Finance and Budget Briefings 2015-16

Financial Year

toilets

fire exits

breaks

timings

phones

confidentiality

Domestics

Agenda• Governor Roles and Responsibilities• Role of Schools’ Accountancy Team

- What we do with the data submitted- Governor responsibilities (Interactions)

• Financial Context• 2015-16 Budget

- How the additional £9.5m has been allocated- Changes from 2014-15 and a re-cap of the figures- Sparsity- Pupil Premium - Capital

• New Budget Toolkit and recap of processes and deadlines• Future Planning - beyond 2015-16• Messages from our partners – Schools Choice and EFMS

To contribute to the work of the governing body in ensuring high standards of achievement for all children and young people in the school by:•Setting the school’s vision, ethos and strategic direction.•Holding the headteacher to account for the educational performance of the school and its pupils.•Overseeing the financial performance of the school and making sure its money is well spent.

Governor Roles & Responsibilities

• for the ‘purposes of the school (usually taken to mean for the ‘educational benefit of the school’s pupils’).

• for the benefit of pupils in other schools.

• to provide community facilities or services.

Governing bodies can spend the budget delegated under the Scheme

Role of Schools Accountancy Team

• The Schools Accountancy Team provides the statutory aspects of finance in Schools as well as providing a wide range of support on other financial matters.

• We are part of Suffolk County Council (SCC) and sit under of the Resource Management Directorate.

• Schools do not pay for our support and we are not funded from Dedicated Schools Grant (DSG), we are funded from SCC base budget.

Statutory Finance and Support

Under the Scheme are:•reviewing schools’ budget plans;•carrying out high level monitoring of school budgets;•agreeing a deficit reduction programme with schools in deficit;•challenging excess surplus balances held by schools without good reason;•planning and carrying out an audit programme for schools, taking into account their SFVS returns •intervening in schools causing financial concern.

LA’s responsibilities to governors

• We use the Budget Plan and Strategic Plan to carry out a quantitative risk assessment of all Schools.

• Schools are assessed on twelve risk factors, the maximum a school can score is 18 risk points. Schools that score over 4 risk points are allocated a monitoring officer.

• We do not carry out detailed checks or correct errors on budget plans. These are the schools documents and we assess based on what is submitted.

What do we do with the School finance data you submit?

Schools are allocated a Monitoring Officer when:

•They score over four risk points (44)

•They are converting to Academy (23)

•They are closing e.g. SOR (6)

•Licenced Deficit or NOFC issued (13)

•A concern has been raised by LIS or Internal Audit. (17)

Schools we work with

Key Deadlines and Interactions with the team – Governor Deadlines

Activity Deadline

Budget Plan approved by Governors 1st May

Strategic plan approved by Governors 29th May

SFVS approved by governors & submitted to SAT 31st December

Financial Context

Financial Context• Cash frozen Dedicated Schools Grant (DSG) for

most authorities. Suffolk has been awarded £9.5m additional funding due to being a poorly funded Local Authority. We still remain a low funded authority compared to others.

• Pupil Premium will continue to be funded as an allocation outside DSG

• Minimum Funding Guarantee (MFG) remains at -1.5%,gains are capped at 7.5%.

• MFG does not protect the overall budget, therefore, if pupil numbers fall, funding falls.

• Schools will have to bear the cost of NI increases, no additional funding for this.

National Data Set

• All data used is provided by the EFA.• It is based on returns submitted by schools• The main driver is pupil numbers - October

Census• With the exception of pupil numbers all other

data comes in as a % profile

Academies and Free Schools

• Schools Accountancy Team calculates academy and free School budgets in the same way as Local Authority (LA) maintained schools

• Free Schools are funded on an average formula calculated by the EFA, therefore the amount recouped from the LA bears no relation to the funding a free schools receives. The EFA makes up the additional funding from a central pot.

• Funded from September to August to reflect the academic year.

This session is primarily aimed at maintained schools, but still applies to academies

2015-16 Budget

• Suffolk received an additional £9.5 million to allocate in 2015-16:

• Early Years Block £0.6m – applied to the hourly rates (base and quality)

• Schools Block £6.3m – applied to AWPU• High Needs Block - £2.6m.

