An Overview of Funding and Finance for Schools Forum Members Presented by David Bradshaw and David Dilling Thursday 25 September 2008 2 to 4pm - PowerPoint PPT Presentation

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An Overview of Funding and Finance for Schools Forum Members Presented by David Bradshaw and David Dilling Thursday 25 September 2008 2 to 4pm

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Title: An Overview of Funding and Finance for Schools Forum Members Presented by David Bradshaw and David Dilling Thursday 25 September 2008 2 to 4pm


1
An Overview of Funding and Finance for Schools
Forum MembersPresented by David Bradshaw and
David DillingThursday 25 September
2008 2 to 4pm
2
Origin of presentation
  • Last of set of three to brief Schools Forum
    members and so points out issues that are
    relevant to the Forum
  • Since most attending today have not attended
    previous sessions, a few slides are from the
    previous two presentations

3
Objectives of the Briefing Session
  • The activity will -
  • look at the Individual Schools Budget and how it
    is allocated to individual schools through the
    Schools Funding Formula
  • consider the issues that schools have in setting
    a budget including Special Education Needs (SEN),
    Additional Education Needs (AEN) and 3 year
    budgets.
  • consider the various systems and information that
    are available at both local and national levels
    with regard to ensuring schools operate their
    finances effectively and efficiently.
  • consider the role of the Schools Forum as it
    relates to reviewing and changing the
    distribution of funding and the finance systems

4
Discussions
  • There are no specific activities but I have
    indicated on several of the slides specific
    issues related to that topic and it may be an
    opportunity to discuss these before we move on.
  • Obviously if you have questions/ comments at
    other times then please raise them at the time.

5
Slides from the last sessionThe next few slides
are based on ones used in the previous session
and provide a link with this session.
6
How is education funded?
  • Since 2006/2007 the DCSF has allocated funding
    through the Dedicated Schools Grant (DSG) and
    part of whole council funding
  • DSG is calculated by number of children x
    /child
  • Number of children includes PVIs, SEN out
    borough, PRUs etc
  • DSG is fixed and is unaffected by any Council
    decisions
  • DSG is split into two parts

7
What is Contained Within Each Block?
  • Individual Schools Budget (ISB)
  • Delegated funding
  • Additional Education Needs
  • Statements
  • Centrally Retained
  • School Specific Contingencies
  • 14-16 Practical Learning Options
  • SEN (Independent placements, inter authority
    recoupment, etc)
  • Pupil Referral Units (PRUs)
  • Education out of school/Behaviour Support
  • Early Years/Private Voluntary Providers
  • Admissions
  • Grants such as School Development Grant, and
    other Standards Fund
  • Capital Expenditure from Revenue
  • Prudential Borrowing Costs

8
Dedicated School Grant
9
Central Expenditure Limit (CEL)
  • A calculation to ensure that the central part
    does not increase at a faster rate than the ISB
  • Not a simple calculation and affected by changes
    in funding by DCSF
  • Schools Forum can agree to breaches of limit

10
Minimum Funding Guarantee (MFG)
  • Introduced in conjunction with the CEL
  • Designed to guarantee a certain level of funding
    to all Schools in terms of delegated funding.
  • Increases in funding based on pupil numbers
  • MFG set nationally
  • 2004/05 4
  • 2005/06 5 Primary, 4 Secondary
  • 2006/07 4 Primary, 3.4 Secondary
  • 2007/08 3.7
  • 2008/09, 2009/2010 and 2010/2011 all 2.1 ie
    below expected inflation.
  • Not all of funding attracts MFG, but the majority
    of it does

11
Funding for the FutureWhat Happens Next?
  • DCSF will do another step change for 2011/2012
  • Changes happening towards a Childrens Service?
  • Will we get Combined Budgets?
  • Dedicated Childrens Grant rather than the DSG?
  • More interaction of Schools Forum with other
    partners such as PCT, Health services, Social
    Services, etc?
  • Changes in 14 to 19?
  • Whatever happens, funding is likely to change for
    2011/2012 onwards from what it looks like now
  • Need to be proactive with any consultation
    processes with the DCSF

12
New SlidesThe presentation is split into 2 main
sections- Where does a school get its money
from?- What measures are in place to ensure
schools spend effectivelyThe issues arising for
the Schools Forum are indicatedat various
places
13
Information from Teachernet
  • Guidance for LA and Schools Forums
  • Updated information around funding includes a
    number of papers over the last few months re the
    3 years 2008/2009 to 2010/2011
  • Calculators for some grantsapplicable for
    2007/2008
  • Guidance for Finance Standards FMSiS

