Agenda item

Dedicated School Grant - Central Reserve

 

To note the actions being taken to manage the Dedicated School Grant deficit in Rotherham, the additional funding allocated in the government spending review and the outstanding Department for Education (DfE) consultation on Special Education Needs & Disabilities (SEND) and Alternative Provision (AP) Funding and the DfE’s consultation response to ‘Clarifying the Specific Grant and Ring-fenced Status of the Dedicated Schools Grant (DSG)’

Minutes:

Consideration was given to the report which detailed the current and projected overspend on the Dedicated Schools Grant and the recovery plans in place to operate within its annual allocation and reduce the deficit over future years.

 

The report further outlined the national picture on the High Needs Block as part of the overall Dedicated Schools Grant and the additional funding the Government was investing in education in the next three years as part of its spending review.

 

In addition, attention was also drawn to the clarification on the accounting treatment of the Dedicated Schools Grant reserve and use of funds to mitigate the deficit following the Government’s consultation response in January, 2020.

 

The Committee were advised the Council had produced a deficit recovery plan to identify cost savings and reduce the cost pressures on the High Needs Block within the Dedicated Schools Grant. The four main cost pressures (also national pressures) were:-

 

·                High cost external residential placements and independent sector placements.

·                General growth in the number of Education Health Care (EHC) with a particular pressure identified for supporting young people post 16.

·                Growth in alternative provision placements linked to Pupil Referral Units as an outcome of permanent exclusions.

·                The growth in the number of pupils  who require specialist provision when their assessed needs cannot be met by  mainstream schools and academies.

 

In addition, the LAC Sufficiency Strategy, and specifically plans to provide care for Looked After Children within the borough, would also have a positive impact on the High Needs Budget.  The Council would be in a position to directly oversee each child’s Education, Health and Care Plan, and identify local provision that was in a position to meet their needs. 

 

The recent Government spending review announced additional funding for schools and high needs, compared to 2019-20, which would rise by £2.6 billion for 2020-21, £4.8 billion for 2021-22 and £7.1 billion for 2022-23.

 

In 2020/21 the £2.6 billion was split £1.9 billion to the Schools Block and £0.7 billion to the High Needs Block; and for Rotherham this was an additional £6.2 million for schools and £4.8 million in the High Needs Block.

 

The report further outlined the consultations on the conditions of grant and regulations and how they applied to the Dedicated Schools Grant.  The DfE’s consultation response to ‘Clarifying the Specific Grant and Ring-fenced Status of the Dedicated Schools Grant (DSG)’ was appended to the report.

 

It was also pointed out that the Government consultation response made it entirely clear on a statutory basis that a DSG deficit must be carried forward to be dealt with from future DSG income, unless the Secretary of State authorised the Council not to do this.

 

To assist in mitigating the DSG pressures in the High Needs Block local authorities it was noted that Councils could transfer monies (0.5%) from the Schools Block (£190m in 2019/20) to the High Needs Block if they had consulted and gained agreement from Schools and Schools Forum. If a Local Authority wished to transfer more than 0.5% then they needed to submit a disapplication request to the Secretary of State with a robust business case, which Rotherham was successful in doing in 2019/20.  A disapplication request to the Secretary of State was submitted to transfer 1.5% of the DSG Schools Block allocation (£2.8m) to the High Needs Block. The transfer was for one year only and to continue with the transfer of funding a new application was, therefore, required each financial year.

 

Despite the £2.8m transfer of funding into the High Needs Block, however, there was still a projected overspend of £4.6m (financial pressure would be £7.4m without the transfer) in the 2019/20 financial year, with the DSG deficit estimated to increase to £19.7m.

 

Due to the size of the DSG Deficit and in line with the DSG Operational Guidance, Rotherham submitted a Recovery Plan to the ESFA in June 2019 and continued to meet with the ESFA to monitor progress in its implementation.

 

The additional funding to the High Needs Block had now enabled Rotherham to operate within its DSG annual allocation at an earlier stage than in the original recovery plan, (from 2020/21 financial year) and, therefore, minimised further growth in the DSG deficit.

 

In considering the report the Committee, whilst recognising the DfE’s funding decision sought assurances that the funding could be sustained and this was confirmed.   The Council was working hard on its recovery plan and deficit and was happy for this to be monitored annually by the Audit Committee.

 

Grant Thornton, External Auditors, also confirmed the DSG had been added to their value for money work and a number of meetings had taken place with colleagues around the deficit and plans for recovery. 

 

Resolved:-

 

1.    That the actions being taken to manage the Dedicated School Grant deficit in Rotherham be noted.

 

2.    That the additional funding allocated in the Government spending review and the outstanding Department for Education (DfE) consultation on Special Education Needs and Disabilities (SEND) and Alternative Provision (AP) Funding be noted.

 

3.    That the DfE’s consultation response to ‘Clarifying the Specific Grant and Ring-fenced Status of the Dedicated Schools Grant (DSG)’ be noted.

Supporting documents: