Part 1
ITEM NO.
__________________________________________________________________
Joint report of
the STRATEGIC DIRECTOR FOR CHILDREN’S SERVICES and
the DIRECTOR OF FINANCE AND CORPORATE BUSINESS
to SCHOOLS FORUM
on 8 JULY 2015
__________________________________________________________________
TITLE: DSG dedicated schools grant outturn 2014/15
__________________________________________________________________
RECOMMENDATION:
It is recommended that Schools Forum:


notes the DSG outturn position for 2014/15
notes the council’s intentions regarding fund surpluses within the high needs
block and de-delegated elements of the schools block
 determines that the small over spend in the central services (growth fund)
element of the schools block be met by the growth fund in 2015/16
 agrees to the proposals made in section 4.4 for the use of surplus funds in the
early years block
_____________________________________________________________________
EXECUTIVE SUMMARY: The report shows the provisional outturn position on DSG
dedicated schools grant for 2014/15. It sets out:

a forecast underspend on NDSB non-delegated schools budget of £5.5m for
2014/15;
 an accumulated surplus DSG balance of £6.6m at 31 March 2015,
predominantly in the high needs and early years blocks;
 reasons behind the surplus;
 proposals for carrying forward the surplus in line with School and Early Years
Finance Regulations.
__________________________________________________________________
BACKGROUND DOCUMENTS: Budget monitoring and provisional outturn working
papers 2014/15; DfE DSG publications
__________________________________________________________________
KEY DECISION:
No
__________________________________________________________________
KEY COUNCIL POLICIES: Budget Strategy
__________________________________________________________________
EQUALITY IMPACT ASSESSMENT AND IMPLICATIONS: The areas of expenditure
within the non-delegated budget of dedicated schools grant ensure that young people
have a full access to educational opportunities. Many of the lines of expenditure are dedelegated by schools back to the council to facilitate the ongoing provision of central
services.
__________________________________________________________________
ASSESSMENT OF RISK:
Low. There is no risk of an over spend in 2014/15. The risk for future years is likely to
increase with government funding restraints. Careful planning for the use of the current
surplus will help to mitigate the future risks.
__________________________________________________________________
SOURCE OF FUNDING: DSG dedicated schools grant 2014/15
__________________________________________________________________
LEGAL IMPLICATIONS: Supplied by: n/a
__________________________________________________________________
FINANCIAL IMPLICATIONS Supplied by: Chris Hesketh, strategic finance manager
__________________________________________________________________
HR IMPLICATIONS: Supplied by: n/a
__________________________________________________________________
PROCUREMENT IMPLICATIONS: Supplied by: n/a
__________________________________________________________________
OTHER DIRECTORATES CONSULTED: n/a
__________________________________________________________________
CONTACT OFFICER: Chris Hesketh, chris.hesketh@salford.gov.uk, 0161 793 2668
__________________________________________________________________
WARD(S) TO WHICH REPORT RELATE(S): All.
__________________________________________________________________
REPORT DETAIL:
1
Introduction
1.1
Dedicated schools grant (DSG) is split into two areas of school budget. The first relates to
the funding allocated to schools, known as the individual schools budget (ISB). The second
relates to non-delegated expenditure which includes expenditure incurred on behalf of the
schools by the council, known as the non-delegated schools budget (NDSB). Each area is
further subdivided into the three main funding blocks of early years, schools and high
needs.
1.2
From 1 April 2013, some elements of NDSB funding were delegated to schools. Each year,
Schools Forum may determine to “de-delegate” that funding back to the council for central
service provision. Academies are excluded from de-delegation but may choose to buy the
same services from the council through service level agreements where they are made
available.
1.3
The ISB is passported in full to schools and any surpluses or deficits on expenditure against
funding are therefore captured within individual schools’ balances. This report is concerned
with the NDSB element, plus de-delegated sums, where expenditure is managed by the
council and which may be over or under spent against budget plans, resulting in a carriedforward balance. The council and Schools Forum have roles in planning for the use of any
such balances.