14
Where does a school get its money?
15
School Income
  • Delegated funding through formula that is
    governed by DCSF legislation
  • Various grants- School Standards Grant (SSG)-
    Devolved Formula Capital- The Standards Fund-
    ?? (DCSF always seem to introduce new grants)
  • School led income- lettings, bank interest,
    sponsorship etc

16
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17
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18
What is the aim of the formula?
  • To provide a school with a fair share of the
    available resources so that it can address the
    needs of the pupils
  • The DCSF specifically require the formula to
    stand by itself and not be influenced by other
    grants
  • It is not intended that the formula should
    dictate how the school spends the formula
    funding, it is delegated!

19
An Ideal Formula How do you think it should be
characterised?
20
The Ideal Formula?
simple
transparent
address needs
responsive to changes in need


21
The Ideal Formula
simple Will it address the different needs?
transparent Will it address the different needs?
address needs Will have to have varied factors
responsive to changes in need Will need to change as the data changes


22
Delegated Funding Formula 2008/2009
  • Three main funding strands- Basic is the largest
    and funds the basic needs of schools/pupils-
    Additional Educational Needs (AEN) funds a
    proportion of pupils who need additional
    support- Highcost funds those pupils who have
    more extreme needs (statements)

23
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24
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25
Basic Funding
  • Age Weighted Pupil Units (AWPU)
  • Fixed including small school
  • Floor and site area
  • Issues/questions- more/less on AWPU? -
    increase/decrease proportion on basic?- Smaller
    schools have a greater proportion of the fixed
    and floor/site factors so less economic

26
Additional Educational Needs (AEN)
  • Free School Meals (FSM) for meals
  • The bulk of the funding through these
    indicators- Free School Meals- Index of
    Multiple Deprivation (Acorn FFT)- School Action
    Plus- Pupil mobility- Prior Attainment
  • Issues- which indicators are best to be used?-
    is funding going to the right pupils/schools?-
    Deprivation Review and 4 AEN types

27
The DCSF definitions
  • Learning Needs Associated with English as an
    Additional Language (EAL) costs tend to be
    associated with pastoral needs, agency liaison
    and teaching English
  • Learning Needs related to particular identified
    Special Educational Needs (SEN) such as autistic
    spectrum disorders (ASD), dyslexia, dyspraxia,
    attention deficit / hyperactivity disorder,
    speech and language difficulties, sensory
    impairment and physical disabilities costs tend
    to be associated with teaching assistants, SENCos
    and teaching
  • Other learning needs that could not be associated
    with either EAL, a particular identified SEN or
    social needs provision focused on attainment
    issues (additional teaching assistants) and
    emotional and behavioural needs and
  • Social Need, particularly focused on meeting
    behavioural needs.

28
Current factors in 2008/2009 formula but split
into the 4 DCSF AEN types
29
DCSF Deprivation review
  • Part of national government strategy
  • Now quantified so that we now know how well the
    DCSF considers we are addressing deprivation

30
The Deprivation Return to DCSF
31
Formula factor   total delegated total delegated total delegated total delegated   permissable permissable allowable   permissable permissable allowable
                           
FSM Provision   2,603,130 2,603,130 2,603,130 2,603,130   100 100 2,603,130   100 100 2,603,130
FSM Provision other AEN   2,331,880 2,331,880 2,331,880 2,331,880   100 100 2,331,880   100 100 2,331,880
SEN FSM   1,140,346 1,140,346 1,140,346 1,140,346   100 100 1,140,346   100 100 1,140,346
Social Deprivation   3,442,032 3,442,032 3,442,032 3,442,032   100 100 3,442,032   100 100 3,442,032
Looked After Children   - - - -   100 100 -   100 100 -
SEN by deprivation factor   1,585,275 1,585,275 1,585,275 1,585,275   100 100 1,585,275   100 100 1,585,275
SEN by Prior Attainment   1,531,788 1,531,788 1,531,788 1,531,788   100 100 1,531,788   75 75 1,148,841
SEN by NOR for School Action             0 0 -   0 0 -
AEN by EAL   1,670,832 1,670,832 1,670,832 1,670,832   100 100 1,670,832   0 0 -
SEN by School Action   995,616 995,616 995,616 995,616   0 0 -   0 0 -
SEN individual statements   608,698 608,698 608,698 608,698     0       0  
SEN resource bases in schools   945,092 945,092 945,092 945,092     0       0  
Learning Support Units   - - - -   100 100 -   100 100 -
Personalised Learning G T   188,472 188,472 188,472 188,472   100 100 188,472   0 0 -
Personalised Learning Falling Behind   1,735,812 1,735,812 1,735,812 1,735,812   100 100 1,735,812   75 75 1,301,859
PLearning Deprived access to extended Schools             100 100 -   100 100 -
High Turnover   1,155,816 1,155,816 1,155,816 1,155,816   100 100 1,155,816   5 5 57,791
S52 1.4.2 FSM Eligibility   - - - -   100 100 -   100 100 -
S52 1.3.2 Behaviour Support Service   - - - -   19 19 -   19 19 -
SEN AWPU   523,781 523,781 523,781 523,781     0       0  
LINE TO BE DELETED                          
LINE TO BE DELETED                          
AWPU re AHs as per DCSF table   1,931,406 1,931,406 1,931,406 1,931,406   100 100 1,931,406   100 100 1,931,406
AEN prior attainment   1,304,287 1,304,287 1,304,287 1,304,287   100 100 1,304,287   75 75 978,216
TOTAL                 20,621,075       16,520,775
                           
