2017-18 Dedicated Schools Grant Outturn:
• Closedown Summary
• Contingency / Reorganisation pressures
• The Early Years account
• Other issues – absence insurance, maternity, trade union facilities time
• Roll-over decisions
David Gearing / Martin Wilby (Early Years)
Minutes:
The 2017-18 DSG outturn summary position was considered.
On the bottom-line of the 2017-18 DSG account is an overspend of £3,994,600. In terms of the component funding blocks of the DSG this break down as follows: -
High Needs funding block £4,656,500 over
Early Years funding block - (£ 741,500) under
Schools funding block £ 79,600 over
Total £3,994,600
The main pressure within the DSG is clearly falling on the High Needs block. There has been an increasing amount of focus from the centre of the Council on the growing imbalance within the account. The High Needs Strategic Review work has helped to set out the context for how the pressures have built up and will continue to do so as well as drawing up an action plan with a view to return the system to a balanced position. That aim would not be helped by simply rolling forward £4.66m of deficit into the 2018-19 High Needs account. Although the Council’s own financial position continues to be extremely challenging, its own 2017-18 outturn position was ahead of the (considerably reduced) target budget figure. The Council is therefore in a position to step in and deal with the £4.66m deficit at the close of 2017-18. Although High Needs pressures continue to build, the 2018-19 High Needs account will at least open having no inherited debt to address. This outcome has only been possible thanks to some unexpected one-off ‘windfall’ savings during last year. It is unlikely that the Council, with further savings to achieve during 2018-19, will be able to step in and help again in a year’s time. It is imperative that the High Needs strategic action planning maps out the path to a more stable High Needs position over the coming years. The Forum wished to record its thanks to the Council for the action it has taken to deal with the 2017-18 High Needs deficit.
Given that the 2017-18 High Needs deficit has been dealt with, the focus of the meeting today needed to turn to the remaining (net) balance of £661,900 of unspent monies.
Aside from the High Needs account pressures referenced above, it is anticipated that the need to support a number of schools and academies which are undergoing some form of reorganisation will cause further pressure during 2018-19. For some time now a reducing reorganisation reserve (within the Schools Contingency account) has been rolling forward within the DSG to absorb annual overspends against the recurrent School Reorganisation budget of £292,000. The opening 2017-18 balance of this reserve stood at £1.27m but £912,900 of this was committed during that year, leaving a closing balance of just £355,900.
Looking ahead to the reorganisation-related commitments that need to be honoured during 2018-19, it is certain that the recurrent Reorganisation budget of £292,000 will be exceeded. These commitments include the provision of diseconomy support funding to new primary schools growing year group by year group, support for schools asked to increase their Planned Admission level to address excess demand for places in their locality and some further transitional support in respect of lump sum payments affected by reorganisation. Given the cost of these interventions, the Reorganisation account would be officers’ preferred destination for any identified spare resources to be rolled forward.
A briefing note was circulated. This account has contained a reserve element of funding which harks back to an historic allocation of funding called the two year-old trajectory grant, which was all about establishing nursery and childcare places for disadvantaged younger children. In Kirklees the places were created at a cost well within the funding provided in support. The reserve has been reducing over time as funds have been transferred out over the last few years to relieve evident pressures in other parts of the DSG. The underspend in the Early Years account at closedown 2017-18 is -(£741,500) and probably represents the last opportunity to deploy spare monies to help with pressures elsewhere.
The paper proceeded to set out a number of issues for which it would seem prudent to retain a modest proportion of the total sum as contingent provision during 2018-19: -
i) Retain funds for potential clawback for lower numbers coming through £50,000
ii) Contingent provision re deprivation supplements to the 30hrs cohort £60,000
iii) To support a small number of 2 year olds subject to child protection £13,000
iv) Early Years SEND provision for eligible two year olds £125,000
Total carry forward proposed to the 2018-19 Early Years account: £248,000
The remainder of the Early Years balance is therefore available to be used for other purposes. [There is a discrepancy to resolve between the Early Years Service’s view of the 17-18 outturn figure of a £697k underspend and the Finance Service view of £741.5k. This should prove to be a simple enough matter to resolve].
There are a few budgets within the DSG which have overspent in 2017-18 (and also in previous years) which merit further consideration going forward, particularly given the likelihood that there will be little by way of compensating underspends within other DSG budgets from this point on…
Absence insurance
The insurance schemes overspent on the bottom line by £77,900 during 2017-18. It is proposed to roll this amount forward as a debit against the 2018-19 absence insurance account. Then, to avoid creating further pressure within the account, take steps to redeem the sum. This could be achieved by recharging the amount across all schools taking part in the absence insurance arrangements in 2017-18. In the past, when the schemes have been in profit, a dividend-style payment has been paid out to member schools. It would make sense to make a similar adjustment to member schools when the scheme has a deficit to address. Another approach that could be taken is to look to reduce the daily payment rates in 2018-19 by an amount sufficient to save £78k. This would be problematic if the pattern of schools buying the insurance had altered since 2017-18 when the deficit occurred. The meeting favoured the recovery of the debt from 2017-18 member schools.
Maternity, paternity and adoptive leave
The maternity pot was overspent by £545k at the close of 2017-18, a very similar total to that showing at the close of 2016-17. This level of overspend clearly cannot be sustained so something needs to be done to reduce the level of expenditure charged to the account and/or increase the budget to restore a balance on this line. Officers had brought a discussion paper on the subject today but, due to time considerations, the matter was deferred to a future meeting. Any changes could only be made from next April anyway so there is time to look at the issues next term.
Trade Union Facilities Time
The 2017-18 outturn report shows an overspend against the Public/Union Duties heading of £107,800. The Public Duties budget’s share of this is around £6k. There is a clear gap between the cost of operating TU facilities and the amount of funds gathered via de-delegation processes and direct purchase from schools. It is likely that income levels for the account will actually increase for 2018-19 though as more schools and academies are deciding to buy in than in the previous year. An agenda item will be scheduled in the first half of the Autumn term to facilitate further discussion.
The following rollover decisions were agreed…
Schools Block (£79,600 deficit)
1) The £77,900 overspend in the 2017-18 absence insurance arrangements is to be rolled forward into 2018-19 as an initial charge against that year’s arrangements. The £77,900 is to be recovered by levying proportionate charges across schools which were members of the insurance scheme(s) in 2017-18.
2) The remaining small deficit balance of £1,700 will be addressed from monies rolled forward from the Early Years Block (see below).
Early Years Block (£741,500 surplus)
3) Accepting the need to retain some contingent provision within the Early Years account £248,000 is to be rolled forward into the 2018-19 Early Years account.
4) The remainder of the 2017-18 Early Years underspend (£493,500 if the £741,500 total is confirmed) is to be rolled forward and used as follows: -
Clear the residual overspend in the Schools Block (see 2) above) £ 1,700
Schools Contingency – provide a Reorganisation reserve for 2018-19 £491,800
(Within this there may need to be a contribution to the Pupil Growth Fund to the pre-
opening budget provided in 2018-19 to the new Brambles Primary).