Dedicated Schools Grant (DSG) Budget Monitoring 2020/21
This report sets out the current position (month 8) of the DSG budget for 2020/21 and outlines the variances and impact on the deficit recovery plan.
1. Recommendations
1.1 NOTE: The current overall DSG allocation and budget position for 2020/21.
1.2 NOTE: The current position within each funding block and impact on the deficit recovery plan.
2. Background
2.1 The Dedicated Schools Grant (DSG) is a ring fenced specific grant and can only be used in support of the schools’ budget and spent on school/pupil activity as defined by the School and Early Years Finance (England) Regulations (2020).
2.2 The DSG is split between four different funding blocks – schools, central school services, early years, and high needs. Each Council’s allocation is largely based upon actual pupil numbers from the October pupil count proceeding the actual financial year. Although separate allocations are received for each block, transfers are allowed between blocks but subject to certain restrictions.
2.3 Most of the grant is allocated to schools – the Individual School’s Budget (ISB) or delegated budget – this is mainly formula driven; the remainder is the Centrally Retained School’s Budget – the non-delegated budget.
2.4 Overspends on the DSG are carried forward and are a first call on the following year’s allocation of DSG. Underspends on the DSG are carried forward to support the future year’s school’s budget.
2.5 The Authority must ensure that DSG is correctly spent and has to report the outturn position to inform the impact upon the following year’s budget position. The budget monitoring of the Authority distinguishes between how services are funded, namely by DSG or by the Local Authority.
2.6 The LA receives its DSG allocation gross (including allocations relating to academies and post 16 provision), and then the Education & Skills Funding Agency (ESFA) recoups the actual budget for these settings to pay them direct, leaving a net or LA allocation.
3. DSG Allocation 2020/21
3.1 The DSG allocation received by the LA will change during the year. Table 1 shows the original estimate made by the LA and the current position, as last notified by the ESFA in July 2020. Further details are contained in Appendix 1. Changes to the allocation could impact on the overall budget position.
3.2 The allocations shown in the table are prior to any transfers between blocks. For the 2020/21 budget the Schools’ Forum has agreed a transfer of £350k from the schools’ block to the high needs block.
3.3 Overall there has been an increase of £586k to the current year allocation, which is explained in the paragraphs below (no change to the previous month 6 report).
Table 1: RBC’s original and revised (current) DSG allocations for 2020-21
| Block | Original estimated DSG allocation 2020/21 Gross | Original estimated DSG allocation 2020/21 Less recoupment relating to Academies | Original estimated DSG allocation 2020/21 Total LA | Revised DSG allocation 2020/21 Gross | Revised DSG allocation 2020/21 Less recoupment relating to Academies | Revised DSG allocation 2020/21 Total LA | Change Total DSG available |
|---|---|---|---|---|---|---|---|
| Schools Block | 95.536 | -49.165 | 46.371 | 95.536 | -49.165 | 46.371 | 0 |
| Central Schools Block | 1.218 | 1.218 | 1.218 | 1.218 | 0 | ||
| Early Years Block | 12.638 | 12.638 | 12.832 | 12.832 | 0.194 | ||
| High Needs Block | 22.472 | -4.162 | 18.310 | 22.395 | -3.829 | 18.566 | 0.256 |
| Total | 131.864 | -53.327 | 78.537 | 131.981 | -52.994 | 78.987 | 0.450 |
| 19/20 Early Years adj. | 0.136 | 0.136 | |||||
| Total Available | 79.123 | 0.586 |
3.4 The main changes that may occur and need to be monitored during the year are as follows:
- Reductions in the schools’ block funding due to any academy conversions. This is because funding is paid direct to these schools by the ESFA, though this has no impact on the LA budget, as expenditure is reduced accordingly. Currently, there are no mainstream academy conversions in process, so the budget remains the same.
- High needs block funding was adjusted in July due to the import/export adjustment: this is where there has been a change to the number of Reading pupils placed in settings outside Reading or a change in the number of pupils from other LAs attending settings in Reading. This is because the LA where the setting is located is responsible for the place funding, so this adjustment ensures any changes in pupil numbers transferring between LAs are properly funded. Overall, this has resulted in a reduction in funding of £78k, as the number of pupils placed outside of Reading has increased by 10. High needs funding has also been adjusted for the conversion of Cranbury College to an Academy. When the budget was set it was assumed the conversion would take place on 1st April; it was on 1st August, so £334k has been added back to the budget to reflect this. There should not be any further changes to this block this year.
- The latest information is that early years funding will (for this year only) be based 9/12 on the January 2020 census, and 3/12 on the January 2021 census due to Covid-19 (the usual split is 5/12 and 7/12). Our original budget used January 2020 census estimates and has now been amended to reflect the January 2020 census figures confirmed in July, which uplifted our allocation by £194k. This is required for payments to providers. The final adjustment for 2019/20 was also made in July; this has added £136k to the current year allocation (no provision for this was made in the 2019/20 accounts as the estimate at that time was relatively low).
4. DSG Budget 2020/21 Month 8 Overall Position
4.1 Appendix 2 contains the 2020/21 budget and current (month 8) forecasts. This is split between the four funding blocks, and broken down by the main reporting lines for the DSG. Appendix 3 contains brief notes on what is included in each line of the budget report.
