Agenda item

This report sets out the Dedicated Schools Grant (DSG) for the financial year 2014/15 (1st April 2014 to 31st March 2015). The balances reported are taken from the Consistent Financial Reporting (CFR) data provided by schools to the Education Funding Agency (EFA).

In the absence of Andy Rennison, DM spoke to the report. He noted that table 1 page 9 showed that more was spent than came in, in 14-15. He noted that this was not sustainable, but reflected the pressures on the budget. He said that it had been addressed through 2 year old funding overspill.  He said that Table 2 showed the overspend in High Needs.

He said that a number of schools had been or continued to be in financially challenging circumstances, but added that funding was not an open door. He said that schools did need sustainable arrangements for the medium to long term, though there was provision in the short term. He noted that as funding continued to tighten, there will be more pressures on this type of funding. He added that there was likely to be a move to equalise funding through the National Funding Formula.

A forum member asked if the contingency level was normal. RO said that it was a lot higher due to unspent two-year old funding, almost 3 million of two year old spend. DM noted that work in high needs was necessary, as demand was increasing but income falling.

CF asked if there was a Communications strategy to Heads on nursery places.

DM said that there would be a lead in period to any change. He said that the local authority was not changing in its position, but would adjust in relation to Government policy.

MP noted that there may be a mismatch to the 30 hour offer and the rate paid for a full-time place.

DM said that while the current expenditure was unlikely to be met, the additional funding would be helpful.

DM won't change primary and secondary split either . 

WL stated that falling numbers of pupils in the borough would create the most issues for schools

DM said that the expectation was stable numbers, but there was a need capacity to support schools with falling rolls. He noted that there were more places than demand in some areas, and that needs to be kept under review. He noted that on page 11 of the report, a school had asked for a proposal to establish a provision to establish a falling rolls fund. This set aside a portion of funding which automatically be available to Good or Outstanding schools whose numbers fell by a certain percentage. This approach had never previously been adopted in Hammersmith and Fulham. DM said that the decision was for schools and the Schools Forum, however.

DD asked if there was a trend or common denominator to schools which experienced a dramatic drop in rolls.

DM said that it tended to follow an event, which triggered further consequences. He gave examples such as Phoenix and Sulivan as schools who had received additional funding in these circumstances. He said that the local authority expected schools with falling rolls to look to improve their offer, especially where there had not been such an event.

DC asked how financial support for schools was carried out now.

DM said that funding is available through the balances in the Fund. By contrast, a fund for falling rolls would be annual, and would put money aside from the main Schools Block. All schools would contribute to a fund for falling rolls.

MP asked if the likelihood of reduced underspends and related impact on balances strengthened the case for a falling rolls fund.

DM explained that the timeframe for introducing a falling rolls fund. He noted the schools also had a Minimum Funding Guarantee which reduced the rate at which their funding could fall.. GK noted that top-slicing the funding could create pressures on all schools.

MP asked if academies would be affected by the introduction of a falling rolls fund. DM said that this depended on where they fell in terms of contribution.

The Forum asked to receive a paper on the establishment of a falling rolls fund at its October meeting.

School Balances

DM noted these were shown in Appendices 2 and 3, with committed and uncommitted. He said that the local authority would look at movement from year to year, as it will show schools’ financial health if they are using uncommitted balances to subsidise in year expenditure. He noted that there was £5 million uncommitted.

MP asked about balances at academies. TS said that accounts were published on an academy’s website. DM said that officers would gather that information to present as a comparator. 

DC asked whether it was possible to judge the effectiveness of the formula from the balance levels. DM said that the formula was broadly correct, though it was difficult the

In response to comments by GK on the percentage of budget spent on staff, DM noted that this was often over 80%. GK noted the need for schools to take responsible decisions on that, and that schools needed to be notified of this. DM said that the local authority would be re-emphasising to schools the need for 3 year budget plans, and would look at returns and CFR budgets to see the reasons for allocation

MP noted that balances were kept relatively high at his school, given the instability of funding for children’s centres, with money kept high in case of the funding being discontinued.

DM acknowledged this, but noted that that schools needed to align expenditure with income in the medium term.

WL asked if the level of uncommitted balances was concerning.

DM said that this was a Forum matter. The Forum would need to consider whether schools were retaining excessive balances.

In response to a question from AF, DM acknowledged that there would need to be work with individual schools to understand what was committed, the documentation supporting that, as well as the extent to which balances would be used to support expenditure. He noted that there were legitimate reasons why carryforward would be growing, and gave schools planning for future works as an example.

RESOLVED

(i)            That the report be noted, and

(ii)           That a report be on the falling rolls fund be presented to the next meeting of the Forum.