– £0.35m to reduce the targeted support threshold to 5% from 15%.

– £1.0m would be used to help increase capacity in specialist provision.

– £1.25m Service redesign

Additional Funding

DfE, position is as follows:

The position is that currently we do not intend the £390m to be a one-off, but an addition to baseline budgets. However

the final position in 2016-17 onwards will depend on two things that are currently uncertain:

1. The total budget DfE has to spend, which will be agreed with Treasury in the next Spending Review.

2. Any funding policy changes that the government decides to make before we allocate 2016-17 funding. Those decisions will be taken after the general election.

Is the additional £9.5m recurrent?

How DSG Allocation is spilt between Blocks

• The DSG is ring-fenced.

• However the three blocks are not individual ring fenced.

• Funding can be moved between blocks – With School Forum Approval.

Total Schools Block = £387.4m

Free Schools Element = (£8.1m)

Centrally Retained DSG = (£9.1m)

Growth Fund = (£1.2m)

Total available to allocate

to Schools = £368.9mOf this funding £0.88m is non recurrent, this is the school block share of the underspend from 2013-14 and is a one off for 2015-16 budget

equates to approx £10 per head.

Schools Block 2015-2016

Total Early Years = £33.7m

Central Expenditure = (£2.1m)

Total available that is

allocated to Schools or PVI = £31.6mOf this funding £0.2m is non recurrent, this is the Early Years block share of the underspend from

2013-14 and is a one off for 2015-16.

Early Years 2015-2016

Total High Needs Block = £45.3m

EoTAS and other provision = (£5.2m)

Out of County providers = (£8.2m)

Special and PRU Funding = (£13.1m)

Service redesign & development = (£0.9m)

Total available that is

allocated to Schools = £17.9mOf this funding £0.1m is non recurrent, this is the High

Needs block share of the underspend from 2013-14 and is a one off for 2015-16.

High Needs 2015-16

So how is the DSG Spent?

1) AWPU

- Primary unit £2,664 Increase of £58

- KS3 unit £3,868 Increase of £58

- KS4 unit £4,272 Increase of £58

2) Deprivation - Deprivation (Amounts based on IDACI scores). Rates

start at £400 and go up to £1,605

3) Looked After Children - £925 cash lump sum for each LAC

Primary & Secondary

4) Low cost, high incidence SEN - Primary > 78points £885

Secondary level 3 or below in English or Maths £1,110

Pupil Led Factors

5) English as an Additional Language (EAL) £1,500 for each eligiblepupil for their first year in education, the same rate for Primary andSecondary

6) Lump Sum -The same for all schools, whatever size or phase.Value - £114,000

7) Split Sites - To assist schools with transport costs between sites.Primary - £1,000 Secondary - £5,000

8) Rates - Schools will be funded on actual rate costs.

9) Exceptional Factors – Rent - Schools will be funded on actual cost,for those qualifying.

10) Sparsity - Factor introduced to protect necessary small and ruralSchools, factor paid to qualifying schools

• Concerns were raised by some schools last year about the level of capping applied to their budget.

• If the cap had not been applied they would have received considerable sums through the sparsity factor.

• The Local Authority proposed to Forum a review of the amount of funding allocated through sparsity, to see what impact lowering the funding would have on the amount schools were capped.

Sparsity

Pupil Premium• Specific to individual children• LA advises Schools to transfer funding appropriately, where

pupils are in dual placements or move schools.• The grant has been extended to children in early years

settings.

Rates• £1,900 for all looked after children• £1,320 for primary-aged pupils• £935 for secondary-aged pupils• £302.10 per year for each eligible child that takes up

full 570hrs with a provider.• £300 for service children

Per School Per Primary Full time equivalent Pupil

Per Secondary Full time equivalent Pupil

Per PRU or Special Full time equivalent pupil

Post 16

£4,000 £11.25 £16.88 £33.75 £22.50

Devolved Formula Capital Rates(Non VA schools)

• VA Schools hear directly from their diocese

-Buildings are legal responsibility of aiding bodies/governors

-Any spend on buildings seen as a donation to aiding bodies funds

-VAT not recoverable, however may be changes to VAT treatment

-10% contribution from the schools own budget

Capital• Funding remains at low level for both schools and LA• Projected Funding to LA

- Maintenance £8m (reduces with Academies)

- Basic Need £1m (Suffolk is lobbying for more)

Suffolk will be adding to this from borrowing to build the schools we need.