4.2 Table 2 summarises the current budget and forecast per block. Note that the DSG allocation includes an additional net £0.322m which is ring fenced deficits/surpluses brought forward from 2019/20 and being utilised in 2020/21 (for growth fund, central schools block, and early years).
Table 2: Summary Budget and Forecast 2020/21
| Block | Original budget (£m) | Virements (£m) | Current budget (£m) | Forecast as at month 8 (£m) | Variance as at month 8 (£m) |
|---|---|---|---|---|---|
| Schools Block | 46.011 | -0.087 | 45.924 | 45.302 | -0.622 |
| Central Schools Block | 1.218 | 0.039 | 1.257 | 1.257 | 0 |
| Early Years Block | 13.109 | 0.239 | 13.348 | 13.150 | -0.198 |
| High Needs Block | 18.356 | 0.333 | 18.689 | 19.122 | 0.433 |
| Repayment of Deficit | 2.477 | -0.387 | 2.090 | 2.090 | 0 |
| Sub Total – Net Expenditure | 81.171 | 0.137 | 81.308 | 80.921 | -0.387 |
| DSG Allocation | 78.997 | 0.524 | 79.521 | 79.444 | -0.077 |
| Balance Over/(Under) Allocated | 2.174 | -0.387 | 1.787 | 1.477 | -0.310 |
4.3 The deficit forecast for the end of the financial year is now £1.477m (£881k was reported at the last meeting) compared to the original budget of £2.174m and revised budget of £1.787m. The variances from the original budget are summarised as follows:
| Reduction in deficit amount to be repaid from 2019/20 | -£387,140 |
| School formula – business rates | £1,058 |
| Growth fund | -£622,723 |
| Early year’s contingency not utilised | -£197,978 |
| Reduction in HNB grant due to import/export adjustment | £77,487 |
| Place funding met by 6th form grant | -£32,595 |
| High Needs top-up funding | £464,298 |
| Other DSG funding adjustments (roundings across all blocks) | – £59 |
| TOTAL | -£697,652 |
4.4 Note that because many of these underspends are ringfenced and required for future commitments, this does not mean that the overall deficit has reduced by this amount. The following paragraphs provide more details on the variances.
5. Variances, Current Risks & Emerging Issues
5.1 Repayment of Deficit
The end of year position in 2019/20 was more favourable than when the current year budget was planned and set, so the deficit to be repaid has reduced by £387k to £2.090m.
5.2 Schools Block
- There would only be a variance on maintained primary and secondary school delegated budget allocations due to business rate revaluations or where actual business rates bills vary from the initial school formula allocation. This is due to schools being funded for their business rates like for like. The difference for business rates is currently only £1k.
- The Growth Fund is likely to underspend (as planned), with the surplus funding currently estimated at £623k required to be carried forward towards paying for additional secondary bulge classes in 2021/22 and beyond.
5.3 Central Schools Services Block
Most of the central school services budgets are agreed contributions towards the full cost of a service and the majority will not therefore have a variance. There will be no variance on copyright licences, as this is a national contract agreed in advance. The underspend on the admission services brought forward from last year of £39k is likely to be required in year.
5.4 Early Years Block
- The majority of Early Years Funding (95%) is relating to the free early year’s entitlement for 2, 3 and 4 year olds. The budget is based on the hours funded in the previous financial year at the set hourly rates. The DSG funding due to be received is based on an average of the January 2020 and 2021 census numbers, so in theory, as expenditure is based on the actual uptake of entitlement for each term, any increase or decrease in numbers during the year should be funded if the January census represents the average for the year. Funding is increased or clawed back (by the ESFA) in the following year if there has been an under or over allocation.
- However, for 2020/21, it is expected that only 3/12 of the funding will be based on the January 2021 census, though the arrangements for the Spring 2021 term have not yet been announced. This is because LAs are being encouraged to fund providers in the Autumn term using the previous Autumn numbers if take up of places is significantly lower. We have funded providers on the October 2020 headcount/census but used the 2019 hours of provision if this is higher. The additional “sufficiency” payments to providers has been approximately £645k. A large proportion of this payment is offset by the guaranteed funding based on the January 2020 census, with the remainder met from contingency.
- The contingency budget is £412k (originally set at £367k but added to by carry forward from 2019/20), and the current forecast is that there is £206k remaining. The funding arrangements for the Spring 2021 term are not yet known, but it is possible that further sufficiency payments could be made from contingency if funding over and above that based on January 2021 census is not forthcoming. However, it is unlikely that this could be afforded at the same level as the Autumn payments. Note that the contingency can only be used to fund providers through the early years formula as already set and cannot be used to increase the hourly rates or to change the formula after these have been set for the year.
- Other budgets that pay for central spend are mainly contributions as agreed at budget setting.
5.5 High Needs Block
- Annual expenditure in the HNB is now largely being contained within its annual DSG allocation, and the overall deficit is slowly reducing, so the focus is to continue to drive average costs of placements down in order to repay the deficit.
- Approximately 85% of the high needs block budget is payments for statutory top up fees for pupils/students with Education Health and Care Plans (EHCPs). This is the area of highest risk due to the unpredictability of the number and level (cost) of plans. It is the continued growth in both the number and cost of these plans that has led to the DSG deficit. Table 3 shows the rising trend in the number of EHCPs. Data as at January in each year is used being mid-way through an academic year and is what the ESFA use for data comparisons. The current number of EHCPs (October 2020) is 1,425, an increase of 34 since January 2020.
