Agenda item

This report sets out the proposed DSG Schools Budget for 2025/26 for consultation and agreement by Schools Forum ahead of the Council budget being set and approved by Full Council in February 2025.

(Agenda republished to include this item on 21 January 2025)

Folake Olufeko (Head of Finance, Brent Council) introduced a report, which set out the proposed DSG Schools Budget for 2025/26 for consultation and agreement by Schools Forum.  The Forum noted the following key points as part of the update provided:

·            In July 2024 the DfE announced almost £1.1bn through the Core Schools Budget Grant (CSBG) to support schools with their overall costs in the 2024/25 financial year, in particular following confirmation of the 2024 teachers’ pay award.  Grant allocation for Brent mainstream schools (excluding Special Schools) in 2024/25 was £2.56m.  This grant has now been rolled into the National Funding Formula (NFF) and included in the baselines of 2025/26 Schools Block allocations.

·            Along with the CSBG, the teachers’ pay additional grant (TPAG) and teachers’ pension employer contribution grant (TPECG) had also been rolled into the Schools NFF for 2025/26.

·            Table 1 within the report showed that Brent had seen an 8.7% increase for the schools block within the DSG.

·            Brent was set to receive a total DSG funding allocation of £432m in 2025/26 compared to £396m in 2024/25.  This represented an overall increase of £36m.

·            The growth funding allocation had increased to £1.8m compared to £1.2m in 2024/25.  This allocation was based on the difference between the number of pupils on roll in each school between the October 2023 and October 2024 school censuses.

·            The final High Needs Block (HNB) allocation had been announced as £90.3m.  This is £5.3m more than the allocation for 2024/25 and represents a funding increase of 6.3%. 

·            The 6.3% increase in funding in 2025/26 was considerably less than the 12% increase seen in EHCPs from September 2023 to September 2024.  It would, however, contribute towards funding any further additional pressures due to continued increases in the number of ECHPs.  A detailed breakdown of the HNB budget will be presented to Schools Forum in February 2025.

·            The government planned to continue the expanded roll out of funded childcare hours for parents of children from 9-months-old, up to 3- and 4-year-olds. Brent’s allocation of the Early Years’ grant for 2025/26 was £41.4m and this represented an increase of £7.1m (21%) compared to the last financial year, with the most significant changes reflected against the 2-year-old working parents’ entitlement which would increase by £1.9m ((58%) and under 2-year-old working parent entitlement set to increase by £4.2m (128%) based on the expansion of hours to 30-hours from September 2025.  Brent’s rates for the new financial year would rise to £13.32 for under 2s, £9.77 for two-year-olds and £6.80 for 3-and 4-year-olds.  Funding for Brent’s Maintained Nursery Supplementary Grant was set to increase by 13% to £1m at a rate of £7.08 per hour.

·            In 2025/26, the Central Schools Services Block (CSSB) would increase nationally for ongoing responsibilities that local authorities continue to have for all schools, while those local authorities in receipt of funding for historic commitments i.e. pensions will see a decrease.

·            In 2025/26, funding for the CSSB will incorporate allocations that were provided separately in 2024/25 for increased copyright license costs, TPECG, and CSBG for centrally employed teachers but an overall reduction of 3.5%.

·            As was agreed at previous Schools Forums, the DSG contribution to central services to fund education functions remains £0.360m, from maintained schools only.

·            In line with the Schools Forum approval to de-delegate £0.159m from the schools’ budgets for school improvement services in January 2024, it was proposed to retain this level of funding for the 2025/26 financial year.  The local authority will continue to supplement the cost of the provision of school improvement services to schools, by contributing an additional £0.59m to support the functions of the Setting and School Effectiveness Service.

·            Since 2024/25 local authorities need to provide growth funding where a school or academy has 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 local authorities will have to provide funding to a level which is compliant with the following formula:

secondary growth factor value (£2,350) x number of pupil x 1ACA

·       For Brent, the secondary growth factor value of £2,691 will be used for all school types.

·       The Schools Forum was being asked to agree to set aside a growth budget of £0.782m made up of £0.242m to provide extra classes to meet basic need for the pupils on the waiting list and £0.540m for the current CAFAI (Choice Advice and Fair Access Interview) arrangements with 3 schools to continue to meet the local authority’s requirement to meet basic need for children who have newly arrived in the UK and require additional educational support.

·       The government is taking a gradual approach to transitioning the local formulae progressively closer to the NFF over time.

·       The DfE has provided the 2025/26 factor values including an Area Cost Adjustment (ACA) for Brent.  Minimum and maximum allowable rates had also been included so local authorities must either move towards the NFF within the allowable rates or use the actual NFF rates.  In line with this requirement, , further details were provided within Appendix A on the proposed funding factor rates used in setting the 2025/26 Schools budgets.

·       The change in formula rates primarily allocates 25% of the additional pupil led funding through AWPU (Age-Weighted Pupil Unit) for all Primary and Secondary schools and targets schools with high deprivation via FSM as well as schools with a high number of pupils with EAL across both phases.

·       The Minimum Funding Guarantee (MFG) threshold range for 2025/26 was between (0.5%) and 0.0%.  The MFG had been set at the maximum allowable rate of 0%.  This means that the per pupil funding rates would increase by that proportion.  Under these proposals 30 out of 76 schools require an MFG allocation, and this totals £1.82m

·       Appendix B contained an analysis of the funding formula by individual school, giving both the total formula funding and per pupil funding against the previous year with changes in individual school funding caused by changes to the pupil cohort data for that school, for example, the number of pupils attracting the low prior attainment funding factor will change from year to year, so changes in funding are not solely driven by increases or decreases to pupil numbers.

·       21 schools are set to see reductions in overall budget share allocations in 2025/26 and this is mainly due to falling rolls ranging from 2% to 19% drop in pupil numbers.

·       The DfE has developed a split sites factor which recognises costs through a basic eligibility criteria that attracts a lump-sum payment of £62k, and a distance 600m eligibility criteria that attracts an additional lump-sum payment of up to £31k and 4 schools have been identified as eligible.

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

·       Whilst supportive of the paper and how the block funding was allocated, Ilana Myers queried if the growth fund was well utilised and also asked if the IDACI (The Income Deprivation Affecting Children Index) calculations were up to date, with details relating to the impact on her specific school having been sought outside of the meeting.  Folake Olufeko advised that a response on the specific details sought would be provided separately for Ilana Myers, with governors also welcome to attend additional training in relation to school funding arrangements.  Folake Olufeko clarified that the growth fund was a model based on the current waiting list and had input from the Corporate Director of Children & Young People in order to agree places.  In regards to the 2019 IDACI, it was confirmed this was the most current information from the DfE.

As no further questions or comments were raised the Forum RESOLVED to:

(1)      To approve the transfer of (0.5%) £1.48m 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 to be transferred with Forum approval.

(2)      To endorse the 2024/25 budget for the DSG Blocks, including the mainstream funding formula, to Full Council for approval in February 2025.

(3)      To approve the 2025-26 growth fund 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 to approve the proposed de-delegation arrangements, as set out within the report.