2
DSG NDSB Outturn Position 2014/15
2.1
The total NDSB budget position is reported on a monthly basis to Children’s Services
Assistant Mayor and Budget Scrutiny Committee as part of the monitoring of Children’s
Services budgets.
2.2
The final outturn position for the NDSB is detailed in table 1 below. It forecasts that
expenditure for the NDSB will be below budget by £5.505m at the year end.
Table 1. Non-delegated schools budget 2014/15
Independent Special Schools
Alternative Education -PRU’s
Learning Support Service
SEN Top Up Funding
Post 16 SEN
Inter Authority Recoupment
SEN Other Faith
SEN Other
Total high needs block
Early Years Central
2 Year Old Funding
3 and 4 Year Old Funding
Total early years block
Central provision:
Growth Fund
VER Provision
Carbon Reduction (PRUs)
Licencing
LSCB
Top Sport
Notschool
Virtual School Team LAC
Finance Support
Primary SPA
Admissions
Playing Fields
Schools Other
De-Delegated:
Supply Cover
Schools Contingency
FSM Eligibility
Behaviour Support
Inclusive Learning/EMTAS
Total schools block
Total NDSB
2014/15
Provisional
Budget
Outturn
£000
£000
2,929
2,848
2,910
2,788
1,750
1,573
7,287
6,288
1,455
643
730
42
525
494
20
11
17,606
14,687
1,813
1,639
5,021
3,992
5,768
4,380
12,602
10,011
2014/15
Variance
£000
-81
-122
-177
-999
-812
-688
-31
-9
-2,919
-174
-1,029
-1,388
-2,591
1,935
135
5
81
22
34
97
134
43
64
148
98
9
2,097
61
3
81
22
34
97
138
43
63
148
74
9
162
-74
-2
0
0
0
0
4
0
-1
0
-24
0
662
56
57
57
408
4,045
34,253
631
27
57
57
408
4,050
28,748
-31
-29
0
0
0
5
-5,505
In this table, a positive variance denotes an overspend, a negative variance an underspend.
3.
Reasons for major variances
3.1
High needs block
The majority of the under spend arises within SEN top-up funding, post-16 SEN and interauthority recoupment.
There are many reasons for the variance, SEN top-up resource is very difficult to predict
and it is important to retain sufficient funds to meet unexpected needs. The area of Post 16
SEND is still very new as the Children and Families Act was only implemented in
September and we now have responsibilities up to the age of 25 where the education need
remains. It will inevitably be some time before predictions match need in this area. Interauthority recoupment is low because of changes in placement practice, increased numbers
and our special schools being full may change this. It is also important to realise that this is
a time of change in funding terms for SEND generally, with the requirement in some
instances to fund provision to 25 and the PRUs just coming to the end of their first full
independent budget year.
It is important to note that while high needs funding is not predicted to increase, the
demand against it is predicted to increase significantly in the medium term. The creation of
a surplus balance will allow Salford to manage this transition and cushion the impact of
future funding shortfalls. Outline plans are described at section 4.3.
3.2
Early years block
The majority of the under spend arises within the two-year old funding and three- and fouryear old funding budgets.
Early years central funding
The Early Years Central Funding budget funds the local authority nurseries and within this
budget we have a small under spend of £174k. This has arisen due to a staffing under
spend and carrying some vacant posts within the LA nurseries. Going forward we are
looking to fill these vacancies in order to accommodate more 2, 3 and 4 year olds, but more
specifically 2 year old places where we are increasing capacity, these being at Barton Moss
LA Nursery and Little Hulton LA Nursery.
2 year old funding
Within this budget the DfE allocated two one-off revenue funds to support Local Authorities
in capacity building for the extra 40% of 2 year old places required to support the changes
in the eligibility criteria.
