Agenda item

This report sets out the proposed DSG Schools Budget for 2024/25 for consultation and agreement by Schools Forum ahead of the Council budget being set and approved by Full Council in February 2024.

Olufunke Adediran (Head of Finance, Brent Council) introduced a report setting out the proposed DSG Schools Budget for 2024/25 for consultation and agreement by the Forum ahead of the Council budget to be considered and approved by Full Council in February 2024.  The Forum noted the following key points as part of the update provided:

·             The Forum was advised that the report focused primarily on the Schools Block, as a separate report had been provided for the Early Years Block, with the High Needs Block due to be a focal point at the February 2024 Schools Forum.

·             The DSG funding announcements for 2024-25, as detailed within section 4 of the report, which had included additional funding for the teachers pay award (Teachers Pay Additional Grant TPAG), the provision of additional support for childcare and additional funding for mainstream schools through the Mainstream Schools Additional Grant (MSAG) that had now been rolled into the National Funding Formula and included in the baseline 2024-25 Schools Block Allocation and an increase in the pupil premium for children looked after by the local authority, adopted or left care.

·             The detailed DSG Funding Block allocations for 2024-25 as set out within Table 1 of the report, with Brent to receive a total DSG funding allocation of £397m in 2024-25 compared to £379m in 2023-24 representing an overall increase of £18m.

·             The growth funding allocation for 2024-25 had remained the same (£1.2m) as in 2023-24 with the allocation based on the difference between the number of pupils on roll in each school between the October 2022 and October 2023 school censuses and the growth funding allocation included in the overall Schools Block funding for 2024-25.

·             The final High Needs Block (HNB) allocation had been announced as £85.0m, which had been £2.8m more than the allocation for 2023-24 and represented a funding increase of 3.5%.  This increase had been less than that received in previous years and whilst not contributing towards the projected cumulative DSG deficit of £14.6m it would, however, be expected to contribute towards funding any further additional pressures due to continued increases in the number of ECHPs.  It was noted that a more detailed breakdown of the HNB budget was due to be presented to Schools Forum in February 2024.

·             Given the current HNB expenditure budget forecast and increase in number of children with Education, Health and Care plans (EHCPs) it had been proposed, in addition to measures outlined in the DSG deficit recovery plan, to transfer 0.5% from the Schools Block to the HNB to mitigate the growing demand, which would equate to a transfer of £1.4m.  Members were advised this would bring the total 2024-25 HNB budget to £86.4m and a net budget of £77.4m after deductions for allocations to other local authorities.

·             The changes made to the Early Years (EY) funding formula in order to reflect the changes to childcare entitlement which had been included within the Block Allocation and on which a separate report had been provided on the agenda.

·             The Central Schools Services Block funding split between two elements: funding for ongoing responsibilities (£55k increase) and funding for historic pension costs for centrally employed teachers (£66k reduction). The Central School Services Block income had been confirmed at £2.1m, representing a small decrease across both elements of £11k compared to 2023/24.

·             The Schools Block mainstream funding formula for 2024-25 as detailed within Table 2, which included £2.3m clawed back by the DfE to pay for Non-Domestic Business Rates directly to billing authorities on behalf of schools.  The Allocation included £0.7m excluded for the growth fund with £1.4m proposed to be transferred to the HNB.  Members were advised the allocation had been reduced by £0.790m for de-delegated funds with £0.519m retained by the council as a contribution towards fulfilling education services including school improvement services leaving a total of £268.77m to be transferred to schools.

·             Following previous approval by the Schools Forum, the DSG contribution to central services to fund education functions had been set at £0.6m (made up of a £0.250m contribution from all schools (included in the growth fund allocation) and £0.360m (from maintained schools only).  DfE guidance had, however, clarified that the £0.250m contribution could only be charged to the Central Schools Services Block of the DSG and not be funded from the growth fund with this element having subsequently removed from the growth fund, thereby releasing funds back to school allocations.  It was, however, pointed out that this additional cost could not be absorbed by the Central Schools Services Block and would therefore lead to a pressure to be managed against the Council’s General Fund budget for 2024/25.