Table 3: Numbers of EHCPs
| Date | Actual total number | Annual year on yea increase |
|---|---|---|
| 15/16: January 2016 | 1,002 | 43 |
| 16/17: January 2017 | 1,066 | 64 |
| 17/18: January 2018 | 1,175 | 109 |
| 18/19: January 2019 | 1,276 | 101 |
| 19/20: January 2020 | 1,391 | 115 |
- The top up budget for 2020/21 was set based on the number and cost of top ups as at February 2020 and predicted increase (note that not all EHCPs result in a top up payment which is why the top up numbers are lower). The budget and the current top up forecasts (cost and number of placements) are shown in Table 4. The current forecast is £16.006m, which is £464k over budget (the last report showed £15.624m, £0.082m over budget), although the individual variances by type of placement are quite large. The overall numbers of placements are currently 18 over budget.
Table 4: Top Up Budgets and Current Forecasts 2020/21
| Placement type | Budget £ 2020/21 | Current forecast for 202/21 | Variance | Budget numbers 2020/21 | Current actual for 2020/21 | Variance | Budget average cost per place | Current average cost per place | Variance |
|---|---|---|---|---|---|---|---|---|---|
| Special Schools | 8,394,258 | 8,108,474 | -285,784 | 462 | 430 | -32 | 18,169 | 18,857 | 688 |
| Resource Provision | 514,558 | 671,613 | 157,055 | 84 | 99 | 15 | 6,126 | 6,784 | 658 |
| Mainstream | 1,950,140 | 2,015,641 | 65,501 | 417 | 408 | -9 | 4,677 | 4,940 | 264 |
| Nursery | 92,102 | 63,356 | -28,746 | 13 | 8 | -5 | 7,085 | 7,920 | 835 |
| NMSS & Independent | 2,204,158 | 2,530,900 | 326,742 | 47 | 59 | 12 | 46,897 | 42,897 | -4,000 |
| Further Education | 916,690 | 840,292 | -76,398 | 107 | 131 | 24 | 8,567 | 6,414 | -2,153 |
| Pupil Referral Units | 859,867 | 928,287 | 68,420 | 12 | 12 | 0 | |||
| Hospital | 175,450 | 175,450 | 0 | ||||||
| Other Alternative Provision | 434,972 | 672,485 | 237,513 | 38 | 51 | 13 | 11,447 | 13,186 | 1,739 |
| TOTAL | 15,542,196 | 16,006,498 | 464,302 | 1,180 | 1,198 | 18 | 13,171 | 13,361 | 190 |
* PRU/Hospital costs will relate to all pupils placed in these provisions (e.g. costs include excluded pupils without an EHCP who are not included in the numbers above).
- These figures now take into account the increases in top up fees to be paid to Reading schools from September 2020 from which an overspend was expected. However, the larger increase is down to several new expensive placements in Independent schools which could not be avoided. Note that the forecast for other alternative provision assumes current placements will remain to the end of the year, but for many this is short term whilst a permanent placement is found. This position still compares extremely favourably to neighbouring local authorities where significant in year deficits to their high needs blocks are emerging.
- The Inclusion Fund provides additional funding to mainstream schools with a high percentage of pupils with EHCPs compared to our statistical neighbour average. £350,000 has been transferred from the Schools Block to the High Needs block to pay for this. Based on the current numbers of EHCPs in mainstream, the increase in some schools since the Spring term will mean that this budget will likely overspend, possibly by about £100k. This will be reviewed once the Autumn census data is available, but it is clear that the qualifying percentage cannot be reduced as previously thought.
- There is a small saving of £32k in place funding, which is 6th form grant received to offset the payments made to Cranbury for their post 16 places at £10k per place. The current estimate of this grant for the current year is greater than budgeted.
6. DSG Deficit Recovery Plan
6.1 Since 2018/19, the high needs block deficit has been reducing, despite the continuing pressure of increasing numbers of EHCPs. Transfers between blocks including using underspend from other blocks in previous years has helped bring the deficit in the high needs block down, from its peak of £3.4m overspend at the end of 2016/17. Last year’s plan assumed a closing deficit of £2.098m in 2019/20, and the recovery of the deficit to have been achieved by the end of 2022/23. The actual closing deficit last year was £2.090m
6.2 The main elements of the recovery plan are as follows:
- The largest individual top up costs are in specialist placements out of county, particularly non maintained and independent providers. Part of the strategy is to invest in more local provision to avoid having to seek more expensive out of county placements for the growing numbers of pupil’s requiring support. New resource unit places are being developed locally, and a new special school to be located in Wokingham is being built.
- Inclusion of high needs pupils in mainstream schools to avoid being placed in more expensive specialist provision. As part of this, additional funding for schools with a higher than average percentage of pupils with EHCPs was introduced in September 2018. In 2020/21 this cost is being met by a top slice from the schools’ block DSG.
- The LA has also invested some funds to improve the SEND commissioning element that review SEND placements/contracts.
- The increase in allocation of the HNB DSG by approximately £2.0m in 2020/21, and in the following two years.
