Consultation on School Funding Arrangements for Shropshire Schools from April 2015

1. Consultation on School Funding Arrangements for Shropshire Schools from April 2015 Meeting for Headteachers and Governors Lord Hill Hotel, Shrewsbury 2 October 2014

2. Background • Significant reforms to local school funding formula since 2012-13 • Government’s recently acknowledged current national schools funding system is unfair and out-of-date • Government’s aim to move to a National Fair Funding Formula in next parliamentary term

3. Changes from April 2015 • Following consultation, Government announced, in July 2014, £390m of additional Dedicated Schools Grant (DSG) • Allocated to lowest funded local authorities from April 2015 • Shropshire will receive an additional £297 per pupil from April 2015

4. Changes from April 2015 • Based on October 2013 census data this equates to £10.37m – a 7.2% increase to the schools block element of the DSG • Actual additional allocation will be based on October 2014 census data

5. Changes from April 2015 • Additional funding delegated to schools must be through the local funding formula • Allowable factors include:

6. Context • Pupil numbers in Shropshire bucking national trend of demographic growth • Projected decline in pupil numbers is not evenly spread across Shropshire • DSG is based mainly on pupil numbers and so a fall in pupil numbers will reduce the funding for schools in coming years

7. Steer from the Administration The Administration of Shropshire Council is determined to encourage collaborative working, consideration of alternative models of education provision and the more efficient use of delegated resources. It believes school governing bodies need to be challenged to address these issues and to ensure that the Shropshire school funding formula promotes more sustainable ways of working. The formularisation of the potential additional funding for Shropshire schools in 2015-16 could offer a degree of protection, but only in the very short term for the most financially vulnerable schools in the remotest communities. However, this must be linked to increasing awareness and understanding within individual school governing bodies, and among clusters of schools, of the potential impact of significant falls in projected pupil numbers in their local areas over the next five years. Any changes to the funding formula must place Shropshire schools in the best possible position to ensure a smooth transition to a national funding formula, which is likely to be implemented in the next parliamentary term.

8. Recommended Changes from April 2015 - Overview Following consideration of various models for allocating the additional funding using the allowable formula factors, Shropshire Schools Forum recommend: • An increase to sparsity funding • Remainder allocated on a per pupil basis (AWPU) across all Shropshire maintained schools, academies and free school

9. Recommended Changes from April 2015 - Sparsity • To capture Shropshire’s sparse schools the sparsity distance measure to remain at 3 or more miles for primary schools and 9 or more miles for secondary and all-through schools. • The number on roll threshold to remain at <150 (21.4 average year group) for primary and <600 (120 average year group) for secondary

10. Recommended Changes from April 2015 - Sparsity • To achieve a fair and appropriate sparsity funding allocation, ensuring core funding covered core expenditure levels for small sparse primary schools, the sparsity funding increase to £50,000 on a tapered approach from £30,000 in 2014-15.

11. Recommended Changes from April 2015 - Sparsity • To achieve a fair and appropriate sparsity funding allocation, ensuring core funding covered core expenditure levels for small sparse secondary schools, the sparsity funding increase to £100,000 on a flat rate approach from £40,000 in 2014-15.

12. Recommended Changes from April 2015 - Sparsity Based on October 2013 data: • 14 primary schools and one secondary school attract sparsity funding. • This proposed increase to sparsity funding in Shropshire secondary and primary schools costs an additional £198,800.

13. Consultation Questions

14. Recommended Changes from April 2015 – Pupil-led • The remainder to be allocated on a per pupil basis through the AWPU • Any increase to the AWPU funding within the funding formula to schools will have a corresponding impact on the level of minimum funding guarantee (MFG) a school receives.

15. Recommended Changes from April 2015 – Pupil-led • As AWPU increases, MFG reduces • This release of MFG allows more funding to be allocated through the AWPU

16. Recommended Changes from April 2015 – Pupil-led • After taking into account the proposed increase to sparsity funding and the recycling of MFG, the additional funding allocated on a per pupil basis equates to £333 per pupil

17. Consultation Questions

18. Important Points for Schools MFG impact • For schools in receipt of MFG protection any new additional funding may either all, or in part, be offset by a corresponding reduction to their MFG allocation initially

19. Minimum Funding Guarantee Example

20. Important Points to Note Falling Rolls • Schools with falling rolls will see reductions to their funding as it is mainly pupil driven • MFG does not protect against a falling roll

21. Important Points to Note Increased Cost Pressures • Schools 2015-16 AWPU value will be determined after all 2015-16 DSG pressures, including high needs places and provision costs, are taken into account • Schools face increasing cost pressures in relation to pay awards, incremental progression, increasing employers’ pension contributions and non-pay inflation costs

22. Important Points to Note Collaborative Working • Schools need to work together to find local solutionsto falling rolls and funding over the next few years • Need to ensure efficient use of delegated resources

23. Budget Planning Tools • School Funding Modelling Tool – to help schools estimate future year budget share allocations to aid budget planning • Shropshire Benchmarking Tool – to enable Shropshire schools to compare their income and expenditure with other similar Shropshire schools

26. Next Steps

27. Any Questions?