Report by Neil Hardwick/Vera Njegic
Recommendation:- To receive the report and note the contents.
Consideration was given the report presented by Neil Hardwick, Head of Schools’ Finance which provided information on the 2020/21 outturn position of the dedicated schools grant (DSG).
A summary was also provided on details to maintained members of Schools Forum as to the surplus/deficit balances of the maintained schools within Rotherham.
The report also 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 two years as part of its spending review.
Further information was provided on the DSG central reserve deficit balance brought forward from 2020/21 being £19.9m. Pressures on high needs expenditure continued with a further deficit in 2020/21 of £2.0m which had contributed to a net deficit in the DSG Central Reserve of £21.3m after taking account of DSG balances in other DSG funding blocks and PRU balances.
The local authority had modelled the impact of the January 2021 early years census data and were expecting a reduction in funding of £222k.
The High Needs Block overspend was due to a number of factors; an increase in Education Health and Care Plans, an increase in the number of young people aged 16 to 25 with an EHCP who were now the responsibility of the Local Authority to fund, an increase in the number of children accessing higher cost provision and an increase in the number of pupils in Alternative Provisions (Pupil Referral Units).
In terms of Early Years the Government spending review announced additional funding for schools and high needs, compared to 2019-20, which would rise by £4.8 billion for 2021-22 and £7.1 billion for 2022-23.
In 2021/22 the £4.8 billion is split £4.020 billion to the Schools Block and £0.780 billion to the High Needs Block; the funding split for future years was still to be determined. For Rotherham this was an additional £5.5m for schools and £5.3m in the High Needs Block.
With regards to deficit balances individual schools were permitted to carry forward balances to be spent or replenished in subsequent financial years. In total, the carry forward on individual school budgets was an overall combined surplus of £3.180m.
Surplus balances, however, as of the 31st March, 2021 when compared with 2019/20 reflected an increase in year of £1.022m.
The increase in the level of surplus took account of the five schools that have converted to academies during 2020/2021. The in-year academy conversions were schools with cumulative balances of £303k as at 31ST March. 2020.
Of the total 2020/21 surplus balances, 10 schools hold balances above the thresholds set out in the Scheme for Financing Schools. The Scheme for Financing Schools sets out the financial arrangement between the local authority and the maintained schools. The scheme states that if a schools balance has exceeded the allowable surplus (8% of school budget share for nursery, primary and special, 5% for secondary) and allowing for commitments and any amounts assigned for a specific purpose then the local authority may deduct an amount equal to the excess balance.
Schools have recently submitted excess surplus balance plans detailing intended use.
Of the seven schools that were previously identified to be in deficit, three have now entered a surplus balance position, one had academy status with a deficit balance of £11k and three schools remain in deficit.
For all schools that were in a deficit position, individual three year budget recovery plans were in the process of being compiled. These would then be subject to formal review throughout the year.
A further update would be provided at the next Forum meeting in September, 2021.
Agreed:- (1) That the information contained within this report, particularly that the reserve balances have increased to £21.3m (centrally retained), be noted.
(2) That the deficit balance be noted, which was subject to change as this will be dependent on the early years adjustment for the Spring 2021 census count. Within the figures, an anticipated reduction of £222k has been accounted for.
(3) That a further update be provided for the next meeting.