Agenda item - DEDICATED SCHOOLS GRANT

Agenda item

DEDICATED SCHOOLS GRANT

To receive for discussion the attached report and presentation.

 

Minutes:

Councillor Birsen Demirel (Chair) invited Councillor Mary Maguire (Cabinet Member for Finance and Procurement) to introduce the report.

 

Councillor Maguire highlighted that the panel had received a comprehensive slide pack. The key issues were the adequacy of the Schools grant and the resulting overspend that is recorded. The biggest area of overspend is in the High Needs Block.

 

As the report details this block funds pupils with special needs from birth up to the age of 25 who have Education Health & Care Plans (EHCP) and require additional support. The regulation of funds do not allow movement between the 4 blocks without specific approval.

 

The SEND reforms and the changing needs of children and young people in Enfield have created acute financial pressures particularly for this HNB. An example of this is the number of children with EHCP’s has risen from 1150 five years ago to 2230 a year ago. The Council has taken a number of steps to deal with the increasing pressure and demand such as increasing SEND provision in the borough and increased support for early intervention.

 

Another area of concern is in the Schools Block there is a prescribed funding formula for individual schools and there is little flexibility for the local authority to target funding where there is a particular need. The total funding provided by the government each yeas reflects the changes in pupil numbers only. At the end of last year 16 of Enfield’s schools were in overall deficit. The figures are constantly under review and support is given to schools to assist them dealing with their deficits.

 

Sangeeta Brown, Resources Development Manager outlined in further detail the information set out in the report pack

NOTED:

1.     It was clarified that in terms of the council’s relationship with schools, the Council has a responsibility in terms of oversight for maintained schools both financially and educationally. Therefore, the Council has to have an overview of the balances that are held by schools. The Scheme for Financing for Schools stipulates how these balances are treated.

2.     The key concern for the Council is those schools reporting a deficit balance. Schools are required to work to a balanced position in terms of their budgets. When there is a deficit balance the risk to the Council is that if the school have a poor Ofsted judgement and is required to academize and be sponsored for that academisation, than the deficit will remain with the Council and the Council will have to fund the deficit that is being reported by the school.

3.     This is a major risk and the Council is working with the schools to reduce the level of deficits.

4.     Over the past year a process has been set up for supporting schools in deficit. The schools have been asked to provide a deficit recovery plan.

5.     An external consultant has been engaged to carry out reviews of four schools to assess the deficit recovery plan against what is happening operationally within the schools. The findings from these reviews are due shortly.

6.     The next stage will be to assess the findings against what is in the deficit recovery plan and look at opportunities for savings and seek the schools to revise their plans accordingly. Then a similar pattern will be followed with the other schools in deficit.

7.     The aim is for schools to report an in-year surplus in their balances and following this, remunerate the deficit over a number of years. So that they reach a balanced position.

8.     The High Needs Block (NHB) is to support children with SEND. The local authority is required to ensure the children with SEND receive the right level of support to meet their educational needs.

9.     Reforms to the SEND funding changed the age range from 5-16 years to birth to 25 years for support to meet their needs in any educational setting. There is a rising demand for support being seen, the key areas of high demand are children with autism and children with speech and language needs

10.  An external consultant recently carried out a review, from these findings a strategy going forward has been developed.  Since the reforms came in the local authority have been increasing in borough provision to prevent costly out of borough placements.

11.  From 2017/18 and planned to the end of next year the number of places in the borough will have increased by 500. It is hoped that there will be further increases in place numbers in 2022/23 and the following year. This will reduce the need to use costly independent placements.

12.  Early intervention strategies are being developed to support children with autism and speech and language needs. This is a new development agreed with the Schools Forum. This is an invest to save strategy with the aim of being able to support children early in their education so that their needs are met much more rapidly. This is due to start this September.

13.  It is hoped that the Council can then meet the demand and stem some of the requirements for Education, Health Care Plans reducing costs to address the overspend which is currently £8million.

