FINANCING OF EXPENDITURE
SUMMARY 2014/15
Revenue Expenditure
Revenue Expenditure is the amount needed to fund and run Council services,
such as Social Care, during a financial year. i.e “day to day operating costs and
income”
Torbay Council Budget - 2014/15
£m
£116
Financed By:
Revenue Support & Other Grants
Business Rates Retention Scheme
Previous Years Council Tax Deficit
Council Tax
£36
£28
(£1)
£53
31%
24%
(1)%
46%
Explanations:
Torbay Council Budget
This is the total amount the Council expects to spend on running its services
during 2014/15. This requirement is after any income from fees, charges and
specific government grants for services (net). The value of this income is around
£151 million per year. Within this figure is the “dedicated” schools grant from
Central Government. For 2013/14 the estimated grant is £44 million.
Financed By
Revenue Support and Other Grants: The grant is based on the level of spend
that the government considers appropriate for Torbay. This level of spend based
on “need” has now been set at a baseline for future funding. This fixed baseline
is then subject to percentage reductions by central government as part of the
“austerity” measures with no changes linked to need. The Council also receives
other general grants such as an Education Support grant.
Business Rates Retention Scheme: This is the Council’s 49% share of all the
business rates collected by the Council, with the balance going to central
government and the Fire authority. As the Council’s funding “need” is greater
than the value of its 49% “baseline” share of business rates, it also receives a top
up grant from central government.
Council Tax: The balance of funding required by the Council is met from local
taxation by means of the Council Tax. This balance required from taxpayers,
adjusted for any surplus in tax collection from the previous year, is billed to
residents based on the value of their property. If the Council sets a budget that is
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equal to a zero increase in Council tax it can get a “Council Tax Freeze” grant
equal to a 1% rise.
.
Capital Expenditure
Capital Expenditure is the amount spent on, in the main, the purchase,
development or enhancement of assets such as buildings, land, roads, vehicles
and large items of equipment.
Due to the nature of capital projects the Council plans several years ahead and
has a Capital Investment Plan which spans 4 years - 2014/15 to 2017/18. Over
the period 2014/15 to 2017/18 the Council plans to spend over £41 million on
capital projects. The funding of this Capital Programme will primarily be a
combination of grants, sale of assets (receipts) and external borrowing.
Capital Budget for 2014/15 (as at Q3 13/14)
£m
£26
Financed By:
Council Borrowing (loans)
Government & Other Grants
Capital Receipts
Revenue & Reserves
£13
£11
£1
£1
50%
42%
4%
4%
Explanations:
Capital expenditure on assets is partly funded from Council borrowing. To meet
the costs of borrowing the Council has to fund the cost of debt repayments
(called a minimum revenue provision) and interest from its own revenue
resources.
A number of capital projects are supported by specific grants from central
government or other grant bodies such as the Lottery or Local Enterprise
Partnership..
Councils also fund some of their capital expenditure by the disposal of other
assets or from seeking contributions from the private sector or other partners.
Capital projects, due to their nature, may incur expenditure in more than one
financial year. The funding for these projects is moved between years to match
the pattern of expenditure.
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2014/15 Provisional Dedicated Schools Grant Allocation
for Torbay Council
1. The Dedicated Schools Grant (DSG) is allocated to the Local Authority
based upon:a. The number of pupils in its maintained schools (Primary, Secondary,
Special Schools & Academies);
b. The number of 3 and 4 year olds attending either a maintained nursery class
or a setting operated by the private, voluntary or independent sector plus an
estimate of the number of 2 years eligible for free nursery provision;
c. The number of pupils who are receiving education from the Local Authority
in settings outside the mainstream provision.
The Dept for Education announced the 2014/15 DSG funding on 19th December 2013.
The distribution to Local Authorities is based upon pupil numbers.
There are 3 main spending blocks; schools, early years and high needs block.
There is also an adjustment block where minor funding changes are accounted
for. The underlying schools block element has again been kept cash flat per pupil
for 2014/15.
Number
of
Pupils
15,957
2013/14
(final)
2014/15
16,204
(provisional)
Change
+247
pupils
Schools Unit of
Block
funding
DSG
£68.7m £4,305.25
High
Needs
Block
£13.3m
Early
Years
Block
£3.5m
£69.8m
£4,305.25 £13.7m £3.5m
+£1.1m
No
change
Other
Total
Adjustments DSG
£1.4m
86.9m
£1.9m
£88.9m
+£340k No
change
Of the £2m cash increase, £0.5m relates to the increase in funding for 2 year
olds leaving £1.4m which relates to increases in pupil numbers and high needs
placements. The 2014/15 figures are all provisional until the DfE finalise the
pupil numbers and placements in July 2014.