6.3 The DSG conditions of grant for 2020/21 have changed and now states that any LA with an overall deficit on its DSG account at the end of 2019/20, or whose DSG surplus has substantially reduced during the year, must be able to present a plan to the DfE for managing their future DSG spend. The plan should be shown to the local Schools’ Forum and should be kept regularly updated throughout the year to reflect the most recent forecast position and be viewed as an on-going live document. We have been presenting and updating the plan for Schools’ Forum as part of budget monitoring for the last two years, so this is nothing new for Reading. We also met with the DfE in June, who were satisfied with our plan and progress made.
6.4 In order to support LAs, the DfE has produced a template as a planning tool and which can be used for presenting the plan at Schools’ Forum. This includes some extra detail not previously brought to the Forum which will be collated for a future meeting. In the meantime, Appendix 4 provides information on the current plan, and paragraph 5.5 of this report provided details of the top up forecasts which are the main component of the plan.
6.5 The current forecast is that the high needs deficit will increase by £206k at the end of 2020/21, and the end of year carry forward will be £2.296m. It is still expected that recovery of the deficit will happen in 2022/23, though this is very much dependent on the future high needs DSG allocations continuing to rise as promised by the Government, and that numbers of EHCPs do not significantly increase above the current trend included in the plan.
2. Appendices
Appendix 1 – DSG Allocation 2020/21
| Schools Block | December 2019 DfE notification | LA estimate for budget | July update |
|---|---|---|---|
| Pupil Numbers Primary | 13,096.5 | 13,096.5 | 13,096.5 |
| Rate | £4,172.37 | £4,172.37 | £4,172.37 |
| Allocation | £54,643,444 | £54,643,444 | £54,643,444 |
| Pupil Numbers Secondary | 6,952.5 | 6,952.5 | 6,952.5 |
| Rate | £5,503.69 | £5,503.69 | £5,503.69 |
| Allocation | £38,264,405 | £38,264,405 | £38,264,405 |
| Growth Funding | £1,345,264 | £1,345,264 | £1,345,264 |
| Premises & Mobility Funding | £1,283,373 | £1,283,373 | £1,283,373 |
| actual funding rounding adjustment | £1 | £35 | £1 |
| Gross Allocation | £95,536,486 | £95,536,520 | £95,536,486 |
| Academy Recoupment | -£49,165,490 | -£49,165,490 | |
| Schools Block Net Total | £95,536,486 | £46,371,030 | £46,370,996 |
| Central School Services Block | |||
| Pupil Numbers | 20,049.0 | 20,049.0 | 20,049.0 |
| Rate | £33.61 | £33.61 | £33.61 |
| Allocation | £673,847 | £673,847 | £673,847 |
| Historic Commitments | £544,000 | £544,000 | £544,000 |
| actual funding rounding adjustment | £53 | ||
| Central School Services Block Net Total | £1,217,847 | £1,217,900 | £1,217,847 |
| High Needs Block | |||
| Formula | £22,778,471 | £22,778,471 | £22,778,471 |
| Hospital Funding | £197,435 | £197,435 | £197,435 |
| Additional Allocation | |||
| Pupil Numbers – Special Schools | 287.0 | 287.0 | 287.0 |
| Pupil Numbers – Alternative Provision | 35.0 | 35.0 | 35.0 |
| 322.0 | 322.0 | 322.0 | |
| Rate | £4,213.00 | £4,213.00 | £4,212.86 |
| Allocation | £1,356,586 | £1,356,586 | £1,356,541 |
| Import/Export Adjustment | -313 | -313 | -323 |
| Rate | £6,000.00 | £6,000.00 | £6,000.00 |
| Allocation | -£1,878,000 | -£1,878,000 | -£1,938,000 |
| Additional funding for Special Free Schools | £17,553 | £17,553 | £0 |
| actual funding rounding adjustment | -£45 | -£45 | |
| Gross Allocation | £22,472,000 | £22,472,000 | £22,394,447 |
| Recoupment – academy high needs places | -£2,514,000 | -£4,162,200 | -£3,828,834 |
| High Needs Block Net Total | £19,958,000 | £18,309,800 | £18,565,613 |
| Early Years Block | (Jan ’19 census) | (Jan ’20 census) | (Jan ’20 census) |
| 3 & 4 year olds Universal – Schools | 1,321.6 | 1,369.2 | 1,369.2 |
| 3 & 4 year olds Universal – PVI | 1,463.0 | 1,510.0 | 1,550.2 |
| 3 & 4 year olds Additional – Schools | 268.8 | 270.4 | 262.6 |
| 3 & 4 year olds Additional – PVI | 619.2 | 590.0 | 603.9 |
| Total | 3,673 | 3,740 | 3,786 |
| Rate | £5.22 | £5.22 | £5.22 |
| Allocation | £10,927,454 | £11,126,806 | £11,264,507 |
| 2 year olds – schools | 60.0 | 72.0 | 72.0 |
