Agenda item

This report sets out the final Dedicated Schools Grant (DSG) outturn against the budget set for 2023/24 and provides detail on the in-year 2023/24 surplus of £0.6m.

Folake Olufeko (Head of Finance, Brent Council) introduced a report presenting the final Dedicated Schools Grant (DSG) outturn against the budget set for 2023/24 with detail on the year-end 2023/24 surplus of £0.6m.  The Forum noted the following key points as part of the update provided:

·            Appendix A set out the DSG outturn in more detail and Appendix B was a reflection of the schools reserve balances following the closure of the schools accounts for the last financial year.

·            The DSG reported a surplus of approximately £0.6m against a £370.6m budget.  This surplus was a movement from the forecast deficit of £0.8m reported to Forum in February 2024 and was mainly due to a £1m underspend against the Early Years (EY) Block, £0.7m underspend against the Schools Block and £0.3m underspend against the Combined Schools Services Block (CSSB), offset by an overspend of £1.4m against the High Needs (HN) Block budget.

·            The cumulative DSG deficit carried forward from 2022/23 was £13.8m.  This had reduced to £13.2m at the end of 2023/24.

·            The Schools Block underspent by £0.7m from growth funds top sliced from school’s funding allocations to cover 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, mainly in secondary schools, for in-year growth in pupil numbers.  The actual growth in pupil numbers during the year was less than initial projections the budgets were based on.

·            The High Needs (HN) Block saw an overspend of £1.4m against a budget of £74.8m.  This was mainly due to the top-up funding for Post-16 provision, which led to an overspend of £1.8m and top-up funding for in-borough non maintained special schools and academies, which saw a £1.4m increase.   In addition, a £1.4m pressure had been identified against independent day and residential top-up funding due to increased number of pupils places in these settings along with £1.1m additional cost towards the education of pupils with EHCPs awaiting school placements due to increased numbers.  The Forum noted this reflected an increase in the number of children with an agreed Education, Health, and Care Plan (EHCP) which was 3,576 as at March 2024 compared to 3,309 as at March 2023 an increase of 8.1%.

·            The pressures in relation to the HN Block had been offset by a £0.8m underspend against the recoupment income expected from other local authorities that have placed children in Brent schools, following finalised confirmation of pupil information from schools and actual charges processed, £1.4m underspend against the SEN Services budgets, following the DfE’s mandate to all local authorities to transfer all expenditure relating to SEN services and Education Psychology being charged to the DSG to the local authority’s general fund budget and a £0.3m underspend against the SEN Support budget mainly from the budget allocated for the Graduated Approach programme.

·            Brent was a part of the DfE programme called Delivering Better Value (DBV) in SEND to provide dedicated support and funding to help Local Authorities reform their high needs systems.  The Council had received £1m grant funding allocated over two financial years 2023/24 and 2024/25 to deliver the actions in the Management Plan as well as cost benefits identified as part of the programme with the four workstreams developed with the DBV funding focussed around Intervention First, SEND Assurance, workforce and inclusive environments and commissioning and a further update on progress due to be provided for the Forum in November 2024.

·            The Early Years Block budget was £24.4m for 2023-24 with an underspend of £1m, which was mainly due to the DfE’s in year adjustment to Early Years Block funding following comp0letion of the January 2023 census.  The EY Block was a self-contained block based on headcount and The Forum therefore noted the risk that the DfE may claw back funding following a final in-year adjustment expected in July 2024 with the surplus will be held in reserves to offset any potential clawbacks.

·            The school balances had seen a decrease in reserves of £1.9m from the £15m reported in 2022-23 to £13.1m in 2023/24 (as detailed in Appendix B of the report).  Of the 56 maintained schools, 23 had increased their overall reserves balance (increase of £2.0m) and 33 decreased their balance over the 2023/24 financial year (decrease of £3.9m). Of the 47 maintained primary schools, 18 (38%) compared to 16 (34%) in 2022/23 increased their reserve balance by an average of £81k, and 26 (55%) compared to 31 (66%) in 2022/23 decreased their reserve balances by an average of £99k.  Four schools had cleared their deficit but four new schools had gone into deficit resulting in seven primary schools being in deficit at the end of 2023/24.  Of the 47 maintained primary schools, 18 had closed with balances of 8% or more and 29 had closed with balances of less than 8%.  Of the 2 maintained secondary schools, one had seen no significant change in reserves and the other had seen a 233% decrease in reserves, moving from a surplus reserve position in 2022/23 to a deficit in 2023/24.  The only maintained special school saw an increase in reserves of 67% with a £1.3m reserve balance.  One of the 2 PRUs decreased their reserves by 3% and the other saw a 59% reduction compared to balances in 2022/23.  Two of the four Nursery schools had increased reserves and the other two reported decreased reserves with one remaining in deficit since 2022/23.

·            In summary, the position regarding school balances presented a mixed picture in terms of how individual schools were managing their financial position with the figures suggesting that in 2023/24 schools in Brent had mostly continued to experience financial difficulty with many facing pressures to manage or improve their financial positions. The decrease in balances was partly due to the impact of falling rolls, where some primary schools have had a reduction in funding, as well as the impact of rising inflation which had led to increased costs of services and increased energy bills for schools.

·            It was expected that the funding and expenditure pressures within Brent schools would persist with the requirement for schools to take action to balance their budgets. Licensed deficit agreements to recover the deficit over a 3-year period would be arranged with the 4 additional schools in deficit who would be closely monitored throughout the year to review performance against their recovery plans and 4 schools will be supported by the DfE as part of the School Resource Management programme to identify ways to make better use of their resources to drive savings.

The Chair thanked the officer for her report and welcomed any questions from the Forum with the following noted:

·        As part of the agreement of the Schools funding formula for 2023/24 members were reminded that this had included an additional contribution towards HN Block where it confirmed that £1.4m had been allocated from the Schools Block to support pupils with high needs in mainstream schools which had been designed to support schools in managing the growth in demand being experienced alongside Additionally Resources Provision (ARPs). The ARPs programme was for targeted support for pupils in school and had been designed to relieve pressure in mainstream schools.  This funding ensured that every pupil was in the right place for the support that was required.

·        The Forum noted that some schools appeared to be managing more significant balances and levels of reserves than others with members advised in response of the actions being taken to monitor the position and ensure schools remained fully inclusive and best practice was shared.

·        Councillor Gwen Grahl (as Cabinet Member for Children, Young People and Schools) recognised the recent tough times that schools had been facing in balancing budgets and managing demand in relation to SEND and highlighted that there were a lot of other expenses like staffing and infrastructure and promised to continue lobbying for the best possible funding for Brent schools.

As no further questions or comments were raised the Forum RESOLVED to note the report.