Budget Share 2005/06 and Transitional Support Arrangements

1. Budget Share 2005/06

   It is my intention to publish the budget share for 2005/06 by 4 February, 2005, subject to the PLASC returns being returned by ALL schools by 26 January, 2005. This arrangement provides budget share figures three weeks earlier than in previous financial years. The budget share will however by subject to County Council approval of the Education Budget.

   The information will be published on the website at http://ictsolutions.gov.uk/BudgetShare/menu.asp A hard copy of all the budget information will follow after the County Council meeting on 21 February, 2005.

   I am writing to you in order that you may begin the planning process if you propose to apply for transitional support grant for schools in financial difficulty in 2005/06.

2. Transitional Support 2005/06

   The government has indicated that Norfolk will be allocated £2.66m of Transitional Support Grant in 2005/06, subject to the approval of a further Transitional Support Plan, which has to be submitted by 31 January, 2005.

   Given the level of allocations already made, the amount of grant available to be allocated in 2005/06 to those schools determined to be in financial difficulty, is £1.413m.

   The Schools Forum has endorsed the 2005/06 Plan. This letter reflects the requirements of the draft 2005/06 Plan.

   A transitional support grant timetable for 2005/06 is available that sets out the key dates for the grant allocation process.

3. Eligible Schools 2005/06

   Norfolk LEA will identify schools in financial difficulty through the following factors:

   1. those schools with projected deficits at 31 March, 2006
   2. those schools not receiving transitional support grant in 2004/2005, except in cases where the failure of the PFI project and the consequential delay on school reorganisation resulted in the original application being based on incorrect facts.

   However, schools will be required to fund the first part of any deficit. The amount a school will be required to fund will normally be equivalent to 2% of its budget share (including any LSC allocation).

4. The process of submitting a claim for grant

   Schools wishing to access transitional support grant must submit an indicative budget plan to the LEA by 18 February, 2005.

   The budget share will be available electronically on 4 February when the new budget planner spreadsheet for 2005/2006 will also be available via AVCO.

   The planning process should commence immediately using the 2004/2005 budget planner spreadsheet to update your 2004/2005 budget and project current staffing and other costs for 2005/2006 and 2006/2007 at current prices.

   The school should import the data already prepared for 2005/2006 and 2006/2007 on the current spreadsheet into the new 2005/2006 budget planner. These forecasted figures, once imported onto the new budget planner, should be recalculated at 2005/2006 outturn prices.

   The school should produce a three year budget for the years 2005/2006, 2006/2007 and 2007/2008. The budget should show the school expenditure matching income in 2006/2007. Schools experiencing difficulty in achieving a balance between expenditure and income in 2006/2007 which fall into one of the eligible school categories identified in paragraph 3 above may be eligible to transitional support grant.

   For those schools that have recently revised their current budgets, a limited amount of work should be necessary to update the figures using the budget share provided on 4 February.

5. Action Required - Schools Wishing to Access Transitional Support

   The first step in the process of a school accessing transitional support is for the LEA to determine whether a school is eligible for such support. For the LEA to assess an individual school's eligibility for transitional support I will require the following by 18 February, 2005.

   1. A revised budget plan, details of which are set out in section 4 above.
   2. An identification of the school's true year-end balance position. The analysis of Planned Balance on the summary budget plan must be completed to demonstrate the year-end balances for 31 March, 2005, 31 March, 2006, 31 March, 2007 and 31 March, 2008 and to distinguish between money held for cluster activities; Standards Fund money carried over from one period to the next; any funds held at year end which are not at the schools disposal, eg school journey money held in your LM account; money held for one-off purposes, eg building projects.
   3. An identification of any one off spending in 2005/2006 funded from 31 March, 2005 balances.

   NB. Also available is a staff planning tool. The tool helps a school identify against benchmark data areas of high staffing costs and the underlying reasons for those high costs. Both secondary and primary school versions are available on the EFS website, entitled Staff Planning.

6. Next Steps/Support

   As stated above I require information by 18 February to determine whether a school is eligible for transitional support. Once this part of the process is complete schools will be notified by the end of February of their possible eligibility. Subject to DfES approval to the proposed arrangements, I will at this time also provide details of the process and conditions attached to accessing the transitional support.

   If you have any queries please contact your Finance Support Officer.