Agenda item

Angel Lai, Finance Manager, reported on the Dedicated School Grant position as of Period 05(P05) to end of July 2023 and to seek approval of redesignation of funding to facilitate temporary support for LA Maintained schools in financial difficulty.

Highlighted the following from the report:

a.       DSG forecast overspend remains at £18.7m; driven by high needs block top up and placements costs resulting from increasing EHCP costs and the complexity of children with SEN; advised that is a continuing trend.

b.       Reassurance was given that the team supports and encourages each block to meet their needs within allocated budget.

c.       The decision item for LA maintained schools, set out in 3.1.1 of the report; the redelegation is to enable those schools who can demonstrate they have drawn up a financial plan that is sustainable and enables them to reach in-year balance over a fixed period.  Sums will be provided to support them on a temporary basis until their ambitions are realised.

d.       Table 3 in the report identifies where the surplus funds will be drawn; 3 pots of money; total approx. £1m pounds.

e.       The allocated sums will be repaid to the fund by the school after the agreed period to enable sums to be recycled to others in need.

f.        Officers recommendation is for the Forum to approve the redelegation of the funds identified, to support LA Maintained Schools in financial difficulty.

Points of Clarification:

g.       Table 1, the bottom line the mitigation figure; explanation provided that the full mitigation sum is not projected to be realised; the sum noted is the current projected saving.

h.       Discussion as to why the DSG assumption includes an overspend and what the historic narrative is to explain the position that accepts that the High Needs Block brings with it a deficit.  The ongoing challenge was acknowledged, and all reminded that ‘The Programme’ (agenda item 7) is in place to find a resolution.

i.         A robust question and answer session followed on the redelegation of funds to meet the need of LA Maintained schools.

j.         In summary:

a.       The funds would only be provided to those schools that have set out a plan that results in the loan being paid back; the schools would have a licenced deficit; identified a repayment period; schools are restricted in that they are unable to trade in an overdraft the funds provided would provide that buffer and provide necessary cashflow; the monies paid back will be recycled to assist other schools in the same position; the loan period would be anything from 3 – 5 years;

k.       The Director of Finance, assured the Forum the fund is only available to those who are able to  provide a viable plan that demonstrate repayment; that due diligence would be applied before the loan is agreed; the aim is to put schools on a sustainable setting; challenge is the number of schools that require assistance; the funds will come back in and it will be recycled for future use.

l.         Action: that a report can be provided to the Forum on the terms of loan and use of funds; at the same time being mindful & sensitive in the way data is shared on those involved.

m.     The wider transformation exists to address the deficit position that exist amongst LA maintained schools and nurseries; assurance given that officers will continue to report on the solution to the funding deficit challenges.

n.       An ask, that it is noted that some school settings, non-LA settings, have taken drastic steps to ensure they remain within budget, that has resulted in the reduction in provision and staffing; and that they have not had the advantage of this support.

o.       It was shared that maintained nursery schools continued to face challenges, at a time that they are required to absorb budget challenges and shrink provision but scale up to meet government future commitment to families.

p.       The Chair clarified for all following the discussion; that the £1.1 identified would be treated as a loan to maintained schools and nurseries; those to benefit would have produced plans that would be subject to due diligence; the funds would be loaned for a fixed period of 3 to 5 years;

q.       The Forum was asked if the establishment of this fund was supported.

r.        One objection was noted that of Simon Eakins

Resolved:

1.       That the Forum would support the creation of the loan fund from the sums identified in Table 3 of the report.

2.       That the Forum receive regularly updates on the operation of the loan fund