Agenda item - SCHOOL FINANCES

Agenda item

SCHOOL FINANCES

To receive the following reports:

 

·         Dedicated Schools Grant

·         Overall Education Budget- this report is not attached to the agenda and will be circulated as a to follow paper

Minutes:

It was noted that Cllr Rick Jewell and Tony Theodoulou were in the meeting but had to leave due to other commitments.

 

Peter Nathan, Director of Education, Sangeeta Brown, Resources Development Manager and Louise McNamara, Finance Manager introduced the reports.

 

NOTED

1.    The first report which outlined the amount of funding received through the Dedicated Schools Grant (DSG) and covered the rules around each aspect of the grant and how it is spent.

2.    The DSG supports the education function and is the main source of funding for schools in terms of delivering education.

3.    There have been a lot of changes in funding arrangements and regulations some of which is detailed in the report.

4.    The recent changes have introduced four blocks; Schools Block (SB); High Needs Block (HNB); Early Year Block (EYB) and Central Services Block (CSSB). There is minimum flexibility for the Council to move money around these blocks.

5.    The two blocks that the local authority has direct input into are HNB and CSSB.

6.    Table 1 in the report shows that HNB is increasing, however 5 years prior to this there were no increases. This has created a lot of pressure leading up to the 2016/17 budget and then the introduction of the SEND reforms were introduced. Whilst the funding is now increasing in this block, it is not sufficient to meet the demands evidenced in Table 2 of the report.

7.    For CSSB a small amount of funding is provided to deliver statutory services to all schools including academies and free schools. For maintained schools no funding is received and the Council has to seek their approval to take back money to support maintained schools.

8.    Table 4 detailed the breakdown of the DSG. Most of this grant goes to schools for direct education, rows 4-6 are those that support central services. Appendix 1 contains a more detailed breakdown.

9.    The second report is the education budget and the table shows the broad areas grouped into for the finance system and details the gross spend, gross Income and net spend. Most of the income is the DSG, various streams of income come in to offset the expenditure. The fees and charges income is £3m.

10.The main areas funded from the council budget are; non schools human resources (ongoing pension costs of people retired on enhanced packages not in the last 4 years but the previous 20 years. This will gradually reduce year on year). The Children Centre costs around £1m every year and the rest is funding for statutory functions.

 

Questions, comments and queries:

·         On the education budget report regarding the overspend what are the political priorities for bridging the gap? On financial management there is a deficit, how is this being managed and where is the money coming from to cover it? Officers advised that the change in SEN legislation in 2014 meant that the age range was extended from 5-16 to 0-25 with no additional funding, some of the provision needed for those 16-25 is expensive. Also, the local authority has legal responsibilities to fund Education Health & Care Plans (EHCP). EHCPs have dramatically increased rising by approximately 10% per year. These legislative changes have meant that across the country many local authorities have high deficits in their HNBs. In London the average deficit is £10m. In Enfield, there is a strategy which will be in the management plan required and may need to be provided to the DfE. Enfield is looking at several things such as: bringing more children in high cost out of borough placements back into the borough; intervention work is taking place with autism and speech and language development (discussed under the exclusions item). A review of the HNB was conducted by EY which came up with a number of options which are being looked at presently in collaboration with working group from Headteachers and ‘Our Voice’. In the medium to long term this will help manage the deficit.

·         Where does the deficit come from? The deficit rolls on each year and does not impact on the Council and is separate to the Council’s core funding. It is clear in law that the Council cannot support the DSG.  DfE have recognised the issue around the SEND Reforms and the funding arrangements to support these and have instituted review arrangements for SEN in terms of the reforms and the funding to address this national issue. The £7m deficit will be reported this year and next year when the DSG is received, this deficit will the first call on this money. The Council has a responsibility to manage the DSG:, there is a management plan looking at early interventions and preventions strategies so that children’s needs are met earlier. Currently the interventions are not in place, as they are put in place this should reduce financial pressure. It is expected that this will take 5 years.

·         Regarding the EY review is there a tangible draft plan and what is the first priority? There is a capital building plan for SEN: there are detailed plans for autism and speech and language therapy although a little more work is needed on these, a new social, emotional and mental health school is being developed, a new satellite provision at Suffolk’s School. There are plans for various aspects of this.

·         Councillor Demiral, the Chair of the Finance & Performance Scrutiny Panel advised that the DSG is scheduled for the 11 March 2021 and advised that she could request that Fay Hammond includes a full explanation of the deficit and how this is funded within in the report for this meeting. The Chair requested that all members of the Children Young People & Education Scrutiny Panel are sent an invitation to this meeting so they can listen to this meeting.

·         The Council budgets that it will have a gross spend of £390m, a gross income of £385m, therefore there is a gap of £5.2m, is this a deficit? It was confirmed this is not a deficit it is the charge to the council’s general fund from the budget allocated for education services. This forms part of the budget setting process at the start of the year. DSG provides services and support for direct education, this does not encompass statutory function that the council has a responsibility to deliver.

·         An observation was made that the Admissions Service and Schools Capital Delivery Team that the gross spend is lower than the gross income. This is because some services can generate income and will have an income target. Following a query of how income is generated from the Capital Delivery Team it was advised that it is likely that this is from staffing vacancies.

·         How much money does the education department generate from schools buy back? It was advised that this was around £3m

 

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