| 2 year olds – PVI | 325.2 | 270.0 | 279.7 |
| Total | 385.2 | 342.0 | 351.7 |
| Rate | £5.82 | £5.82 | £5.82 |
| Allocation | £1,277,862 | £1,134,551 | £1,166,829 |
| PPG – schools | 191.0 | 204.6 | 205.6 |
| PPG – PVI | 144.0 | 127.0 | 135.8 |
| Total | 335.0 | 331.6 | 341.4 |
| Rate | £0.53 | £0.53 | £0.53 |
| Allocation | £101,204 | £100,176 | £103,125 |
| DAF – eligible pupils | 60.0 | 26.0 | 60.0 |
| Rate | £615.00 | £615.00 | £615.00 |
| Allocation | £36,900 | £15,990 | £36,900 |
| Maintained Nursery Grant | £251,535 | £260,276 | £260,276 |
| actual funding rounding adjustment | £87 | £1 | £2 |
| Early Years Block Net Total | £12,595,042 | £12,637,800 | £12,831,639 |
| SUMMARY GROSS IN YEAR ALLOCATION | |||
| Schools Block | 95,536,486 | 95,536,520 | 95,536,486 |
| Central School Services Block | 1,217,847 | 1,217,900 | 1,217,847 |
| High Needs Block | 22,472,000 | 22,472,000 | 22,394,447 |
| Early Years Block | 12,595,042 | 12,637,800 | 12,831,639 |
| TOTAL GROSS DSG ALLOCATION IN YEAR | £131,821,375 | £131,864,220 | £131,980,420 |
| SUMMARY NET IN YEAR ALLOCATION | |||
| Schools Block | £95,536,486 | £46,371,030 | £46,370,996 |
| Central School Services Block | £1,217,847 | £1,217,900 | £1,217,847 |
| High Needs Block | £19,958,000 | £18,309,800 | £18,565,613 |
| Early Years Block | £12,595,042 | £12,637,800 | £12,831,639 |
| TOTAL NET DSG ALLOCATION IN YEAR | £129,307,375 | £78,536,530 | £78,986,096 |
Appendix 2 – Summary DSG Budget and Forecast 2020/21 as at 30 November
| Line ref | Description Schools Block | Original Budget £m | Virements £m | Current Budget £m | Forecast £m | Variance £m |
|---|---|---|---|---|---|---|
| 1 | Individual Schools Budget – Maintained Schools | 44.325 | 0.003 | 44.328 | 44.329 | 0.001 |
| 2 | Growth Fund | 1.257 | -0.090 | 1.167 | 0.544 | -0.623 |
| 3 | Behaviour Support Services (de-delegation) | 0.176 | 0.000 | 0.176 | 0.176 | 0.000 |
| 4 | Staff costs supply cover (trade unions) (de-delegation) | 0.043 | 0.000 | 0.043 | 0.043 | 0.000 |
| 5 | School Improvement (de-delegation) | 0.130 | 0.000 | 0.130 | 0.130 | 0.000 |
| 6 | Statutory/regulatory Duties (ESG) (de-delegation) | 0.080 | 0.000 | 0.080 | 0.080 | 0.000 |
| 7 | Sub Total Schools Block Net Expenditure | 46.011 | -0.087 | 45.924 | 45.302 | -0.622 |
| 8 | Schools Block DSG Allocation | 46.011 | -0.087 | 45.924 | 45.924 | 0.000 |
| 9 | Balance Over / (Under) Allocated | 0.000 | -0.000 | 0.000 | -0.622 | -0.622 |
| Central Schools Services Block | ||||||
| 10 | Contribution to combined budgets | 0.494 | 0.000 | 0.494 | 0.494 | 0.000 |
| 11 | School admissions | 0.215 | 0.039 | 0.254 | 0.215 | -0.039 |
| 12 | Servicing of schools forum | 0.020 | 0.000 | 0.020 | 0.020 | 0.000 |
| 13 | Prudential borrowing costs | 0.040 | 0.000 | 0.040 | 0.040 | 0.000 |
| 14 | Other Items (copyright licences) | 0.111 | 0.000 | 0.111 | 0.110 | -0.000 |
| 15 | Statutory/regulatory Duties (ESG) | 0.338 | 0.000 | 0.338 | 0.378 | 0.039 |
| 16 | Sub Total Central School Services Block Net Expenditure | 1.218 | 0.039 | 1.257 | 1.257 | -0.000 |
| 17 | Central School Services Block DSG Allocation | 1.218 | 0.039 | 1.257 | 1.257 | 0.000 |
| 18 | Balance Over / (Under) Allocated | 0.000 | -0.000 | 0.000 | -0.000 | -0.000 |
| Early Years Block | ||||||
| 19 | Early Years Funding (free entitlement) | 12.425 | 0.239 | 12.664 | 12.466 | -0.198 |
| 20 | Support for inclusion | 0.100 | 0.000 | 0.100 | 0.100 | 0.000 |
| 21 | SEN support services (Portage/Dingley) | 0.198 | 0.000 | 0.198 | 0.198 | 0.000 |
| 22 | Central expenditure on early years entitlement | 0.385 | 0.000 | 0.385 | 0.385 | 0.000 |
| 23 | Sub Total Early Years Block Net Expenditure | 13.109 | 0.239 | 13.348 | 13.150 | -0.198 |
| 24 | Early Years Block DSG Allocation | 13.109 | 0.239 | 13.348 | 13.348 | 0.000 |
| 25 | Balance Over / (Under) Allocated | 0.000 | 0.000 | 0.000 | -0.198 | -0.198 |
| High Needs Block | ||||||
| 26 | SEN placements – Maintained Schools (first £10k/£6k place funding) | 0.974 | 0.333 | 1.307 | 1.274 | -0.033 |
| 27 | Top up funding – Special Schools & PRU | 9.254 | 0.000 | 9.254 | 9.037 | -0.217 |
| 28 | Top up funding – Resource Units | 0.514 | 0.000 | 0.514 | 0.672 | 0.157 |
| 29 | Top up funding – Mainstream | 1.950 | 0.000 | 1.950 | 2.016 | 0.065 |
