Agenda item

David Gearing, Financial Delegation Manager.

Details of the 2020-21 Dedicated Schools Grant (DSG) settlement for Kirklees and how it compares to the previous year’s settlement were included with today’s agenda papers.

a)    Schools Block

The pure Schools Block has increased from £293.5m in 2019-20 to £302.18m for 2020-21, a rise of £8.68m. The minor part of the increase is attributable to having 115 more pupils on the October 2019 pupil census return but the majority of the rise is driven by the average 4% increase to the National Funding Formula (NFF) factor values for 2020-21, including the higher minimum per pupil check values of £3,750 for primary schools and £5,000 for secondary schools. The overall rise in the Schools Block for 2020-21 is worth 2.96%. Whilst all schools will see the benefit of the formula factor unit value increases, many schools will experience a consequential reduction in the amount of cash protection layered on top of their NFF outcome. The worst case net effect of the two opposing movements would see a school gaining by a minimum increase of 1.84% per pupil on last year’s baseline (but it has subsequently proved possible to deliver a minimum increase of 2.18% per pupils – see 3.1 above). 

b)   Growth provision within the Schools Block

The formula growth method brought in last year allocated £1.76m to Kirklees in 2019-20. The tail-off in growth pressure has seen this drop to £1.59m in 2020-21 although the fall would have been larger still if the DfE hadn’t removed the gains cap which applied last year. [£165k was knocked off Kirklees’ growth formula outcome in 2019-20 to produce the £1.76m result]. Any growth funds not needed to address within the funding allocations the addition of new year group intakes for those schools still adding a year group from the start of each academic year will be added to the Pupil Growth Fund for 2020-21 (see item 7 below).

c)    Central Schools Services Block

Kirklees’ CSSB allocation has again seen a reduction from the previous year’s level - £2.22m compared to £2.30m in 2019-20. A 2.5% reduction in the value allocated per pupil had been expected as the true NFF outcome is phased in, but on top of this a 20% cut (a further £34k loss) has been applied to the historic commitments element of the CSSB. This sort of cut has been threatened by the ESFA for some while based upon an assumption that historic commitments should be reasonably short-term and will “unwind” over time. That simply isn’t true when the costs relate to annual pension payments. The ESFA have begun to listen to arguments from local authorities where their commitments are in reality much longer term in nature. Officers wrote to the ESFA, as requested, to explain the situation with regard to the ongoing pension payments charged to the DSG and the £34k funding will now be restored. 

d)   High Needs Block

More funding nationally has been committed to High Needs from 2020-21. This has seen Kirklees’ High Needs allocation for 2020-21 rise from £37.06m in 2019-20 to £43.17m – an increase of £6.11m. There are indications also that Kirklees’ eventual outcome from the High Needs NFF will garner another £5.8m on top of the 2020-21 position (although the Treasury has still to confirm departmental allocations beyond 2020-21 and there is no indication of how quickly the funding would be passed through should it be approved). The increase in funds for 2020-21 is very welcome but still nowhere near sufficient to bring the High Needs account to a balanced position in-year.

e)    Early Years Block

The Early Years Block figure is only an indicative one at this stage of the year. It will be firmed up once January 2020 census data is available. The indicative allocation shows a mixture of gains and losses across the various funding elements in comparison to 2019-20. Numbers of children accessing the universal 15 hours free entitlement for three and four year olds have fallen compared to a year ago (resulting in a loss of £68k) and numbers of disadvantaged two year olds in the system have also fallen (a loss of £115k). The number of children from eligible working families accessing the extended 15 hours entitlement has increased by approaching 10% since last year, resulting in an increase in funding of £674k. There have also been increases to both the Early Years Pupil Premium (+£51k) and the Disability Access Fund (+£10k) allocations. Overall, there is an indicative increase from £28.09m to £28.64m.

The shape of (mainstream) school funding for 2020-21

An analysis comparing the 2020-21 schools funding allocation factor by factor with the equivalent figures for the previous year was circulated to the meeting. The 4% average boost to the National Funding Formula factor values has reduced the amount of cash protection for schools within the system. In 2019-20 cash protection totalled around £14.5m above the pure operation of the national funding formula. Within the 2020-21 funding allocation this has reduced to approximately £10.6m.