2.
Coverage and conditions of grant
The DSG can only be used for the purposes of the Schools Budget as defined in the
School and Early Years Finance Regulations. The Schools Budget consists of delegated
budgets allocated to individual schools, Pupil Referral Units (PRUs) and Early Years
Provision in Private, Voluntary and Independent (PVIs) providers, and a budget for other
provision for pupils which local authorities fund centrally, which now includes the bulk of
high needs provision, including post-school provision up to age 25.
3.
The DSG will be paid as a ring-fenced grant and will be subject to formal grant
conditions. The conditions include a requirement to use the grant in support of
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the Schools Budget and a provision for the Secretary of State to recover grant.
A number of new conditions have been added relating to the funding reforms in
2013-14. Any underspend on DSG cannot be used to fund overspends
elsewhere in Council Services.
4.
Minimum Funding Guarantee (MFG)
Although the overall schools budget will stay at the same level on a per pupil basis
before the addition of the Pupil Premium, the actual level of each school’s individual
budget will vary. To protect schools from significant budget reductions, the MFG will
continue at minus1.5% per pupil (excludes sixth form funding). The School and Early
Years Finance Regulations set out the formula factors which are automatically excluded
from the calculation.
5.
Schools Block £69.8 million
The per pupil amount for the Schools Block is the same as 2013/14. This amount is then
multiplied by the pupil numbers from the October 2013 school census.
The per pupil unit of Funding
Schools Block per pupil funding for 14/15 is £4,305.25
8.
Early Years Block £3.5 million
Early years per pupil funding £3,292.29 x 1,055 = £3.5 million
The pupil numbers are taken from the January 2013 Early Years Census. This will be
updated during 2014-15 for January 2014 and 7/12ths of the January 2015 pupil
numbers (to cover the September 2014 to March 2015 period).
Other Adjustments includes 2 year old funding of £1.9 million
9.
High Needs Block £13.7 million
This includes £0.8m for post 16 high needs
The High Needs Block is a single block for local authorities high needs pupils/students
aged 0-24. For 2014-15, the Block has been calculated in two parts, pre-16 and 16-24
(those aged 19-24 are the responsibility, for funding, of the home local authority where
the student has a Learning Difficulty Assessment, or an Education and Healthcare Plan).
a. Pre-16 High Needs Provision
The pre-16 calculation reflects the cross-border changes made in order to end interauthority recoupment. It also includes the funding identified as hospital education. There
is the ability for Councils to apply for growth in High Needs places in 2014-15. Torbay
has applied and as of Feb has not had confirmation of funding..
b.
16-24 High Needs Provision
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From 2013-14, funding for 16-24 high needs students has been through the DSG. To
enable this, three post-16 budgets have been combined: the SEN Block Grant,
Specialist placements funding and the cost of high needs student in Further Education.
From this budget the EFA will pay all place led funding, with the remaining funding
transferred into the DSG. The new system for funding high needs pupils was not
introduced for post 16 students until mid way through the 13/14 financial year; August
2013.
10.
Pupil Premium
For 2014/15, the allocation takes into account the number of pupils in a school
from the 2014 January pupil census who have ever been eligible for free school
meals in the last 6 years, this is known as “Ever 6”.
However the Jan 14 “Ever 6” numbers are not finalised until the Autumn Term by
the EFA so your allocation for PP is currently based on Jan 13 numbers and will
therefore be subject to an adjustment later in the financial year.
The amounts for 14/15 are as follows:£1,300 per primary pupil who is/ever was eligible for free school meals in
the last 6 years.
£935 per secondary pupil who is/ever was eligible for free school meals in
the last 6 years.
£1,900 per pupil for those children who have been looked after for one day
or more.
In 14/15 this has also been expanded to include children who have been
adopted from care or left care under a special guardianship or residence
order. Eligible adopted pupils will need to have been registered on the
school census to attract the £1,900.
£300 per pupil for those from Service (armed forces) families.
For pupils who are looked after, the allocation to the school including academies
will be made by the Local Authority no earlier than the Autumn Term when the
looked after children figure has been confirmed by the DfE.
The Pupil Premium level of funding for 2014-15 for pupils who have ever claimed free
schools meals in the last 6 years or who are looked after is £900 per pupil. The service
children Premium for 2013-14 is £300 per pupil. As the Pupil Premium is calculated
using the pupil numbers from the January school census, final allocations will be
confirmed in the summer of 2013.
11.
Academy Funding
Torbay Council receives DSG for all pupils in Torbay Schools including
Academies. From this total allocation, the Education Funding Agency recoups
that funding which relates to Academies. For 2014/15 this is estimated to be in
the region of £44m.
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