Management Information Sheet

The National Funding Formula for schools has been delayed until April 2018, financial year 2018/19. Stage 2 of the Department of Education consultation process with all Schools and Local Authorities will be announced this Autumn (2016).

There are two significant national changes for the financial year 2017/18. The removal of the post 16 funding factor and the use of new bandings for the index of deprivation affecting children (IDACI).

Due to continued pressure within the High Needs Block and, in part, due to the changes proposed as part of the National Funding Formula, it is necessary to outline budget proposals to all Norfolk state funded schools. These proposed changes include a transfer of funding between the Schools Block and the High Needs Block and do impact on all school budgets.

Last year there was an overspend of, approximately, £4.5 million that was offset using reserves. This year (FY 2016/17) the forecast is for an overspend of around £6.0 million and next year (FY 2017/18) in excess of £8.0 million.

There has been a 10% shift of pupils (Statements / Education Health & Care Plans) from mainstream schools to the specialist sector over the past 5 years and, in Norfolk, a higher percentage of those in high cost independent / non-maintained rather than state funded special schools. The reserves, used previously, have been exhausted and we must now consider a combination of actions to reset the budget in a sustainable way. We propose to:

• transfer funding from the Schools Block to the High Needs Block
• reduce the SEND Cluster budget
• reduce funding for the recommissioning of Specialist Resource Bases and ongoing commissioning of LA and 3rd party services (described as 'LA Hosted and Commissioned Services')
• create an 'Inclusion Incentive Fund'
• review the banding / matrix scheme within complex needs schools
• allocate the anticipated inflationary growth from DfE, for next year, towards revenue funding for our planned new specialist provision (250 places)

We must make it clear that there are risks associated with the proposal, however, we believe that in the current context such actions are required and the combination of actions provide the best possible way to mitigate the associated risks.

Every school will have a budget reduction and this will present challenges to schools; needing to re-assess their approach to inclusion, ensuring that a range of approaches are used to meet pupil needs and reconsidering how a range of resources can be deployed.

If schools cannot include all children appropriately then this would cause further pressure within the High Needs Block if even more pupils move out of mainstream schools.

With the introduction of a National Funding Formula, from April 2018, this means that the need to resolve this issue is more pressing than usual; this is the last opportunity to determine locally the balance of funding between the Schools Block and the High Needs Block, to reflect current pupil need and to anticipate pupil need in the future.

We know that other local authority areas are also dealing with similar issues and considering a range of solutions. We know that Suffolk have recently proposed a £3million transfer between their Schools Block and High Needs Block and in Cumbria and Surrey, whilst having not published figures at this stage, the local authorities have signalled a transfer along these lines also, as they experience the same pressures that we face:

• increase in complex needs within the pupil population
• rise in exclusions and/or the use of pupil referral units via managed move arrangements
• increases in post 16 funding linked to the change in age range for Education Health & Care Plans (age range 0-25)

This consultation, therefore, seeks views from school regarding the impact of the proposal and views on the likelihood of this meeting the needs of pupils within mainstream and special schools now and in the medium/long term.

Chris Snudden
Assistant Director Education Services

The Local Authority is consulting with Schools via an online survey, due to the tight timescales involved. To view the proposals and technical papers, please visit the Fair Funding page on the Norfolk Schools website. Or to open the survey click here: www.smartsurvey.co.uk/s/FairFunding2016Survey

The survey will be available from 4 to 25 November 2016.