Please find below a Briefing Note which was presented to the Schools forum 27/1/05, relating to the calculation of grant for UPS3 in line with DfES requirements. The grant will be distributed to schools for the Autumn and Spring terms in the February Budget Share changes. Personnel guidance relating to the administration of progression to UPS3 can be found in MI203/04 Upper Pay Spine Progression - UPS3.

Briefing Note

1 - UPS3 FUNDING 2004/05

• In order to distribute grant for UPS3 the LEA need to apply the DfES mandatory formula. The formula is based on two factors; firstly using information received from each school regarding their number of eligible teachers. In order to establish this, forms were issued to schools in the Autumn term requesting them to indicate staff who went to UPS2 in September 2002, therefore making them eligible for assessment for UPS3. Secondly, the estimated savings at individual schools on management allowances arising from these not being inflated. This information has principally been derived from central personnel records.
• These forms have now been collated following delays due to late and incomplete forms; we are now in the process of applying the mandatory formula. As this is a finite grant, schools that did not complete the form or subsequently find they have omitted staff from their forms, will not receive grant.
• Norfolk LEA received grant from the DfES of £733,035.
• The LEA has been notified of 1670.50 fte in 293 schools.
• The DfES Mandatory Funding Formula:

• The grant will be distributed to schools in the February Budget Share changes.
• Bob Hedley issued a MI sheet MI203/04 on 6/11/04 outlining the personnel procedures for pay progression to UPS3. This can be accessed via Esinet.

N.B. UPS2 funding for the Autumn and Spring terms 2004/05 will also be notified in the February Budget Share update.

2 - UPS 3 Funding 2004/05

Principles Agreed

The DfES agreed the methodology for the distribution of the grant following discussions with the pay partners. It was agreed that the funding of UPS3 progression could only be managed through a combination of extra DfES grant, savings made from freezing the values of management allowances, and some reform and restructuring of allowances.

The pay partners agreed:

• that LEAs should distribute the funds to their schools
• that LEAs must have a clear picture of the distribution of both post-threshold teachers (in this context those eligible for progression to UPS3) and Management Allowances in their schools; and
• there will be a mandatory formula for allocating the funds to schools.

The DfES made available £48m grant for progression to UPS3 in 2004/05. The distribution of grant took into account (a) the distribution of eligible teachers around the school system; and (b) the variations in management allowances savings between regions and schools.

The partners concluded that DfES determined the allocation of (a) based on currently held FTE data of teacher numbers and applying appropriate regional wastage rates and movement between regions. This would provide each LEA's share of the proportion of eligible FTE teachers.

A survey was subsequently undertaken in order to establish the level of management allowances in LEAs and therefore determine the share of the £48m grant that each LEA will receive.

It is important that schools and LEAs are aware that it is intended that the £22.5 million savings from the freezing of management allowances, and the £5 million from the restructuring of management allowances are to contribute towards the costs of UPS3 progression.

In August 2004 this grant was released to LEAs, together with instructions on administering the grant, which included the agreed mandatory formula for allocating the funds to schools.

Calculation of the amounts of Performance Pay Progression (UPS3) grant to schools.

1. Each authority shall calculate the grant to schools using the following method:
   1. The LEA and individual school MA savings (notional funding) will be established by the survey.
   2. The LEA notional funding will be added to the LEAs share of the £48m grant (grant funding) to establish the LEA total funding.
   3. The LEA eligible UPS3 FTE will be established along with the percentage proportion of the eligible FTE for each school.
   4. Using the eligible FTE data, the percentage share of the LEA total funding for each school will be established.
   5. For each school, the notional funding for the school will be deducted from its share of the total funding in order to establish the grant funding for the school (the school share of the £48m grant).
2. Each authority shall calculate the grant to schools using the following formula:

   RS =	(RL + NL) * AS	- NS
   	AL

   Where:

   R_S = the amount of grant for an individual school
   R_L = the LEAs share of the £48 million DfES Grant
   A_S = the FTE number of eligible teachers in the school
   A_L = the FTE number of eligible teachers in the LEA
   N_S = the estimated Management Allowance savings in the school
   N_L = the estimated Management Allowance savings in the LEA
   = multiplied by

   NS = ( MS1*V1 + MS2*V2 + MS3*V3 + MS4*V4 + MS5*V5 ) * OC * 2.5% NL = ( ML1*V1 + ML2*V2 + ML3*V3 + ML4*V4 + ML5*V5 ) * OC * 2.5% where,

   MSi = the FTE number of teachers with Management Allowance-i in the school

   (i = 1 to 5 MLi = the FTE number of teachers with Management Allowance-i in the LEA (i = 1 to 5) Vi = the April 2003 cash value of Management Allowance - i , (i = 1 to 5) OC = National On-Costs rate of 1.22 = multiplied by