| 30 | Top up funding – Nursery | 0.092 | 0.000 | 0.092 | 0.063 | -0.029 |
| 31 | Top up funding – FE Colleges | 0.917 | 0.000 | 0.917 | 0.840 | -0.076 |
| 32 | Top up and other funding – non maintained & independent providers | 2.639 | 0.000 | 2.639 | 3.203 | 0.564 |
| 33 | Additional high needs targeted funding (Inclusion Fund) | 0.350 | 0.000 | 0.350 | 0.350 | 0.000 |
| 34 | SEN support services | 0.572 | 0.000 | 0.572 | 0.572 | 0.000 |
| 35 | Hospital education services | 0.175 | 0.000 | 0.175 | 0.175 | 0.000 |
| 36 | Support for inclusion | 0.425 | 0.000 | 0.425 | 0.425 | 0.000 |
| 37 | Therapies and other health related services | 0.395 | 0.000 | 0.395 | 0.395 | 0.000 |
| 38 | SEN Transport | 0.100 | 0.000 | 0.100 | 0.100 | 0.000 |
| 39 | Repayment of DSG deficit from previous year | 2.478 | -0.387 | 2.090 | 2.090 | -0.000 |
| 40 | Sub Total High Needs Block Net Expenditure | 20.834 | -0.054 | 20.780 | 21.212 | 0.432 |
| 41 | High Needs Block DSG Allocation | 18.660 | 0.333 | 18.993 | 18.916 | -0.077 |
| 42 | Balance Over / (Under) Allocated | 2.174 | -0.387 | 1.787 | 2.296 | 0.509 |
| 43 | Total All Blocks Net Expenditure | 81.171 | 0.137 | 81.309 | 80.921 | -0.388 |
| 44 | Total DSG Allocation Available | 78.997 | 0.524 | 79.522 | 79.444 | -0.077 |
| 45 | Balance – Deficit / (surplus) In Year | 2.174 | -0.387 | 1.787 | 1.477 | -0.311 |
| Memorandum – Budgets Recouped from Gross DSG Allocation | ||||||
| 46 | Individual Schools Budget – Academies | 49.450 | 0.000 | 49.450 | 49.450 | 0.000 |
| 47 | SEN placements – Academies & Post 16 | 4.162 | -0.333 | 3.829 | 3.829 | 0.000 |
| 48 | Total DSG Recouped | 53.612 | -0.333 | 53.279 | 53.279 | 0.000 |
| 49 | Gross DSG Expenditure including Recoupment | 134.783 | -0.196 | 134.588 | 134.200 | -0.388 |
Appendix 3 – Additional Information per Service for Appendix 2 table
SCHOOLS BLOCK
Line 1 – Individual School Budget – Schools formula budget for maintained Primary’s and Secondary’s.
Line 2 – Growth fund – The growth fund budget is for new/growing schools or bulge classes in response to basic need and is allocated to schools from the autumn term based on the criteria set by Schools’ Forum.
DE-DELEGATIONS – Maintained Primary or/and Secondary Schools Only:
Line 3 – Behaviour Support Services – Passported to Cranbury College to supply this service.
Line 4 – Staff Costs to Supply Union Cover – Pays for Union support and supply cover for staff engaging in union duties.
Line 5 – School Improvement – To fund staff and Projects within the service.
Line 6 – Statutory/regulatory duties – formally known as the Education Services Grant, for statutory duties carried out by the LA on behalf of all maintained schools such as internal audit, year-end accounts, central reporting, monitoring compliance with scheme for financing schools.
CENTRAL SCHOOLS SERVICES BLOCK
Line 10 – Combined Budgets – covers contribution towards Commissioning, school improvement advisors, MASH (Multi Agency Safeguarding Hub), virtual school for looked after children, Early Help – children action teams that covers family workers, Welfare, CAMHs and Education Psychology.
Line 11 – School Admissions – contribution towards the statutory admissions service for all Reading Schools.
Line 12 – Servicing of Schools Forum – contribution towards officer time for preparation of reports and attendance at meetings; cost of room hire; arranging meetings, minute taking, web site.
Line 13 – Prudential Borrowing costs – Borrowing costs for schools capital programme has historically been and will be funded by borrowing over many years. This is a small contribution to the overall borrowing costs.
Line 14 – Other Items – Copyright licences – national contract, purchased on behalf of all schools.
Line 15 – Statutory/regulatory duties – formally known as the Education Services Grant, for duties carried out by the LA for all schools, including academies. Includes DSG budgets, school funding formula, payments to schools, statutory returns, education welfare, asset management.
EARLY YEARS BLOCK
Line 19 – Early Years formula funding – 2, 3 & 4 year old free entitlement funding including deprivation and early Years pupil premium and other early years grants relating to maintained nurseries and disability.
