Consultation on School Funding Arrangements for

Shropshire Schools from April 2015

Meeting for Headteachers and Governors Lord Hill Hotel, Shrewsbury

2 October 2014

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Background

• Significant reforms to local school funding formula since 2012-13

• Government’s recently acknowledged current national schools funding system is unfair and out-of-date

• Government’s aim to move to a National Fair Funding Formula in next parliamentary term 2

Changes from April 2015

• Following consultation, Government announced, in July 2014, £390m of additional Dedicated Schools Grant (DSG)

• Allocated to lowest funded local authorities from April 2015

• Shropshire will receive an additional £297 per pupil from April 2015

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Changes from April 2015

• Based on October 2013 census data this equates to £10.37m – a 7.2% increase to the schools block element of the DSG

• Actual additional allocation will be based on October 2014 census data

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Changes from April 2015

• Additional funding delegated to schools must be through the local funding formula

• Allowable factors include:

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• Age Weighted Pupil Unit (AWPU)

• Lump Sum• Sparsity• Free School Meals• Low prior attainment

• Income Deprivation Affecting Children Index (IDACI)

• Split Site• Rates

Context

• Pupil numbers in Shropshire bucking national trend of demographic growth

• Projected decline in pupil numbers is not evenly spread across Shropshire

• DSG is based mainly on pupil numbers and so a fall in pupil numbers will reduce the funding for schools in coming years 6

Steer from the Administration

The Administration of Shropshire Council is determined to encourage collaborative working, consideration of alternative models of education provision and the more efficient use of delegated resources. It believes school governing bodies need to be challenged to address these issues and to ensure that the Shropshire school funding formula promotes more sustainable ways of working.

The formularisation of the potential additional funding for Shropshire schools in 2015-16 could offer a degree of protection, but only in the very short term for the most financially vulnerable schools in the remotest communities. However, this must be linked to increasing awareness and understanding within individual school governing bodies, and among clusters of schools, of the potential impact of significant falls in projected pupil numbers in their local areas over the next five years.

Any changes to the funding formula must place Shropshire schools in the best possible position to ensure a smooth transition to a national funding formula, which is likely to be implemented in the next parliamentary term.

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Recommended Changes from April 2015 - Overview

Following consideration of various models for allocating the additional funding using the allowable formula factors, Shropshire Schools Forum recommend:

•An increase to sparsity funding

•Remainder allocated on a per pupil basis (AWPU) across all Shropshire maintained schools, academies and free school

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Recommended Changes from April 2015 - Sparsity

• To capture Shropshire’s sparse schools the sparsity distance measure to remain at 3 or more miles for primary schools and 9 or more miles for secondary and all-through schools.

• The number on roll threshold to remain at <150 (21.4 average year group) for primary and <600 (120 average year group) for secondary

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Recommended Changes from April 2015 - Sparsity

• To achieve a fair and appropriate sparsity funding allocation, ensuring core funding covered core expenditure levels for small sparse primary schools, the sparsity funding increase to £50,000 on a tapered approach from £30,000 in 2014-15.

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Recommended Changes from April 2015 - Sparsity

• To achieve a fair and appropriate sparsity funding allocation, ensuring core funding covered core expenditure levels for small sparse secondary schools, the sparsity funding increase to £100,000 on a flat rate approach from £40,000 in 2014-15.

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Recommended Changes from April 2015 - Sparsity

Based on October 2013 data:

• 14 primary schools and one secondary school attract sparsity funding.

• This proposed increase to sparsity funding in Shropshire secondary and primary schools costs an additional £198,800.

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Consultation Questions

Question 1Do you agree with maintaining the sparsity criteria, in terms of distance and pupil number thresholds, as outlined in paragraph 15 of the consultation document, to ensure sparsity funding is targeted at Shropshire schools that are sparse?

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Question 2Do you agree with the basis for determining the additional sparsity funding recommended within the local funding formula from April 2015 as outlined in paragraphs 19 and 20 of the consultation document?

Recommended Changes from April 2015 – Pupil-led

•The remainder to be allocated on a per pupil basis through the AWPU

•Any increase to the AWPU funding within the funding formula to schools will have a corresponding impact on the level of minimum funding guarantee (MFG) a school receives.

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Recommended Changes from April 2015 – Pupil-led

•As AWPU increases, MFG reduces

•This release of MFG allows more funding to be allocated through the AWPU

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Recommended Changes from April 2015 – Pupil-led

•After taking into account the proposed increase to sparsity funding and the recycling of MFG, the additional funding allocated on a per pupil basis equates to £333 per pupil

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Consultation Questions

Question 3Do you agree that the majority of the additional funding should be allocated on a per pupil basis?

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Question 4Do you believe other local formula factors, as listed in paragraph 8 of the consultation document, should be used to distribute the additional funding to Shropshire schools and if so which and why?