So far we have created an additional 541 2 year old places using this funding. However we
still need to build capacity in order to support the 30% of eligible families who have yet to
access the funding in some of our most deprived areas of the city. The take up of settings in
creating places has taken place over a gradual period which has supported sustainability
within the sector and has enabled us to analyse take up across the city and identify areas
where we need to continue to grow places and raise the quality of provision to
accommodate 2 year olds.
We estimate that we have also been overfunded on placements by 350 places which
equates to £645k. With the move to participation funding in April 2015 means that the
funding from now on will be based on census data rather than DfE estimates.
3 and 4 year old funding
We have had additional funding from the DfE of £568k allocated as result of January’s
census data. This means that we are continuing to be allocated additional funding for any in
year increase in 3 and 4 year old pupils, meaning we no longer need to be carrying large
amounts of contingency to allow for this increase.
One of the ways to maximise this under spend will be to review the Early Years Single
Funding Formula which we feel will be necessary not only due to this under spend but also
in light of the Conservative Government’s announcement to increase provision for 3 and 4
year olds to 30 hours for working parents. We would also look to seek permission to move
the salary of the School Readiness Advisor from the 2 Year Old Funding budget to the 3
and 4 Year Old Funding budget. This will ensure we can maintain this position within the
SLW Service now that the 2 Year Old Funding has moved to participation funding. This role
is a vital element in ensuring we have quality provision in our early years settings.
Outline plans for the use of the balance are described at section 4.4.
3.3
Schools block
There are no significant variances against the budget within this block.
4
Carry forward of balances
4. 1
An accumulated surplus DSG balance of £1.7m was brought forward into 2014/15 from
previous years. Adding to that the forecast under spend for 2014/15 of £4.9m outlined in
section 2 above gives an accumulated surplus DSG balance of £6.6m at 31 March
2015. Table 2 below analyses this surplus across the three DSG blocks.
Table 2. DSG surplus balance
Block
High needs
Early years
Schools
Schools (de-delegated)
Total
Balance
b/fwd 1 April
14
£000
1,314
289
44
61
1,708
Table 1.
NDSB
variance
Balance c/fwd
2014/15
31 March 15
£000
£000
2,919
4,233
2,591
2,880
-65
-21
60
121
5,505
7,213
In this table, a positive balance denotes a surplus, a negative balance a deficit.
4. 2
DSG balances are treated in accordance with the School and Early Years Finance
Regulations. DfE guidance to the council on the allocation of surplus carry forwards under
the Regulations is as follows.




4. 3
Central services – schools forum agrees the budget on each service (and therefore any
allocation of associated under spend), but they do not have the power to exceed the
previous year budget.
Central schools expenditure and central early years expenditure- schools forum agrees
the budget on each service (and therefore any allocation of associated under spend).
High needs – council decision
De- delegation from maintained schools – The council is allowed to carry forward
under-spends on de-delegated areas to be used for the same purpose in future years
High needs block
A large proportion of the accumulated under spend relates to the high needs block and it is
the decision of the council to determine its treatment.
Having an under spend in the high needs block has allowed us to respond to the needs of
individual schools where in year changes to the SEND cohort have significantly affected
their ability to meet need from normally available resources.
The under spend also finances the SEN provision map process. In the last two years 63%
of schools who submitted requests for additional support using the process received
support. The total funds allocated through this route were £164,048. All schools submitting
requests have their requests considered and received feedback if they were unsuccessful.
The under spend also means that we have the capacity to support the creation of additional
Special School Places (New Park) and Enhanced Resource School places (Moorfield,
Riverview) to meet needs where demand is indicated. This reserve is required as DSG itself
only provides 50% of the funding i.e. £5k of the £10k needed for each of the places created.
It is also important to ensure that the school support needs are being met and additional
funding of £380k has been allocated to this area. This funding is of a recurring nature.
A decision was taken not to try to use the formula to reallocate this money as this would not
direct the funds at the places of greatest need in the city and a more creative and flexible
approach would build capacity more effectively.
The proposals are outlined in more detail at Appendix A.
