National Funding Formula DfE 1 st Stage Consultation

1. National Funding Formula DfE 1st Stage Consultation Presentation to: Schools Forum 16 March 2016 Presented By: Andrew Redding andrew.redding@bradford.gov.uk 01274 432678

2. Seeking to Identify the Impact On • The District (the totality of resource available). • Individual schools, academies and other settings. • Individual students (especially vulnerable children and SEND). • The role of local decision making (Council and Schools Forum). • The role of the Council (including central budget management). From the 1st stage consultation = difficult to quantify 1,2 and 3; clear steer on 4 and 5.

3. 1st Stage Consultation • 1st of 2 stages of consultation. Closes 17 April. • Proposals on ‘Principles’ and ‘Building Blocks’. • No consultation yet on Early Years; ‘parallel’ (?) consultation. • Series of open questions, but likely large number of more technical responses, especially on MFG (the consultation raises lots of questions). • Stage 2 will hopefully give us the critical detail we need to assess impact. Timing of this will be affected by purdah for various elections. • No further announcements until after 5 May • No announcements between 26 May and 24 June

4. Key Proposals • Different changes to different aspects of school funding • Primary & Secondary & centrally managed DSG / ESG: ‘hard’ NFF • High Needs: no school-level NFF; continuation of local management but under a new formularised needs-led HNB distribution • Early Years: what does ‘parallel’ mean? • Transition April 2016 to March 2019 (though an on-going national MFG beyond 2018/19). • April 2019 isa critical date for primary & secondary (hard NFF). • Transition / protection / capping across all 4 Blocks; based on updated levels of spending (‘baselining’ on 2016/17). 5 years of designated transition for HNB (at least). • Stage 2 (late May / early June) will give us the critical detail

5. Overview - From April 2019 • Proposed NFF at school-level set by Central Government for primary & secondary, paid ‘directly’ to schools and academies. • No de-delegation; no local contingencies; no local growth fund; • Pupil Premium to continue for the lifetime of this parliament • Smaller value of centrally managed DSG / ESG as the role of the Council reduces to 3 core functions. Full formularisation of on-going centrally managed DSG allocations. • No ESG general rate funding for the Council or academies (after remaining protections for academies cease in 2020). • Continued local management of High Needs funding. • Review of the continued role of the Schools Forum. • Position of proposals on Early Years is still unclear.

6. From April 2019 – Primary & Secondary • NFF set by Central Government for primary & secondary, paid ‘directly’ to schools and academies. • NFF proposed to be made up of x4 elements: • £per pupil (Primary, Key Stage 3, Key Stage 4) • Additional Education Needs measures: • FSM Ever 6 • FSM (current measure) • IDACI • EAL3 • Low Prior Attainment (EYSFP and Key Stage 2, but likely to change) • School Costs: • Lump sum • Sparsity factor • Premises costs (business rates, split sites etc) • BSF • Growth funding • Area cost adjustment

7. From April 2019 – Primary & Secondary • MFG and Ceilings to continue to protect individual school and academy budgets (details to be determined) and to pay for these protections. • Proposed removal of the ‘notional SEN’ calculation. • Proposed NFF would not include pupil mobility nor a LAC factor. • The 1st stage consultation does not provide the detail on which to assess • impact (critical will be weightings and how the measures are used) • speed of transition (levels of protections).

8. High Needs Block 1 • Proposed continuation of: • Allocations of HNB funding to local authorities • Local funding arrangements • The Place-Plus framework (with some small technical adjustments) • The ability to fund centrally managed or devolved provisions outside Place-Plus • ‘Re-formularisation’ of each authority’s HNB funding, using population and proxy measures: • Low attainment (KS2 and KS4) • Health and disability (children in poor health and in receipt of DLA) • Disadvantage (FSM and IDACI) • Child population • Pupils in special schools and specialist Post 16 • Area cost adjustment • Minimum Funding Guarantee for both SEND and AP

9. High Needs Block 2 • Re-formularisation will redistribute funding between authorities. Substantial protection for at least 5 years based on 2016/17 spending. Intrinsically linked to changes in the Schools Block. • DfE Expectations: • Efficiencies are needed at authority-level (HNB provision to be afforded from the HNB allocation) and within individual settings. Authorities must begin now to address this. The DfE will provide support and capital funding to develop provisions (both resourced provisions and new free schools). • HNB transition issues are a first call on DSG reserves e.g. meeting any overspending in the HNB until new arrangements / savings are established. • Closer collaboration between authorities in commissioning and funding. • That authorities will consider the organisation of their alternative provisions (the DfE indicates it is looking at a review of AP “to make AP more rigorous” and this may affect funding arrangements).

10. Transition April 2016 to March 2019 • During 2016/17 • Local Authorities to begin restructures to align with new expectations / reduced functions and to respond to the cost efficiencies requirement in High Needs provision. Support and capital funding to be made available from the DfE for High Needs provisions restructures. • All schools and academies to respond to the efficiency agenda. An ‘invest to save’ fund to be made available by the DfE during 2016/17. • A ‘Baselining’ exercise for the new 4 DSG Blocks; to establish 2016/17 levels of spending (important for protections and caps) and the new Central Schools Block. • DfE vetting of DSG historic liability-based centrally managed funds (for us this is the DSG matched contribution to school improvement).

11. Transition April 2016 to March 2019 • Proposed at April 2017 and for 2017/18 and 2018/19 • The start of the redistribution of funding between authorities. • The DfE to calculate a ‘notional / shadow’ NFF allocation for every primary and secondary school and academy including a national MFG / ceiling. This to include Pupil Premium – does this mean anything? • This does not bring in a school-level NFF; the Local Authority with the Schools Forum continues to be responsible for local formulae funding until the end of 2018/19. Schools Forum will have to consider what to do in these 2 years e.g. stay the same or move closer to the notional NFF / what do to if we start to see a significant change in our level of Schools Block funding. • Proposal to permit local authorities that lose in their Schools Block to adopt a lower MFG e.g. minus 2.5% rather than minus 1.5%. • There are a number of areas where there a NFF formula solution is not yet proposed / not yet been found e.g. BSF, growth funding.

12. Transition April 2016 to March 2019 • Proposed at April 2017 and for 2017/18 and 2018/19 (continued) • Beginning of the formularisation of the HNB, with significant protection based on 2016/17 spending baseline. • Formularisation of DSG centrally managed funding e.g. for admissions • The merger of the ESG (general rate and retained duties funding) with the DSG. • Reduction of ESG general rate funding up to August 2017 followed by the cessation of this at September 2017 (only academy protections continue). Local authorities may be able to de-delegate to recover lost general rate funding. Expected reduction of retained duties funding as the Authority’s functions shrink. • De-Delegation permitted to continue until the end of 2018/19 (the speed of academy conversions in Bradford could re-determine arrangements sooner)

13. Immediate HNB Considerations • At April 2017 and for 2017/18 and 2018/19, the DfE proposes that 100% of the Schools Block must be spent on primary & secondary school and academy budgets i.e. Schools Block is ring-fenced and cannot be transferred to meet increasing High Needs Block costs. • Likely however, that the Early Years Block will not be ring-fenced in the same way. • Issues that may arise from the differing speeds of transition between the Schools Block (faster) and the High Needs Block (slower over 5 years), where we lose in the Schools Block and gain in the High Needs Block (which is what is expected simple recognising our current DSG distribution). • Earmarking of current DSG reserves to support HNB action (and meeting any overspending)?