Important Points for Schools

MFG impact

•For schools in receipt of MFG protection any new additional funding may either all, or in part, be offset by a corresponding reduction to their MFG allocation initially

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Minimum Funding Guarantee Example

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2014-15 2015-16NOR 72 NOR 72 Variation

£ £ £Pupil Led 203,761 227,765 24,004

Fixed 63,860 63,860 0

Additional AEN/SEN 1,673 1,673 0

High Needs Top Up 0 0 0

MFG 32,352 4,781 -27,571

Total 301,646 298,079 -3,567

Funding per Pupil £ £ £@ minus 1.5% 3,253.04 3,186.64 66.41

2015-16 NOR 72 X 72

Total 2015-16 MFG 4,781

Important Points to Note

Falling Rolls

•Schools with falling rolls will see reductions to their funding as it is mainly pupil driven

•MFG does not protect against a falling roll

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Important Points to Note

Increased Cost Pressures•Schools 2015-16 AWPU value will be determined after all 2015-16 DSG pressures, including high needs places and provision costs, are taken into account•Schools face increasing cost pressures in relation to pay awards, incremental progression, increasing employers’ pension contributions and non-pay inflation costs

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Important Points to Note

Collaborative Working

•Schools need to work together to find local solutions to falling rolls and funding over the next few years

•Need to ensure efficient use of delegated resources

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Budget Planning Tools

• School Funding Modelling Tool – to help schools estimate future year budget share allocations to aid budget planning

• Shropshire Benchmarking Tool – to enable Shropshire schools to compare their income and expenditure with other similar Shropshire schools

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30380

2014-15 2015-16 2016-17 2017-18 2018-19Nor Nor Nor Nor Nor

Reception Uplift 0 0 0 0 04+ 9 6 11 12 25+ 16 9 6 11 126+ 8 14 10 7 127+ 13 10 13 10 78+ 10 12 9 12 99+ 7 9 11 9 1110+ 9 7 9 11 911+ 0 0 0 0 0Total 72 67 69 72 62

Local Authority NOR Forecast 72 67 69 72 71

30380 A Primary School

2014-15 2015-16 2016-17 2017-18 2018-19Act Est Est Est Est

Nor 72 67 69 72 62

FSM % 0.00% 0.00% 0.00% 0.00% 0.00%LPA % 3.62% 3.62% 3.62% 3.62% 3.62%

£ £ £ £ £Pupil Led 203,761 211,593 217,914 227,136 195,324Fixed 63,860 63,860 63,860 63,860 63,860AEN/SEN 1,673 1,384 1,365 1,570 1,365Top Up 0 0 0 0 0

MFG 32,352 4,977 1,814 0 0

Total Budget Share 301,646 281,814 284,953 292,566 260,550

Budget share variation £ to prev -33,772 -19,832 3,139 7,613 -32,017% variation to prev yr -10.07 -6.57 1.11 2.67 -10.94

LA Budget Share Forecast 301,646 281,814 284,953 292,566 289,101

£ £ £ £ £Forecast Funding Per Pupil 4,190 4,206 4,130 4,063 4,202

Average Funding Per School 4,006 4,358 4,368 4,382 4,393

Year ending March 2009 March 2010 March 2011 March 2012 March 2013£ £ £ £ £

Final closing revenue balance 24,768 28,219 18,940 26,880 21,450

A Primary School

School Funding Modelling Tool Shropshire Council - School Funding Team

Estimated Future Years Budget Shares

Funding Per Pupil

Closing Revenue Balances

56

58

60

62

64

66

68

70

72

74

2014-15 2015-16 2016-17 2017-18 2018-19

Pupil Forecast 2015-16 to 2018-19

School Modified Forecast LA Forecast

£240,000

£250,000

£260,000

£270,000

£280,000

£290,000

£300,000

£310,000

2014-15 2015-16 2016-17 2017-18 2018-19

Budget Share Forecast 2015-16 to 2018-19

School Modified Budget £ LA Estimated Budget £

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Shropshire Benchmarking Tool

Developed By School Funding Team

0

500

1,000

1,500

2,000

2,500

3,000

Expe

ndit

ure

Teaching Staff Per Pupil

0

50

100

150

200

250

300

Expe

ndit

ure

Learning Resources Per Pupil

-5,000-4,500-4,000-3,500-3,000-2,500-2,000-1,500-1,000

-5000

Inco

me

Funding Delegated by LA Per Pupil-700-600-500-400-300-200-100

0

Inco

me

SEN Funding Per Pupil

Next StepsDate Action

22 September to 16 October 2014 Consultation with all Shropshire maintained schools, academies and free schools

2 October 2014 School Census

2 October 2014 Consultation meeting – invitation to all Shropshire maintained schools, academies and free schools

16 October 2014 Consultation with all Shropshire maintained schools, academies and free schools closes.

23 October 2014 Schools Forum consider consultation feedback

31 October 2014 Local authority submits provisional Schools Budget pro forma to the Education Funding Agency (EFA)

26 November 2014 Schools census database closed

10 December 2014 Cabinet meeting to approve funding formula

December 2014 EFA confirms DSG allocations for 2015-16

January 2015 LA submits final data for Schools Budget pro forma

February 2015 LA confirms budget for maintained schools. EFA confirms academies and free schools budgets.

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Any Questions?

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