Governor Briefing

Funding Challenges 2012-13

Graham SinclairAssistant Director – Business Strategy

School Budgets 2012-13

• Government grant funds schools:– Dedicated Schools Grant (DSG)– Pupil Premium– Devolved Formula Capital Grant

• DSG 2012-13 “Flat Cash”– Sheffield £300m – £266m (89%) delegated

• Pupil Premium “doubled”- Sheffield increases from £6m to £12m

• DFCG decreased- by 80% from £8m to £1.4m

Pupil Premium

• Now based on “Ever 6 “ method

• £488 to £600 but still “doubled”

• Increases for all schools but benefits secondary schools especially

• Commitment to quadruple but likely amount could be £900 in 14/15

• DfE still to give guidance on monitoring

Nursery Budgets 2012-13

• Basic £ per pupil-hour rate unchanged at £3-62

• Quality supplement unchanged at <20p

• Social deprivation supplement uprated from <15p to <30p

• March budget figure is estimate only

• Actual cash depends on actual hours, counted termly

Primary Budgets 2012-13

• Delegated Budgets up £5m (3%)– £2m Pupil Premium– £2m higher pupil numbers– £1m new delegation

• £ per pupil up 1.7% (inc. Pupil Premium)

Secondary Budgets 2012-13

• Delegated Budgets up £3m (2.5%)– £2m Pupil Premium– £1m new delegation (inc. PFI)

• £ per pupil up 2.8% (inc. Pupil Premium)

Special Budgets 2012-13

• Delegated Budgets up £2m (10%)– £1.5m new places– £0.5m new delegation (inc. PFI and Becton

Hospital School)

• £ per place - up 6.8% (inc. Pupil Premium, but mainly reflects more expensive residential places, so that eventual savings are made on out of city places)

Centrally Retained DSG

• Reduction of £3m from £37m to £34m• Services for the most vulnerable pupils, eg HI/VI• Delegation of Maternity, Learning Support and

PFI• More delegation planned including swimming,

school meals, ethnic minority funding, MAST services, £6m

• Funding to be as close as possible to the delivery

• LACSEG reduction

Key Budget Issues 2012-13

• Minimum Funding Guarantee (MFG)– Government guarantee: 98.5% (£ per pupil)– Sheffield improved rate: 99.5%

• Outlook 2013-15– No Government grant estimates available– Use of school balances– National Funding Formula Framework– Local three-year budget estimates

• Un-inflated• Based on existing local formula

Key Budget Issues 2012-13

• Cost Pressures– Equal Pay liabilities (varies per school)– Utility contracts inflation <17%– Rates bills: funded at 100% per school (but

increased bills reduce total available for staffing etc.)

– Pay: 0% pay awards, but increments are a governor decision

– Prices: CPI currently 3.6% (RPI 3.9%)– Repairs and ICT Refresh

School Budgets 2012-13

• Conclusions– School budgets relatively protected, but– Cost pressures remain– Governors need to ensure Spending Plans

• Realistic over three years• Make provision for increments• Make provision for staff turnover costs• Move in line with pupil numbers• Avoid deficits

So What Challenges

• Monitoring and Accountability: how is funding used to increase pupil attainment?

• How is pupil premium used, to balance the budget and/or to support vulnerable pupils?

• Do governors recognise the story on these slides or are there different and further pressures?

• What about the National Funding Formula?• Are there approved plans for the school

balances?• What challenges are posed by the LACSEG?

How an Academy’s Local Authority Central Spend Equivalent Grant (LACSEG) is

Calculated

1. DSG LACSEG Funding.

• LACSEG is additional funding taken from the centrally retained element of Sheffield’s DSG allocation and given to Academies to pay for support services.

• Calculated by CYPF using specific Section 251 Lines (mandated by DfE) and pro rated based on academy pupil numbers as a percentage of pupils in the sector (e.g. primary) to produce a funding rate. For 11/12 this extra funding equates to around £108 per secondary pupil and £118 per primary pupil (pro rated from the date that the new academy opens). These rates are subject to annual change (e.g. delegation of certain central budgets will alter the funding rate)

• If a secondary school has 1,000 pupils then the additional DSG LACSEG funding to be taken from CYPF budgets and given to the academy would be £108 x 1,000 = £108,000

• LACSEG is intended to fund the academy’s use of discretionary support services provided by the Local Authority. Statutory services are still required to be provided free of charge for academy pupils

2. The DfE’s On Line Academy Calculator

• As well as the DfE’s DSG funding that supports central CYPF services the Department of Communities and Local Government (DCLG) also provides funding to Local Authorities to support various central services within CYPF.