4. 4
Early years block
A proportion of the accumulated under spend relates to the early years block and it is the
decision of Schools Forum to determine its treatment.
A number of detailed proposals are outlined at Appendix B. In addition, a further review of
the Early Years Single Funding Formula will be undertaken once we have further
information from the DfE on the increase to 30 hours for some 3 and 4 year olds. Any
expenditure proposals arising from this review will be brought to Schools Forum.
4. 5
Schools block
There is a small deficit on the central services element of the schools block, arising from
additional expenditure in the growth fund. It is proposed that Schools Forum carry this
forward and meet it from the additional contribution made to the fund in 2015/16 DSG
allocation.
The council will carry forward the small surplus on de-delegated budgets to 2015/16 for
general contingency use.
5
Conclusions
5.1
DSG NDSB is under spent by £4.9m in 2014/15. The accumulated under spend/surplus at
31 March 15 is £6.6m.
5.2
The majority of the under spend relates to the high needs and early years blocks.
5.3
The treatment of balances is to be in line with the requirements of the School and Early
Years Finance Regulations which give authority to either the council or Schools Forum over
the different elements.
6
Recommendations
6.1
It is recommended that Schools Forum:




notes the DSG outturn position for 2014/15
notes the council’s intentions regarding fund surpluses within the high needs block and
de-delegated elements of the schools block
determines that the small over spend in the central services (growth fund) element of
the schools block be met by the growth fund in 2015/16
agrees to the proposals made in section 4.4 for the use of surplus funds in the early
years block.
Charlotte Ramsden
Strategic director of children’s
services
Neil Thornton
Director of finance and corporate
business
Appendix A
SEN costs to cover annual expected underspends 2015-16
Band
New Park
Oakwood
Silver Street
Moorside
All Hallows
Walkden
River View
Lark Hill
Support for Schools
PRUs
Salford Online
ASD Strategy
Behaviour
4
1
6
3 yrs
1 yr
3 yrs
Places to
fund
16
23
12
Place funding
£
Top Up
£
160,000
230,000
120,000
86,080
4,600
138,000
2015-16
£
2016-17
£
2017-18
£
2018-19
£
246,080
234,600
150,500
246,080
234,600
258,000
246,080
234,600
258,000
246,080
234,600
258,000
278,122
79,158
164,609
260,365
71,011
200,521
333,025
156,933
218,750
363,300
176,000
218,750
65,000
60,000
130,000
120,000
195,000
180,000
260,000
240,000
500,000
200,000
300,000
130,000
300,000
500,000
200,000
300,000
130,000
300,000
500,000
200,000
300,000
130,000
300,000
500,000
200,000
300,000
130,000
300,000
2,708,069
2,950,577
3,252,388
3,426,730
Appendix B
Proposals for use of early years under spend
Proposal
Amount
£000
Early years block
Staffing vacancies and new staffing to accommodate additional places
for 2, 3 and 4 year old funding
2 Year Old Funding discretionary to support children with SEN who are
not eligible under the SEN criteria. Approx 10 places
To fund existing 2 Year Old places since the January census due to the
creation of new places in Early Years settings and to fund LAC and
SEND children when they become 2 years old.
Outreach work for Children’s Centre Workers – targeting and
supporting families with eligible 2 year olds to access the funding.
To develop capacity creation in Little Hulton and Higher Broughton and
to continue to ensure quality provision in Early Years settings to ensure
sufficiency for 2 year old places.
This will include training for Early Years settings and revenue costs to
Early Years settings to increase places
School Readiness Advisor post within SLW Service
Contribution towards the SLW staff previously funded from 2 Year Old
funding (previously agreed by Schools Forum September 2014)
Continue to support the SEN Bursary budget (previously agreed by
Schools Forum September 2014)
To continue to embed the Early Years new delivery model across the
city, including the delivery of universal and targeted parenting
interventions and speech and language interventions for children 0-5
174
30
400
240
359
54
258
50
850