Agenda item

Recommendations

 

The Council’s Executive is asked to note the contents of this report, and to agree:

 

a.       That the Council applies a Minimum Funding Guarantee (MFG) of 0% in the calculation of mainstream school budgets for the 2025/26 financial year.

 

b.       That the Council uses Lump Sum as the methodology for the allocation to school budgets of any surplus funding available within the Schools Block DSG after the calculation of the school funding formula using National Funding Formula (NFF) values for the 2025/26 financial year

 

c.        That the Council uses a higher funding gains cap and higher scaling back percentage for managing the recovery of any funding shortfall on the Schools Block DSG after the calculation of the school funding formula using NFF values for the 2025/26 financial year. In the event of any funding shortfall being too significant to manage through the use of the capping and scaling mechanism, the Corporate Director – Resources and the Corporate Director – Children & Young People’s Service, in consultation with the Chair of the Schools Forum, will determine a school funding methodology that delivers affordability within the 2025/26 Schools Block DSG and associated reserves.

 

d.     That the Council includes an exceptional circumstance lump sum of £50,000 for very small sparse secondary schools (which would otherwise be unable to attract sufficient funding to remain viable) in the 2025/26 North Yorkshire school funding formula.

 

e.     That, pending confirmation of Secretary of State approval, the Council transfers 0.5% of funding from the Schools Block Dedicated Schools Grant (DSG) to the High Needs Block.

 

f.       That the Council applies MFG funding protection of 0% for special schools for the 2025/26 financial year, as prescribed by the DfE.

 

g.     That the Council applies 0% to the Banded Funding allocations (top up/ ‘element 3’ allocations) received by mainstream and special schools and academies for the 2025/26 financial year.

 

h.     That the Council applies 0% to the Banded Funding allocations (top up / element 3 allocations) received by pupil referral units and alternative provision settings for the 2025/26 financial year.

 

i.       That the Council applies 0% to the factor elements within the Special school contextual funding for the 2025/26 financial year.

 

j.       That the Council will continue to lobby for a fairer and more equitable funding settlement for schools in North Yorkshire. We will also continue to lobby for a fairer settlement of High Needs resources.

 

 

Considered – A report of the Corporate Director Children and Young People’s Service in relation to mainstream school and special school funding for 2025/26, as required by guidance issued by the Department for Education (DfE). 

 

The Executive Member for Children and Families, Councillor Janet Sanderson, introduced the report in the absence of the Executive Member for Education, Learning and Skills, and referred to the proposed 0.5% transfer of funding from the Schools Block to the High Needs Block budget for 2025/26.  NYC was forecasting a cumulative budget deficit of £19m on the High Needs budget by 31 March 2025 and if the transfer was not approved this would increase to £29m by March 2026.  The Schools Forum had rejected this proposal and it was reported at the meeting that the DfE had rejected the Council’s application for a disapplication for the transfer of funding.  Two reasons were given: the Council had not demonstrated how it would use the money to ensure a sustainable budget position and that they took into account the schools’ forward position.  The Council had challenged this position and it was noted that the DfE had no long-term sustainable funding plan.

 

Stuart Carlton, the Corporate Director Children and Young People’s Service, reported that the current system was financially unsustainable and the Council would continue to lobby in relation to the 0% transfer and how the deficit would be paid.  Consultation had taken place with all schools and academies in North Yorkshire and the North Yorkshire Schools Forum and it was recommended that the maximum funding protection of 0% for mainstream schools and the DfE mandated 0% funding protection for special schools be applied.  The report made recommendations in relation to a funding strategy should there be a surplus or deficit and recommended maintaining the 2025/26 top up funding at the same rate as for 2024/25.  The Council would continue to lobby for a fairer and more equitable funding settlement for all schools in North Yorkshire.

 

Councillor Carl Les congratulated Stuart Carlton on being awarded a knighthood for services to education in the recent New Year Honours list.

 

Resolved (unanimously)

 

That the contents of the report be noted, and the following agreed:

 

1)               That the Council applies a Minimum Funding Guarantee (MFG) of 0% in the calculation of mainstream school budgets for the 2025/26 financial year.

 

2)               That the Council uses Lump Sum as the methodology for the allocation to school budgets of any surplus funding available within the Schools Block DSG after the calculation of the school funding formula using National Funding Formula (NFF) values for the 2025/26 financial year

 

3)               That the Council uses a higher funding gains cap and higher scaling back percentage for managing the recovery of any funding shortfall on the Schools Block DSG after the calculation of the school funding formula using NFF values for the 2025/26 financial year. In the event of any funding shortfall being too significant to manage through the use of the capping and scaling mechanism, the Corporate Director – Resources and the Corporate Director – Children & Young People’s Service, in consultation with the Chair of the Schools Forum, will determine a school funding methodology that delivers affordability within the 2025/26 Schools Block DSG and associated reserves.

 

4)               That the Council includes an exceptional circumstance lump sum of £50,000 for very small sparse secondary schools (which would otherwise be unable to attract sufficient funding to remain viable) in the 2025/26 North Yorkshire school funding formula.

 

5)               That, pending confirmation of Secretary of State approval, the Council transfers 0.5% of funding from the Schools Block Dedicated Schools Grant (DSG) to the High Needs Block.

 

6)               That the Council applies MFG funding protection of 0% for special schools for the 2025/26 financial year, as prescribed by the DfE.

 

7)               That the Council applies 0% to the Banded Funding allocations (top up/ ‘element 3’ allocations) received by mainstream and special schools and academies for the 2025/26 financial year.

 

8)               That the Council applies 0% to the Banded Funding allocations (top up / element 3 allocations) received by pupil referral units and alternative provision settings for the 2025/26 financial year.

 

9)               That the Council applies 0% to the factor elements within the Special school contextual funding for the 2025/26 financial year.

 

10)           That the Council will continue to lobby for a fairer and more equitable funding settlement for schools in North Yorkshire. We will also continue to lobby for a fairer settlement of High Needs resources.

 

Reasons for Recommendations

 

The local authority is responsible for operating a local school funding formula for mainstream schools and academies in line with the National Funding Formula, Schools and Early Years Finance Regulations and Schools operational guide: 2024 to 2025. The local authority must also engage in open and transparent consultation with all maintained schools and academies in their area, as well as with their Schools Forum, about any proposed change to their local funding formula. The local authority is responsible for making the final decisions on their formula including ensuring sufficient time to gain political approval before the authority proforma tool (APT) deadline in January 2025. Political approval means approval in line with the local authority’s local scheme of delegation; the schools forum does not decide on the formula.

 

Within this framework, the local authority must make some decision prior to the January 2025 deadline in respect of:

-        Minimum Funding Guarantee for mainstream school funding for 2025/26;

-        the funding approach to an overall deficit or surplus on the available DSG allocation (which will not be known until late in December 2024);

-        the inclusion of an exceptional lump sum of £50,000 for very small, sparse, secondary schools within the local formula for 2025/26;

-        the proposed Block transfer of funding from Schools Block to the High Needs Block for 2025/26;

-        any changes to the banded funding/E3 top-up funding or funding framework for 2025/26