School Funding Arrangements for 2018-19

The main points were:

• A further £1.3 billion of funding has been allocated nationally to schools for the period 2018-19 (£416m) to 2019-20 (£884). This is in addition to the £1.3 billion already committed for this period in the 2015 spending review. Nationally, schools and high needs funding will rise from £41billion in 2017-18 to £42.8 billion in 2018-19 and to £43.5 billion in 2019-20, a total increase of £2.6 billion between 2018-19 and 2019-20.
• The government consulted on the introduction of a National Funding Formula (NFF) for schools in the early part of 2017 and had an unprecedented 25,000 responses. The government have listened carefully to the feedback and will respond in full to the consultation later this month along with new Local Authority (LA) funding allocations for 2018-19 and 2019-20 based on the new schools NFF.
• A schools’ “soft” NFF will be introduced from 2018-19 and will initially be for the period 2018-19 to 2019-20. Spending plans for the years beyond 2019-20 will be set out in a future spending review.

Operational Guidance - Detail

The Department for Education (DfE) has recently published its operational guidance for school funding arrangements for 2018-19 which provides greater detail to support the SofS announcement. A copy of the full document can be accessed here: Operational Guide

There are a number of significant changes as follows:

1. The DfE are introducing a NFF for 2018-19 for the schools, high needs and the new central school services blocks. Each block will be determined by a separate NFF calculation.
2. Provisional Local Authority (LA) allocations for 2018-19 will be announced later this month, followed by final allocations in December 2017 (based on the October 2017 census data).
3. The NFF will remain “soft” for both 2018-19 and 2019-20, meaning for the Schools Block that the NFF rates will be applied to individual school budgets and then aggregated at LA level to provide the new LA total for the Schools block. This funding will then be passed to each LA for them to continue to distribute to their schools through a local funding formula.
4. There is a clear expectation from the DfE that all LAs will undertake a consultation with all their schools and academies in the autumn to inform final decisions about changes to their local funding formula.
5. DSG baselines for each block have been updated to reflect the most recent decisions around our local spending plans, e.g. the movement of funding from the Schools block into the High Needs block that we agreed for 2017-18.
6. For 2018-19 the DfE have confirmed that gains of up to 3% a year for some schools and a 0.5% a year per pupil cash increase for every school will be provided through the NFF Schools Block allocations to LAs. This does not mean that schools will receive these increases as this will be subject to local decision on our local formula.
7. The NFF will provide LAs with at least £4,800 per pupil for all Secondary school pupils (who have pupils in year groups 10 and 11) by 2019-20. A new formula factor is being introduced as a transitional measure in 2018-19 to help achieve this. Exactly what factors are included in assessing whether the £4,800 has been achieved is still to be confirmed.
8. Within the High Needs block, the DfE have confirmed that they will provide at least 0.5% overall increase in 2018-19. In Kent this would equate to just under £1m.
9. The Minimum Funding Guarantee (MFG) calculation, which runs alongside our local funding formula, will remain in 2018-19 but LAs will have the flexibility to set the rate between 0% and -1.5%.
10. The Schools Block will be ring-fenced in 2018-19, but LAs will be able to move up to 0.5% of their Schools Block funding out with the agreement of the Schools’ Funding Forum (SFF). Based on our current years Schools Block this would equate to approx. £4.0m. LAs will be expected to demonstrate to their SFF that they have consulted on such a transfer. There will be an exceptions process, which will require Secretary of State approval, for considering transfers below 0.5% that are not supported by the Forum and also those above the 0.5% level.
11. The new central schools services block, which funds things like Fair Access and some of the former ESG services, will be subject to a NFF which will contain a maximum reduction of 2.5% on current levels. It is anticipated that we will see our funding reduced but we won’t know the amount until later this month.

There are also a number of smaller changes to be aware of.

12. LAs will be able to use both current FSM and Ever Six FSM within their local formula (previously they have been able to use one of these measures, not both). We currently use current FSM to reimburse schools for the actual costs of the meal.
13. The LAC Pupil Premium rate is increasing in 2018-19 (but we don’t yet know by how much) rather than including a LAC factor within the NFF. We currently have a LAC factor within our local formula at a rate of £525 per LAC pupil so will need to consider whether this is retained in full, part or removed completely once the LAC Pupil Premium rate increase is known.

A copy of the timetable is shown below at Appendix 1.

Summary

In light of the information above we now expect to receive more in 2018-19 than the £11.2m that was originally proposed in the stage 2 NFF consultation. Exactly how much is unknown and can only be confirmed when the additional information is published.

The guidance contains better news that we had expected in relation to High Needs. Firstly we are due to receive a 0.5% (c. £1m) increase on the High Needs block and secondly we have the option, subject to consultation and Forum approval, to transfer up to 0.5% (c. £4m) of the Schools Block across to High Needs.

We will provide further information to schools once the full response to the NFF consultation, the NFF rates and Kent’s provisional 2018-19 allocation have been published.

Appendix 1

Timetable