Agenda item

This report provides the Schools Forum with an update on the forecast financial position for 2023/24.

Folake Olufeko, Senior Finance Analyst introduced the report that provided an update on the forecast financial position for 2023-24.

The Forum noted the following key points as part of the update provided:

·             The cumulative deficit at the end of the financial year 2023/23 was £13.8m. The increased demand for High Needs provision was forecast to lead to the overall DSG expenditure exceeding income by £0.8m in 2023/24, this resulted in a forecast cumulative deficit of £14.6m by the end of the financial year. This was mainly due to the increased number of children and young people with Education Health and Care Plans (EHCPs).

·             The detailed financial monitor of the DSG Schools Budget was presented in the accompanying Appendix 1, this provided details of the spends against each block of the DSG.

·             The Schools Block was currently forecast to breakeven, of the total £261.7m Schools Block budget allocated by the DfE to Brent, £139.0m has been recouped and allocated directly to academies. £1.3m had been transferred to the HNB and £1.9m had been deducted for National Non-Domestic Business Rates to be paid by the DfE directly to the billing authority, leaving £119.5m directly allocated to Brent maintained schools and to fund centrally retained items including the growth fund.

·             The High Needs Block budget, excluding the proportion allocated to academies was £74.7m, this allocation included the £1.3m transfer from the Schools Block that was previously approved by the Schools Forum.

·             Place funding of £8.8m (£8.6m in January 2023) for Academies had been recouped from the Block and allocated to Special Academy providers, additionally there was a £0.3m in year adjustment by the DfE in July 2023 to increase the HN funding for Brent children attending schools in other local authorities.

·             Overall, the HNB was projecting a deficit of £0.8m, section 7, Table 2 of the report provided a breakdown of the income and expenditure against different categories in the High Needs Block.

·             A pressure of £1.1m was projected against the cost of Post-16 provision, however the Forum noted that it was difficult to accurately forecast the Post-16 costs due to delays in various settings confirming their charges to the local authority and the issue of pupils joining mid-year, therefore the forecast pressure of £1.1m was subject to change later in the financial year, with the Forum due to receive an update at the January 2024 meeting.

·             The overspends were partly mitigated by an underspend in the mainstream and academy budgets due to the increased utilisation of in borough SEND placements.

·             The HNB Management Plan was in place to monitor and address the deficit, this included looking at longer term actions to reduce the deficit over time. A task group chaired by the Corporate Director of Children and Young People was in place to coordinate and monitor actions in the Plan, an updated Plan would be presented at the January Schools Forum.

·             The Early Years Block was currently forecast to break even. However, this position was likely to change over the next two quarters, as children moved on from early years’ settings and new take-up hours were confirmed from September 2023.

·             It was noted that 95% of the Early Years Block’s income was passed onto providers, and the remaining 5% was retained by the local authority for central expenditure budgets for Early Years services.

·             The Central Block was also currently forecast to break even.

·             In summary the majority of the DSG overspend was in relation to the HNB due to the increased EHCP numbers. This was recognised as a national issue, that was regularly under internal review. Additionally, it was expected that the benefits from the Delivering Better Value (DBV) in SEND programme would start to take effect over the next few years, therefore effectively reducing longer term pressures on the HNB.

The Chair thanked officers for their report and asked the Forum if they had any questions in relation to the information provided. The Forum queried if Brent were to be offered a DfE “safety valve” agreement to support the deficit of the HNB and queried why there had been such a significant reduction in funding.

The following responses were provided:

·             The Forum was advised that Local Authorities identified by the DfE for the safety valve support agreement would be written to individually, based on their deficit increase. Brent had not received any contact from the DfE at this point, however it was noted that many other local authorities that had been offered the safety valve agreement were also part of the DBV programme.

·             In relation to why the DfE had significantly reduced funding, the Forum was advised that the DfE’s explanation of this was that the increase in allocated funding provided last year for a two-year period, had been allocated at 5% in one payment, rather than being split over two years.

·             The DfE were currently reviewing management plans to inform future funding decisions.

As there were no further questions the Chair thanked members and officers for their contributions to the discussion on the report and the Forum RESOLVED to note the contents of the report.