of funding allocated for deprived pupils directed towards deprived pupils of funding allocated for deprived pupils directed towards deprived pupils of funding allocated for deprived pupils directed towards deprived pupils of funding allocated for deprived pupils directed towards deprived pupils of funding allocated for deprived pupils directed towards deprived pupils of funding allocated for deprived pupils directed towards deprived pupils       72       80
32
DCSF Deprivation review
  • Part of national government strategy
  • Now quantified so that we now know how well the
    DCSF considers we are addressing deprivation
  • How do we increase deprivation funding?-
    allocate extra to deprivation factor- introduce
    a Looked After Children factor
  • How can we get the right split between the 4 AEN
    types?
  • Are all indicators as accurate as others?

33
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34
Some issues around indicators
Indicator Advantage Disadvantage
FSM Easy to process Is it uniformly identified?
IMD Identifies need but is it educational?
School Action Plus If identified then need greater Determined by school
Prior Attainment If low then need greater Affected by school
35
Highcost funding
  • This is related to statemented pupils- funded
    for actual hours above threshold- by formula for
    most of the funding using AWPU, FSM, Prior
    Attainment and IMD
  • Also pupils in resource bases but only primary
    until now
  • Issues- an area which has been high in comment
    re perceived underfunding and Other Local
    Authority pupils- lack of resource bases for
    secondary pupils

36
Minimum Funding Guarantee
  • This was introduced by the DfES to ensure that
    there was not excessive turbulence at school
    level following the difficult 2003/2004 year
  • The methodology has stayed virtually the same but
    things have moved on and so there are some
    schools that had been over protected.
  • The Schools Forum was able to adjust the
    calculation for up to 20 of schools to address
    anomalies that have arisen and that action was
    taken for 2007/2008 allowing for several 100k to
    be released to the main formula and similarly in
    2008/2009.

37
Major Issues for the Schools Forum
  • Need to ensure that the formula addresses the
    needs of pupils/schools and in particular the
    DCSF Deprivation Review requirements without
    being distracted by other short term grant
    funding or additional private income.
  • Support the need for schools to be able to
    predict funding for 3 years ahead
  • There is an increase in groups of schools being
    collectively responsible for various things
  • Supporting children with Special Educational
    Needs
  • The DCSF proposals for April 2011 and following

38
Issues re supporting SEN in schools
  • The main issue is that schools are funded for
    elements of SEN but not all schools accept their
    responsibility to take a share of these pupils.
    Eg Accepting pupils with statements or those with
    other needs.
  • Some possible considerations
  • Set up more resource bases especially secondary
  • DCSF is promoting clusters of schools to take on
    the responsibility for all children in an area
  • Out borough placements are very expensive and we
    need to make better use of in borough provision

39
Issues re supporting SEN in schools
  • The main issue is that schools are funded for
    elements of SEN but not all schools accept their
    responsibility to take a share of these pupils.
    Eg Accepting pupils with statements
  • Some possible considerations
  • Set up more resource bases especially secondary
  • DfES is promoting clusters of schools to take on
    the responsibility for all children in an area
  • Out borough placements are very expensive and we
    need to make better use of in borough provision
  • But most of all promoting understanding in all
    schools (heads, governors, SENCOs etc) that any
    excessive claims for more resources comes from
    one fixed pot for all aspects of education.