• SCC priorities remain: – School Organisational Review– Urgent Health and Safety condition work– Place provision

Any Questions ?

New Budget Toolkit and Strategic Planning Toolkit

• Based on three year Medium Term Plan.• Only one scenario for each year - Realistic

1 Year Budget Plan

• Same format

• One extra column which enables an estimated outturn to be input.

• No separate Budget Report for Governors, instead a toggle button which will hide and unhide the columns not relevant to Governors.

Summary of Changes

Strategic Plan = 3 year Plan•There is one toolkit for both the 1 year plan and the 3 year plan – schools submit twice. •3 year plan looks the same as the 1 year plan•There is an Actual Outturn column on the 3 year plan - as actuals will be known at this point.•1 year budget column on 3 year plan will be automatically completed from the virement tab.•Schools are required to estimate their budgets for the next two years.

Summary of Changes

• Working document• Submitted twice by Schools ( Naming convention 1

year plan & Strategic plan)• Detailed line-by-line• Submitted via AVCO

First Step: 2015-16 Budgeto Agreed by Governors by 31st March 2015o Electronic copy to LA by 1st May 2015

Second step: 2016-17 and 2017-18 budgeto Governors to agree Plans by Summer half-termo Electronic copy to LA by 29th May 2015

Processes and Deadlines

Any Questions ?

Future Funding

Responding to uncertainty – What can Schools do?

• Ensure good financial management

• Ensure good value for money

- Benchmarking

- Staffing

- Procurement

- Free School Meals

• Strong partnerships

Good Financial Management

• Works closely with Schools Accountancy Team• Sound budget and medium term plans• Avoiding basic errors in submissions• Proper involvement and sign up of governors• Good quality and robust on-going monitoring• For schools in deficit or at risk - robust recovery

plans with clear underlying assumptions• For schools with surpluses – clear plans for how

that surplus can be used, with a focus on raising standards, assets maintenance, and managing risk

Good Financial Management

Financial YearReserves at Year End

No of Maintained schools at End of year

£ million2009-10 19.4 355 2010-11 20.8 333 2011-12 25.4 317 2012-13 28.1 299 2013-14 27.9 286

Good Value for MoneyBenchmarking http://www.education.gov.uk/schools/performance/•Enables comparisons with similar schools•Enables comparison across local authorities•Enables comparison of outcomes as well as costs•Based on schools own published data

Looking at pay as well as non-payStaffing accounts for approximately 80% + of a school’s budget •Vacancies give opportunity to make changes•Think about grading, full or part time, contact time, sharing specialist staff•Incentives to take on middle school staff•Don’t underestimate the affect of Pension and NI changes

Good Value for Money• Avoiding procurement risk

– Leases

– Finance leases are considered a form of borrowing and schools cannot enter into borrowing without the secretary of states permission.

– High risk items, IT, telephony, copiers, promotions

– When in doubt get advice – all schools buy into the procurement advice service.

• Free School Meals– Impact of Universal Infant Free School Meal policy – slight fall in FSM

registration since the introduction of this policy affects Pupil Premium.

– We are losing approx. £5 million of Pupil Premium through non registration.

– Think of other incentives, improved web presence, taster days, promotion when parents are in the school.

Strong Partnerships• Does not just mean formal federation• Sharing specialist staff, knowledge, skills, or

facilities.• Especially important to think about shared staffing• For formal federation no disincentive in the budget

setting process.• Federation budgets are set as individual schools

and then added together to give federation budget. So there is no loss of lump sum.

Any Questions ?

Schools Accountancy Team:

Telephone: 01473 265626E mail: sat@suffolk.gov.uk

Website: www.suffolklearning.co.uk/leadership-staff-development/schools-

accountancy

SOR Policy: 01473 260791fiona.heath@suffolk.gov.com

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