Line 20 – Support for Inclusion – Early Years Cluster funding and central staffing in Education department. Supports inclusion of children in early year’s settings, supporting inclusive practices and resources that enable young children with SEND to have their needs met in these settings. There is also a contribution from the high needs block (in line 37).
Line 21 – SEN Support Services – portage and contribution to Dingley.
Line 22 – Central Expenditure on Children under 5 – Early Years Team Staff including compliance, data, sufficiency and performance.
HIGH NEEDS BLOCK
Line 26 – SEN Placements – Place funding for pre 16 maintained Resource units (first £6k), maintained special Schools (first £10k), and Cranbury College up to the date they became an academy.
Line 27 to 30 – Top-up funding for schools – EHCP top-ups for nursery, primary, secondary, special and alternative provisions within any LA that has a Reading financial responsibility for the EHCP. This also includes Pupils without EHCPs in Pupil referral units
Line 31 – Top-up funding for FE Colleges – EHCP top-ups for students in further education colleges.
Line 32 – Top-up funding and other funding – non maintained and Independents – EHCP Top-ups for Independent and non-maintained special schools, and placements in other alternative private provision for pupils with or without a EHCP.
Line 33 – Additional High Needs Targeted Funding (Inclusion Fund) – financial support to schools with a higher than average number of pupils with EHCPs.
Line 34 – SEN Support Services – This includes Sensory Consortium (joint arrangement with other Berkshire LAs), virtual school, and ASD Outreach commissioned to Christ The King School.
Line 35 – Hospital Education Services – This includes Hospital Education unit at Royal Berkshire Hospital and Education for Pupils in Tier 4 CAMHs specialist independent mental health hospital provision which is commissioned by NHS England
Line 36 – Support for Inclusion – Funding for hard to place pupils (through Inclusion panel & Therapeutic Thinking approach), and central staffing (2 posts) in Education department, one for statutory functions including monitoring exclusions and one for ASD advisory support. The final year’s payment to Manor School for the inclusion project, a contribution to the early years inclusion panel, plus early years place funding at Snowflakes.
Line 37 – Therapies and other Health Related services – Contribution towards Speech and Language, Occupational and Physio therapy. Jointly funded with the Clinical Commissioning Group.
Line 38 – SEN Transport – Contributions to SEN School Travel
Line 39 – Repayment of deficit – All of the 2019/20 deficit related to the high needs block, and this is a first call on the 2020/21 resources.
RECOUPMENT
Line 46 – Individual School Budget – School formula budgets recouped for academies.
Line 47 – SEN Placements – Placement
funding recouped for academy resource unit places (£6k) and special school
places (£10k), and Cranbury College from the date they became an academy.
Appendix 4 – Deficit Recovery Plan – as at November 2020
Background
The DSG deficit peaked at £3.4m at the end of 2016/17 . Of this the HNB deficit was £3.2m.
Since then it has been gradually reducing, even though numbers of EHCPs have continued to rise, and HNB income has been largely static.
This has been achieved through using underspends from other blocks, and controlling costs as per the strategy.
Highlights of 2019/20 Outturn
Overall the DSG deficit has gone UP from a total of £1.606m at the end of 2018/19 to £1.768m at the end of 2019/20, an increase of £163k – mainly due to surpluses b/f from schools and early years blocks offsetting the deficit being used in year.
The high needs deficit has gone DOWN from £2.245m at end of 2018/19 to £2.090m at end of 2019/20, a total of £155k repaid.
Actual in year HNB expenditure in 2019/20 was £292k MORE than in year HNB DSG allocation (the £447k transfer of DSG from the Schools’ Block has brought the in-year position into surplus).
Compared to the original budget set, the top up budget was £226k overspent, or 1.6%; underspends in place funding and inclusion funding has offset this within the block.
Given the continued increase in numbers of EHCPs (from 1,277 January 2019 to 1,391 in January 2020, an increase of 8.9%), costs are managing to be contained and are not spiralling out of control.
Recovery Plan Strategy
Focus is on High Needs Block – all other blocks deficits/surpluses are being managed and balanced within a two year period.
Emphasis is on control of EHCP top up costs – being the largest proportion of the spend, and with a statutory requirement to provide this funding, so demand led. As follows:
- SEN panel is robust and consistent in its decision making; EHCPs are necessary and funding is set at the right level/banding and reviewed annually.
- Ensure out of county independent/NMSS costs and annual reviews are negotiated at the right level through the commissioning team, and inflation is contained to a reasonable realistic level.
- Inclusion in mainstream – help schools in providing the right support for their EHCP pupils, and provide additional funding through the inclusion fund (money transferred from schools block – £350k in 2020/21)
- Maximise lower cost local provision – this includes additional new places in resource units and new local special school
- Minimise higher cost placements in Independent/NMSS where possible by providing good local provision.
Ensuring minimal increases in other contracts in HNB (no greater than inflation) – negotiated by commissioning team
Assumptions Used in Current 3 Year Recovery Plan
Increase in HNB DSG annually – assumed £2m 2021/22 & 2022/23, the same level of increase as in 2020/21. The overall funding for schools and high needs is due to rise by similar amounts, though the split is not known.
£350k transfer from SB to HNB for inclusion funding continues until the deficit is repaid.