·             In terms of the School Improvement Monitoring and Brokering Grant, members were reminded that the government had reduced the grant by 50% in 2022-23 before ending it in 2023-24 with local authorities permitted to de-delegate all improvement expenditure, including all core improvement activities.  The Forum had been advised in 2022 that the Council would cover the cost of the 50% (£0.109m) reduction in grant funding which had continued into 2023-24.  The Council had, however, now identified the need to make a £50k saving against that budget with members advised that, as a result, it was therefore proposed to increase the de-delegated amount from schools to £0.159m on the basis the local authority would continue to fund the balance of £59k for school improvement services to schools., This was in order to continue supporting the functions of the Setting and School Effectiveness Service, with proposals for 2025-26 to be presented to the January 2025 meeting of the Forum and the resulting budget having been detailed in the budget for education service within Table 2 of the report.

·             The proposed funding allocations relating to the de-delegated services and contingencies budget, as set out in Table 3 of the report, with the main changes relating to the funding allocated to support schools in financial difficulty given the increase in schools projecting an in-year deficit (£0.175m), the increase in allocation within the Schools Facing Financial Difficulties Fund (SFFDF) to £0.3m to support the cost of redundancies with further small increases in the funding allocation for licences and subscriptions and maternity and paternity supply cover and Trade Union services.

·             The update provided on Brent’s current growth fund criteria, with it noted that local authorities would be required, from 2024-25, to provide growth funding where a school or academy had agreed with the local authority to provide an extra class to meet basic need in the area (either as a bulge class or as an ongoing commitment).  As a minimum members noted this would require the local authority to provide funding to a level which was compliant with the formula set out within section 8.5 of the report, which the Forum would be required to approve in order to match DfE requirements, given the change in the current basis of allocating growth funding to schools from allocating funds for popular growth to allocating funds for pupil growth to meet basic need, on the basis the former was no longer supported by the DfE.

·           Members were also advised there were currently no formal agreements between the local authority and any of the schools to support growth in pre-16 pupil numbers to meet basic need, however there were c65 pupils who were expected to be placed in secondary schools during the year.  A budget of £0.116m had therefore been earmarked for arrangements with schools to place these children.

·           It was proposed to set aside a growth budget of £0.656m made up of £0.116m to provide extra classes to meet basic need for the pupils on the waiting list and £0.540m for the current Choice Advice and Fair Access Interview (CAFAI) arrangements with 3 schools to continue to meet the local authority’s requirement to meet basic need for children who had newly arrived in the UK and required additional educational support.

·           Members were advised that for the first time in 2024-25 the DfE had also allocated funding based on both growth and falling rolls.  These funds would be distributed based on the reduction in pupil numbers that local authorities experience each year with the calculation for 2024-25 based on the observed differences between the primary and secondary number on roll between the October 2022 and October 2023 school censuses and the requirement on schools to be Ofsted rated “good” or “outstanding” to be eligible for funding also removed from 2024-25 onwards.  It was, however, noted that where local authorities operated a fund, they would only be able to provide funding where school capacity data 2022 (SCAP) showed that school places would be required in the subsequent three to five years.  Based on a review of Brent’s SCAP falling rolls had been projected for the next 3 to 5 years for those schools eligible meaning the funding would not apply for the next financial year.

·           The update provided in relation to National Funding Formula (NFF) rates, with it noted that the government continued to take a gradual approach to transitioning the local formula progressively closer to the NFF with 2023-24 being the first year of that process.  Whilst a fixed target date by which the direct NFF would be in place had not been set members noted the expectation that a move to the direct NFF would be completed by 2027-28.

·           The DfE had provided the 2023-24 factor values including an Area Cost Adjustment (ACA) for Brent with minimum and maximum allowable rates also included with local authorities either moving towards the NFF within the allowable rates or using the actual NFF rates.  In line with this requirement, members noted the information on the proposed funding factor rates used in setting the 2024/25 Schools budgets, as detailed within Appendix A of the report.

·           The local funding formula factors used to set the budgets for 2024-25, which had been designed to maximise the allocation of the Schools Block funding to schools and make use of the increased funding available in 2024-25 to cushion the impact of the transition, as detailed within section 10.3 of the report.