• The DfE also require this DCLG support service funding to be taken into account in order to generate a second funding sum for each academy.

• For the DCLG funding deduction the DfE currently do their own

calculation independently of the Authority using a number of different lines in the Authority’s Section 251 statement. The Authority has no role in this current calculation methodology.

• Currently the DCLG funding given to academies is funded via a top slice of national DCLG funding totals and then allocated into a specific national fund for academies to access.

Cont..

• As a result of the national top slice each Authority then receives a lower level of DCLG funding. It is worth noting that each Authority’s loss of DCLG funding to the national academy fund is unrelated to the number of academies in their area. For Sheffield this deduction is currently around £1 million per annum.

• The DfE’s online academy calculator generates a sum of additional money to be given to each new academy from the national fund, taking account of local factors such as Section 251 figures, pupil numbers, sixth form numbers etc. Typically this on line calculator may generate a sum of additional funding for an academy of around 10%+ of the current school budget.

• Of this additional funding to be given to an academy the DfE will deduct from the Authority the DSG calculated element. The rest of the funding will come from the top sliced DCLG national funding totals that the DfE holds (see example).

Example: DfE Online Calculator Funding for Academy X

DfE On Line Calculator: 500,000 (Funding given to academy)

Less: DSG LACSEG : (108,000) (Deducted from Sheffield*)

DFE funding share 392,000 (Taken from DfE national pot)

So, of the £500k that academy X will receive £392k will come from the DFE’s national

DCLG funding pot and £108,000 will be deducted from Sheffield’s DSG allocation.

Until 12/13, for the first year only. After, there will be a maximum of DSG and DCLG LACSEG so much less funding for academies. Currently around £250 per pupil in total so the 1000 place secondary above would receive £250K maximum (a loss of £250K) and a 200 place primary, £50K

3. Future Developments in Academy LACSEG Funding?

• Academies should be aware that the current on line calculation methodology for academy DCLG funding will end after 2012/13 along with the current DCLG funding levels. The DfE have realised that the current high levels of additional funding are unsustainable as more schools become academies.

• The DfE are reviewing the option of introducing a national DCLG LACSEG funding rate per pupil unrelated to any local Section 251 data. A draft figure of around £156 per pupil has been suggested by DFE based on a national average, but this is not guaranteed and is subject to change.

• The DfE have indicated that the principle of a local DSG LACSEG deduction will continue, but again the final form of this deduction remains to be finalised and confirmed.

What the LACSEG pays for

• Maternity, Swimming, School Meals• Behaviour Support• Contingency funding, eg expanding schools,

schools in financial difficulty, support for vulnerable children

• Ethnic Minority Services• Admissions• Premises support for health and safety

Sixth Form Funding

2012/13

Background

2011/12 Changes• Reduced rate per learner (to college level)• Removal of contributions to teachers’ pensions• Phased removal of contribution to teachers’ pay

grant (25% per annum)• Reduced ‘Entitlement’ funding (all providers)

• Transitional Protection (to limit the effect of these changes). In Sheffield, £1.7m.

2012/13

Changes• Phased removal of Transitional Protection (in 4 equal

instalments or 3% per learner, whichever is greater). In Sheffield, -£459k for 2012/13.

• Second phase removal of teachers’ pay grant. In Sheffield, -£97k.

• National ‘rate per learner’ yet to be advised. Expected, March 2012.

• Amount of ‘Disadvantage’ and ‘Additional Learning Support’ funds yet to be advised. Expected, March 2012.

• Based on 11/12 rate per learner, in Sheffield, possible further reduction of approx £660k.

Why?

Factors affecting funding allocations :• Number of learners recruited in 11/12 = number

allocated in 12/13• Learner ‘disadvantage’ (post-codes, using IMD

2010)• Success rates in 2009/10• Size of learner programmes in 2010/11, e.g. 4 A

Levels = more funding than 3 A Levels• Changes to mix and balance of provision, e.g.

more funding for BTEC Engineering than A Level History