40
Dedicated School Grant
41
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42
How do schools cope with changes in funding?
  • Since 2003/2004 most schools have had to
    restructure in order to balance their budget
  • Since then funding has increased again above
    inflation but so have the demands, the latter
    including personalisation
  • In 2006/2007 many schools DID have another
    effective drop compared to other schools and they
    have had to cope but 2007/2008 some of this was
    returned.

43
Schools and AEN/SEN
  • consider the issues that schools have in setting
    a budget including Special Education Needs (SEN),
    Additional Education Needs (AEN) and 3 year
    budgets. From initial objectives
  • We have addressed some of this but
  • Obviously schools would like more resources but
    where this is limited (as with the DSG) the
    Schools Forum needs to be in the lead of
    supporting schools understanding of why they need
    to manage within the resources available.
  • They also need to ensure the various
    splits/formula are fair to all children, this
    including in the future the Private, Voluntary
    and Independent early years providers.

44
Other Changes from April 2009
  • Funding 14 to 16 Diplomas
  • Similar funding for all Early Years children in
    all settings including nursery classes and
    schools. Consultation very soon
  • Also LAC, new classes, vertical grouping,
    secondary resource bases being consulted on soon
  • Reduction and reallocation of balances is still
    on the DCSF agenda if there is no reduction.
    Note 5 and 8 represent the threshold before it
    is considered excessive and not the target or
    average.

45
More Provocative Statements!
  • If the funding is to be distributed fairly then
    the Schools Forum needs to be prepared to make
    the necessary decisions to redistribute the
    funding.
  • However, the difficult part is determining what
    is the fair distribution and not so much on the
    ability of the school to cope!
  • All schools can adjust their budget so that they
    can work within a fair budget although for some
    it will take a couple of years to achieve.

46
Any Other Questions or Issues related to the
funding of children either through schools or
individually?
47
Finance ArrangementsThis section will look at
the areas that define how schools should manage
their finances and the Schools Forum role.And
is much shorter!
48
Finance Arrangements
  • Schools Forum now has the responsibility to agree
    changes to the Scheme for Financing Schools.
  • The Scheme is an overarching document that
    describes how schools operate their finances in
    the context of the LA and DCSF requirements.
  • The DCSF will probably continue to advise about
    changes needed

49
The Scheme areas
  • Introduction
  • Financial controls
  • Instalments of budget share banking arrangements
  • The treatment of surpluses and deficit balances
    arising in relation to budget shares
  • Income
  • The charging of school budget shares
  • Taxation
  • The provision of services and facilities by the
    Authority
  • PFI clauses
  • Insurance
  • Miscellaneous
  • GM Schools
  • Responsibility for repairs and maintenance
  • Community Facilities

50
Issues that relate to the Scheme
  • At present there are none outstanding although
    some changes will need to be agreed shortly
  • But there may be in the future.
  • A previous example is recovery of excess balances
  • The issue is that the Schools Forum needs to
    think of the whole community of children in
    Croydon and not just selected schools.

51
Financial Management Standard in Schools
  • This is now compulsory for all schools as
    Internal Audit are now using it as the basis for
    all internal audits of schools.
  • No real issue but Schools Forum and LA need to
    have confidence that schools are operating their
    finances efficiently and effectively otherwise
    the collective role can be affected if one or
    more of the schools requires extra support.

52
Local Arrangements
  • CYPL Finance (schools) co-ordinate the funding
    and monitoring
  • Also co-ordinate VAT claims, Construction
    Industry Scheme
  • Schools provide LA with - budget plans-
    quarterly returns- end of year return- bank
    reconciliations (if requested)

53
Any questions?
54
The End
55
Croydon Schools the figures
  • Cash Terms ISB Central Total
  • m m m
  • 2005/06 150.7 24.3 175.0
  • 2006/07 161.2 25.2 186.4
  • 2007/08(Est) 171.7 26.9 198.6
  • ISB Central Total
  • 2005/06 n/a n/a n/a
  • 2006/07 6.96 3.70 6.50
  • 2007/08(Est) 6.50 6.50 6.50
  • In pupil number terms the increase was 7.3 in
    2006/07 and will be 7.2 in 2007/08. As pupil
    numbers fall the percentage fall in cash terms
  • Croydon has benefited from an injection of
    specific funding into the DSG including funding
    to bring Croydon back up to the old Schools FSS
    threshold
  • Not all Schools will be guaranteed levels of 6.5
    increases in 2007/08. This depends on amongst
    other things pupil numbers and targeted grant
    allocations
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