Agenda item

• Closedown summary
• ‘Reorganisation’ pressures
• Roll-over decisions

David Gearing

• Closedown summary

The 2018-19 DSG outturn summary position was considered. On the bottom line of the 2018-19 account is overspend of £8,435,700. In terms of the component funding blocks of the DSG this breaks down as follows: -

High Needs funding block                                      £8,057,100    over

Early Years funding block                                      £   566,000    under

Schools funding block                                             £   944,600    over

Total                                                                          £8,435,700

The High Needs funding block continues to experience increasing pressure due to rising numbers of children having education, health and care plans and the rising complexity of identified needs. Although the Council’s own budget position also continues to be extremely challenging, there is some acceptance that no real purpose would be served by rolling forward the High Needs deficit into financial year 2019-20 to increase the scale of the problem next year. The Council’s general fund is in a position, as last year, to be able to absorb the 2018-19 high needs overspend and not roll it forward into next financial year. It is very unlikely that the Council will be in a position to do something similar at the end of FY 2019-20. It is imperative that every effort is made to turn the situation round via a combination of increased grant funding and a sustained effort to ensure that high needs children are placed in provision appropriate to their level of need. This will entail the creation of more local specialist places which will take time to make available. The Forum wished to record its thanks to the Council for the action it has taken once again to ‘vent’ the building high needs pressure.

Given that the 2018-19 High Needs pressure has already been dealt with, the focus of the discussions today needs to be on the schools block deficit and whether any of the Early Years underspend is available to help.

• ‘Reorganisation’ pressures

There will be a number of “reorganisation” pressures to address within financial year 2019-20. It is helpful that Kirklees has benefited from the new method of allocating growth provision within the DSG with the Forum having previously agreed to the retention centrally of the additional sum of £698,500 for 2019-20. The new funding will mitigate the effect of any remaining deficit to be rolled forward within the school reorganisation account.

The main demands upon the 2019-20 reorganisation account are expected to fall under the headings of diseconomies support (for new schools still growing by one year group a year – Beaumont, Brambles and Luck Lane); demand pressures for additional school places – a number of secondary providers have agreed to admit beyond their normal planned admission number this coming Autumn and there will be a need to help them with the cost implications of new class arrangements; and the first effects of the Almondbury area reorganisation and transitional arrangements could begin to impact in 2019-20 (still subject to relevant Council decision-making processes).It would be prudent for any ‘spare’ 2018-19 DSG funds to be directed towards the reorganisation account if possible.

• The Early Years account

Martin Wilby circulated a briefing paper to further break down the year end underspend within the account. The Forum was reminded that a decision was taken this time last year to roll forward a provision of £248k into the 2018-19 Early Years account. Most of that amount has been committed during last year with the exception of a £60k contingency linked to the potential cost of deprivation supplements for the extended 15 hours uptake. It is now clear that this wasn’t needed and the £60k can now be freed up to other purposes.

There is a need to roll some of the surplus forward to provide some cushion, £56k, against potential bad news during 2019-20, including potential claw back of funding for lower numbers of children, a bad debt provision for when providers go under and continued risks of increased deprivation support pay-outs for children/families accessing the 30 hours of free childcare.

The paper referred to a remaining element of unallocated underspend amounting to £450k. The source of this money is difficult to tie down but it is clear that there is often a mismatch between census point adjustments and the actual payments the Council has to make. What is also clear is that this funding is linked to the Early Years NFF rather than any element of historic funding brought forward. As such, there is a strong argument for retaining these funds to spend back on early years’ provision. Against a context of static hourly funding rates for several years and a reduction in the rate from April 2018 the paper proposed to allocate the £450k across all early years’ providers to give a 6p temporary increase in the hourly rate for the period September 2019 to August 2020.

There has been no opportunity to consult with the Early Years Reference Group about what is proposed so the recommendation to Forum was that they agree the proposal and task the EYRG with recommending the best method of distributing the funds to all providers.

• Roll-over decisions

The following rollover decisions were agreed…

Schools Block (£944,600 deficit)

1)    For some time now on the DSG balance sheet provisions have been made to insure against the possibility that the DfE would claw back funding on a number of fronts (Early Years, Pupil Premium, recoupment in respect of academy conversions etc). Because of sufficient passing of time it is now safe to assume that claw back for these particular items will not now happen. A total of £646,700 can therefore be moved and used to offset the starting deficit, leaving a sum of £297,900 to be dealt with.

2)    The remaining £297,900 is made up of overspends within the staff absence insurance account (£124,700) and the school reorganisation account (£288,900) with an uncommitted balance of £115,700 left in the schools contingency. It was agreed to roll these amounts forward into 2019-20. The absence insurance overspend will remain within that account to be made good during the year. The contingency balance will be used to reduce the amount rolled forward to the 2019-20 school reorganisation to a debit of £173,200. [This figure will be further offset by action from the Early Years Block – see below].

Early Years Block (£566,000 surplus)

3)    £60,000 of the surplus is to be rolled forward into the 2019-20 school reorganisation account to reduce the overall sum to be redeemed within that account

4)    £56,000 rolled forward into the 2019-20 Early Years account to provide a contingency against various risks – claw back for lower numbers, potential bad debts and additional disadvantage claims.

5)    The remaining £450,000 is also to be rolled forward within the Early Years budget to give providers a temporary boost to the hourly rate of funding for the duration of the new academic year. (The detail of this will be agreed with the Early Years Reference Group).