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ITEM EX14

EXECUTIVE - 19 MARCH 2002

SCHOOL BUDGETS

Report by Acting Chief Education Officer and Director for Business Support & County Treasurer

1. On 5 February 2002, Council resolved to: "instruct the Executive to examine and consult on ways, within the schools’ devolved budget formula, to find and implement, in the 2002/03 financial year, ways of compensating schools without sixth forms for the financial disadvantage they will suffer under the new Learning and Skills Council’s post 16 funding arrangements".
2. It will not be possible to introduce changes for 2002/03 as budgets were due to be sent out to arrive at schools for Friday 8 March. Additionally, even if some clear proposals could be determined, there would need to be full and proper consultation, which time does not allow. The report therefore proposes a fairly comprehensive review of the formula for 2003/04, but in the meantime it has been possible to make provision to offset a significant proportion of the disadvantages which will be experienced by schools in 2002/03.

Fair Funding Formula and Sixth Forms

3. The schools’ Fair Funding formula is governed by regulations provided for under the Schools Standards and Framework Act 1998. An important element of those regulations is that the mechanics of the formula should be simple and transparent. As such, the formula is a relatively blunt instrument to clawback growth from 27 school with sixth forms and reallocate across all schools in a fair manner.
4. The major stumbling block in clawing back money from those schools with sixth forms is that they have not all benefited equally from the LSC formula. Provisional figures issued by the LSC late last autumn gave some schools growth of up to £180,000, but in at least one case a school did not gain at all. The budget settlement agreed by Council on 5 February has given all schools a small amount of growth, assuming constant pupil numbers over 2001/02. Any attempts to reallocate the £1.8m post 16 growth will result in schools facing cuts of in excess of £30,000. To this extent, we would be replicating one unfair system with an equally unfair replacement.
5. Despite the above, a solution has presented itself during the last week as a consequence of finalising the demography figures for individual schools. Funding included in the base budget for 2001/2002 for retrospective compensation is no longer needed in 2002/2003 (£0.5m). Additionally there is a net clawback of £0.6m from schools in respect of 2001/2002 as a consequence of the January 2002 pupil count being less than the estimated figures used in the formula for that year.
6. As a result, there is an additional £1.1m available within the existing Individual Schools Budget which can be recycled and targeted to Key Stages 2 and 3. This is in accordance with the priorities for the allocation of any additional resources in the Education Budget which were agreed by the Council on 5 February 2002 when approving the 2002.03 budget. Thus, whilst no changes can be made to the formula for 2002/03, it is possible to make provision which in practice offsets some of the effects on schools of the new LSC funding system, although of course this will help other schools as well.
7. The most appropriate way forward is to undertake a fairly comprehensive review of the formula for 2003/04. This will tie in with the new funding framework expected as part of the Education White Paper and Local Government White Paper.

RECOMMENDATIONS

8. The Executive is RECOMMENDED to:

ROY SMITH
Acting Chief Education Officer

CHRIS GRAY
Director for Business Support & County Treasurer

Contact Officer: Matt Bowmer, Acting Head of Finance (Education). Tel: Oxford 815474

February 2002

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