding and budgets and a general acceptance that whatever the outcome the changes were going to need to be implemented anyway.  In response, Councillor Stephens (as Brent Council’s Lead Member for Schools, Employment & Skills) recognised the concerns being expressed given the current pressures being experienced in relation to school funding arrangements and assured the Forum, in support, of the continued lobbying actively taking place on the issues identified at both a regional and national level.

·                Further clarification was also sought on the impact of the proposed changes around NNDR and the impact on Early Years and PRU providers, which officers advised they would investigate and respond separately to outside of the meeting.

Having noted the comments provided, it was RESOLVED to:

(1)     Endorse as a way forward, the proposals to change the LFF to support a move towards the NFF rates and funding factors in order to enable further engagement with schools in determining the 2022/23 budget share allocations and a final decision on the LFF to be taken at the next Schools Forum meeting.  These proposals to include:

(a)     The introduction of the Free Schools Meals (FSM) funding factor; and

(b)     making a 10% move towards the NFF funding rates, whilst maintaining the Age-Weighted Pupil Unit (AWPU) element at current rates and using the Minimum Funding Guarantee (MFG) to mitigate against any losses.

(2)     Note the changes to payments of maintained schools Non Domestic Business Rates (NNDR) from 2022/23.