Agenda item

Report of the Director of Education.

The Cabinet considered a report of the Director of Education, Libraries and Adult Learning, that was also being considered by Council on 14^th March 2017, that set out the context and financial implications of proposed changes to funding for schools and the Council’s proposed response to the consultations on the reformed funding formula.

In January 2016 the Department for Education (DfE) set out their intention to reform funding for schools and high needs through a consultation on the principles that should guide the funding for those two areas. In December 2016 the DfE launched a second stage consultation, which provided further detail, financial impact and timelines.

The report set out the context and financial implications of the proposed changes and proposed a response to the two consultations, attached as appendices to the report, to be submitted by the 22nd March 2017. The Schools Forum would also make a response to the consultation and it was expected that individual schools and governing bodies would also make a response.

The dedicated schools grant (DSG) funded the majority of the education system, in 2016/2017 the total amount of grant for Coventry was £275M. This was spent across three blocks/areas: Early Years; Schools; and High Needs. The majority of the resource funded provision for children and pupils across the city, although approximately £10M supported Local Authority infrastructure and specialist support services provided to the education sector.

There was always a forecast that the Local Authority would lose resource as part of this reform. Prior to the introduction of the DSG, the funding was allocated using a formula as part of the Local Authority settlement funding assessment. The introduction of the DSG removed resource from Local Authority control and transferred it into a ring-fenced grant. Coventry had traditionally topped up the schools funding recognising education as a local policy priority. When monies were transferred into the DSG this was done at the level of spend, locking this additionality put in by Coventry into the national allocation system. This meant that money raised through council tax in Coventry, could be funding provision in other parts of England. So, although this sought to equalise school funding nationally, it reduced fairness within the overall system.

As part of the consultation, high level financial implications had been published which showed the financial impact of the funding reform. These show that in Coventry the schools block would lose £2.8M in 2018/2019 rising to £5.4M (2.4%) by 2019/2020, whereas the High Needs block would increase by approximately £0.9M in 2018/2019 rising to £1.8M (5%) by 2019/2020. Individual school funding allocations would be calculated using a national methodology, and the Authority would no longer be required to run its local funding formula after 2018/2019. The published information showed that all schools in Coventry would lose funding under the new formula with the exception of 4; most between -1.1% and -1.5% per pupil by 2018/2019 and -2.6% and -2.9% per pupil by 2019/2020.

The published financial implications did not show the impact past 2019/2020 for losing schools and local authorities. Only 54% of schools nationally will have reached their new formula allocation by 2019/2020. This was because the new schools funding formula included a funding floor of 3% so no school could lose more than 3% per pupil. Further decisions in relation to the operation of a funding floor would be subject to decisions made at future spending reviews. The financial implications for Coventry schools if there was no protection and the 3% funding floor was removed, would be in excess of a £11M reduction.

The published financial implications for the high needs block did show the impact past 2019/2020 for gaining local authorities. These indicated that Coventry would have a further £1.8M increase on the high needs block, but that this would also be subject to decisions at future spending reviews.

RESOLVED that the Cabinet:

1.  Encourages individual schools and governing bodies in Coventry to make a response to the consultation by sharing the City Council response.

2.  Recommends that Council approves the consultation response to the National Schools and High Needs funding formula consultations.