All other funding blocks balance in year/carry forward their balances – underspends in other blocks will not offset HNB deficit
All non top up costs in HNB remain static beyond 2020/21
The number of top ups overall continue to increase year on year at current EHCP trend (90 – 100) and adjusted in type of provision for known changes e.g. special schools go up and ind/NMSS go down
Average cost of top ups increase annually by inflation at an average 2%
Current HNB Recovery Plan
Based on the above assumptions, the deficit is repaid in 2022/23.
This is only possible with the assumed additional DSG funding, and that current trends on numbers/costs of EHCPs continue and are not significantly exceeded.
The deficit is recovered because previous years overspends are now built into the base and are covered by the increased grant.
| Amount | 2016/17 | 2017/18 | 2018/19 | 2019/20 | 2020/21 | 2021/22 | 2022/23 |
|---|---|---|---|---|---|---|---|
| Brought forward | £2.057m | £3.228m | £2.860m | £2.245m | £2.090m | £1.787m | £0.605m |
| In year | £1.171m | £-0.368m | £-0.615m | £-0.155m | £-0.303m | £-1.182m | £-1.829m |
| Carried forward | £3.228m | £2.860m | £2.245m | £2.090m | £1.787m | £0.605m | £-1.224m |
Updated Plan taking into account latest in-year forecast
| High Needs Budget (Net of Recoupment for Academy Place Funding) | 2019/20 actual | 2020/21 budget | 2020/21 forecast | 2021/22 | 2022/23 | 2023/24 |
|---|---|---|---|---|---|---|
| Expenditure | ||||||
| Place Funding | 2,429,700 | 1,073,500 | 1,374,205 | 1,073,500 | 1,073,500 | 1,073,500 |
| Top Up Funding | 14,283,908 | 15,542,196 | 16,006,498 | 17,128,264 | 18,480,661 | 19,999,914 |
| Other | 1,453,749 | 1,740,800 | 1,740,800 | 1,740,800 | 1,740,800 | 1,740,800 |
| Total High Needs Block Expenditure | 18,167,357 | 18,356,496 | 19,121,503 | 19,942,564 | 21,294,961 | 22,814,214 |
| DSG High Needs Block Funding | -18,322,000 | -18,659,800 | -18,915,613 | -20,659,800 | -22,659,800 | -23,159,800 |
| In Year High Needs Block | -154,643 | -303,304 | 205,890 | -717,236 | -1,364,839 | -345,586 |
| Add brought forward deficit / (surplus) | 2,245,003 | 2,090,360 | 2,090,360 | 2,296,250 | 1,579,015 | 214,176 |
| Planned Year End Position | 2,090,360 | 1,787,056 | 2,296,250 | 1,579,015 | 214,176 | -131,410 |
| Overall DSG Position (Net of recoupment) | 2019/20 | 2020/21 | 2020/21 | 2021/22 | 2022/23 | 2023/24 |
| Expenditure | ||||||
| Schools Block | 44,593,880 | 46,010,770 | 45,302,135 | 46,010,770 | 46,010,770 | 46,010,770 |
| Central Schools Services Block | 1,290,736 | 1,217,850 | 1,257,064 | 1,217,850 | 1,217,850 | 1,217,850 |
| Early Years Block | 12,462,005 | 12,595,040 | 13,149,627 | 12,595,040 | 12,595,040 | 12,595,040 |
| High Needs Block | 18,167,357 | 18,356,496 | 19,121,503 | 19,942,564 | 21,294,961 | 22,814,214 |
| Total Expenditure | 76,513,978 | 78,180,156 | 78,830,329 | 79,766,224 | 81,118,621 | 82,637,874 |
| DSG Income | ||||||
| Schools Block | -44,496,700 | -46,010,770 | -45,923,816 | -46,010,770 | -46,010,770 | -46,010,770 |
| Central Schools Services Block | -1,330,000 | -1,217,850 | -1,257,107 | -1,217,850 | -1,217,850 | -1,217,850 |
| Early Years Block | -12,842,060 | -12,595,040 | -13,347,604 | -12,595,040 | -12,595,040 | -12,595,040 |
| High Needs Block | -18,322,000 | -18,659,800 | -18,915,613 | -20,659,800 | -22,659,800 | -23,159,800 |
| Total Income | ########## | -78,483,460 | -79,444,141 | -80,483,460 | -82,483,460 | -82,983,460 |
| In Year Net Position – Deficit/(surplus) | ||||||
| Schools Block | 97,180 | 0 | -621,681 | 0 | 0 | 0 |
| Central Schools Services Block | -39,264 | 0 | -43 | 0 | 0 | 0 |
| Early Years Block | -380,055 | 0 | -197,978 | 0 | 0 | 0 |
| High Needs Block | -154,643 | -303,304 | 205,890 | -717,236 | -1,364,839 | -345,586 |
| Total Net | -476,782 | -303,304 | -613,811 | -717,236 | -1,364,839 | -345,586 |
| Add brought forward deficit (net) | 1,791,852 | 1,768,221 | 1,768,221 | 1,476,549 | 1,579,015 | 214,176 |
| Brought forward ring fenced amounts in other blocks | 453,151 | 322,139 | 322,139 | 819,702 | 0 | 0 |
| Planned Year End Position | 1,768,221 | 1,787,056 | 1,476,549 | 1,579,015 | 214,176 | -131,410 |
Last updated on 14/04/2023
Dedicated Schools Grant (DSG) Budget Monitoring 2020/21