·           In considering the update on the Funding Formula, the Forum was advised that the Minimum Funding Guarantee (MFG) threshold range for 2024-25 was between 0% and +0.5% and had been set at the maximum allowable rate of +0.5% enabling the per pupil funding rates to increase by the same proportion.  20 out of 76 schools required an MFG allocation which, under the proposals, had totalled £2.1m.  Members noted the adjustment had been included in the overall post de-delegations and education functions budget detailed within Appendix B of the report.  This contained an analysis of the funding formula by individual school, giving both the total formula funding and per pupil funding against the previous year, and also reflected changes to the pupil cohort data for individual schools.  As a result, it was noted 10 schools would see a reduction in overall budget share allocations for 2024–25 mainly due to falling rolls ranging from a 4% to 22% drop in pupil numbers.

·           In terms of an update on split site funding, the Forum was advised that following the government consultation on implementation of the direct national funding formula, the DfE had announced that from 2024-25 a standardised formula would be introduced to calculate the funding for schools with split sites with the aim of ensuring consistency across all local authorities.  This had been based on a specific split sites factor involving a basic eligibility and distance criteria with Brent’s allocation for split site funding made up of a lump sum of £151,847, plus £113.70 per pupil along with an allocation for partial funding at a reduced lump sum of £50,000 where schools partially met some but not all of the relevant criteria.  Table 4 in the report detailed the 2024–25 split sites funding allocations for schools that met the new criteria with the 2023-24 rates having been included in the baseline amounts used to calculate each school’s 2024-25 minimum funding guarantee and therefore protect schools from losing out as a result of the change.  Discussions had also been undertaken with the headteachers at each school to address concerns and respond to queries raised.

The Forum also received an update (in relation to Action Point 91 and 92 from previous meetings) from Shirley Parks, Director, Education, Partnerships and Strategy (Brent Council) on the Mayor’s Free School Meals (FSM) pledge for 2024 - 25.  The following key points were highlighted:

·             Following on from introduction of the FSM scheme during the 2023-24 academic year the Mayor of London had informed local authorities at the start of January 2024 that funding would be continued for the 2024-25 academic year (up until July 2025).

·             In announcing the schemes continuation, it had also been confirmed that the proposed price per meal would be increased from £2.65 to £3.00 per meal, which was higher than the government’s 2024-25 increased rate of £2.53.  Provision would also continue for Kosher meals, although this rate was still to be confirmed.  It was confirmed that the enhanced rates provided under the scheme had been designed to enable schools to fund the associated costs such as administrative and staffing costs of delivering additional FSMsalthough it was recognised that concerns had been highlighted that the rates (especially in relation to Kosher meals) fell short of the actual costs associated with FSM provision which continued to be raised with the Mayor’s office.

·             Under the scheme FSM would continue to be funded on the basis of a 90% up-take rate with returns needing to be provided by each school to the Mayor’s Office in January and March 2024 in order for final claims to be processed.  The local authority continued to work with schools in order to provide support, advice and guidance on the submission of these returns.

·             It was confirmed that the clawback of funding was not anticipated for any schools reporting take up of less than 90% and at this stage no further details were available on plans for the scheme beyond the 2024-25 academic year.

The Chair thanked officers for the report and asked the Forum if they had any questions in relation to the information provided.  As no further questions or comments were raised the Forum RESOLVED

(1)    To approve the transfer of (0.5%) £1.4m from the Schools Block to support the High Needs Block. Department for Education (DfE) regulations permit up to 0.5% of the Schools Block funding can be transferred with Forum approval.

(2)      To note the additional funding allocations to Brent, as mentioned in the Government’s Autumn Statement 2023.

(3)      To endorse the 2024/25 budget for the DSG Blocks, including the mainstream funding formula, to Full Council for approval.

(4)      To approve 2024/25 growth fund and the change in the current process of allocating growth fund to schools, in line with DfE’s mandatory requirements for the treatment of the growth fund allocation

The Chair the invited the Maintained School members represented on the Forum to consider the proposed de-delegation arrangements and as a result they RESOLVED (with one abstention) to approve the proposed de-delegation arrangements, as set out within the report, including the proposal to increase the allocation to fund redundancy costs for school-based staff from the de-delegated contingencies budget and the proposal to increase the de-delegated funds from schools to make provisions for the local authority to continue to support school improvement activities.