 

Comments, questions and queries:

·         Whilst members were concerned to note the deficit in the HNB, they were pleased to note that the most vulnerable children are able to access the support they need. Clarification was requested on how much extra the cost is for out of borough placements compared to in borough placements. It was confirmed that approximately 900 children attend special schools. A lot of money is saved bringing children back into the borough. An example was provided of expanded provision at Durants special school. This allowed roughly 28 children to be bought back in borough. Out of borough placements cost in the region of £50k per child at Durants the costs do vary from pupil to pupil but is roughly half this figure. This savings for bringing these children back have been in the region of half a million pounds on an annual basis. All children cannot be bought back in borough once the child is settled and happy in a provision they would not be moved. However, this can be looked at on transition between primary and secondary for example. In most cases it is better for the child to be educated nearer to home this also reduces transport costs

·         How does Enfield with an expected 12 schools by the end of the year in deficit compare to other London boroughs on the number of schools in deficits? It was confirmed that 25 boroughs responded to a poll on the number of schools in deficits; 9 councils had between 1-5 schools in deficit, 8 had 5-10 schools in deficit and 5 have 10-15 schools in deficits. Enfield is similar to other boroughs on this. With the overall deficit Enfield is doing slightly better than others. The average deficit across London is roughly 10 million. The number of schools in deficits a growing number to the point where there is discussions and benchmarking on this topic across London.

·         A query was raised when this item was discussed at the Children, Young People & Education Scrutiny Panel around the deficit. It is understood the DSG was created as a ring-fenced grant to fund education. How does the £5.5 million deficit in the General fund, where does this stand in the general context, where does the DSG show on the Council’s accounts and what is the transparency of reporting this? Officers advised that the deficit is clearly marked in the Statement of Accounts as a reserve. The Budget Report sets out clearly that the DSG is a deficit and an area of risk with plans to address this over time. This is also in the Monitoring reports. The Director of Education confirmed that the Council is working very closely with schools to support them reducing their deficits. The Council has had some success working with schools and a number of schools have moved out of a deficit position over a number of years. There are considerable pressures on schools, Enfield schools will be getting this year roughly 1.5% increase in budget nationally the increase is 4%. Some schools are also impacted by reducing pupil numbers.

·         Following a query on whether demand is outstripping the increases from government in funding. Officers confirmed that whilst there has been an increase in the DSG, this includes 2 grants the Pay and Pensions Grant which has put into the overall grant for this year. So, schools are not getting a bigger rise as this grant is now included. This is also levelling up so some schools across the country are getting more.

·         Is the council allowed to have this deficit on the books for a number of years whilst it is addressed? It was confirmed that there is a plan to reduce over time. It is important to recognise that there will be increasing need over time. The plan will require investment in terms of early intervention, and time to invest in moving children from more expensive placements and providing that in borough placements. This plan will be put together more formally through the Schools Forum.

·         Can the deficits to keep increasing year on year can we keep doping this. Officers confirmed that this deficit can be carried forward. A number of other local authority have considerable higher deficits. Enfield has a multi-pronged strategy to deal with this issue such as increasing places within the borough, offering much more intervention, supporting schools with deficits to reduce these and working on more inclusion in Enfield’s mainstreamed schools.  A management plan will be developed to present top the DfE.

·         Table 1 and 2 in the report shows the spend on HNB has historically been higher than the allocation. Clarification was requested as to why the spend was similar in 2016/2017 through to 2018/2019 have been more or less the same but in 2019/20 and 2020/21 the spending was a lot more. It was clarified that the costs resulting from the reforms in 2015 did take a while to impact. We are now seeing a considerable increase in spend on 16-25-year olds. Some of this provision is extremely expensive. The reforms gave more power to parents. Parents have a preference for specialist provision.

 

Officers were thanked for their presentations

 

Supporting documents: