The Redbridge Schools Forum met on Tuesday 12 November 2024 to discuss a range of financial and operational matters affecting schools in the borough. Key decisions included the approval of changes to the Redbridge Scheme for Financing Schools and the inclusion of an exceptions process in the Falling Rolls and Growth criteria. The forum also received updates on Early Years funding, High Needs funding, SEND capital projects, and the financial health of local schools.

Early Years Budget Grant

The forum was updated on the Early Years Budget Grant (EYBG) for 2024-25, which aims to support early years providers with costs following the teacher pay award. The grant, covering September 2024 to March 2025, totals £275,075 for Redbridge, with an hourly rate of £0.11 for universal and extended entitlements for three- and four-year-olds. This funding will be distributed through an additional hourly top-up based on actual take-up in the Autumn 2024 and Spring 2025 terms. The Department for Education (DfE) guidance states that local authorities must distribute all EYBG funding to providers and encourages targeting this funding to address workforce pressures. Redbridge has not consulted directly with providers on this allocation but has considered outcomes from previous consultations regarding the distribution of similar grants.

High Needs Funding and Block Update

An update was provided on the High Needs Block and the activities of the High Needs Funding subgroup. The subgroup, which includes representation from various school sectors, early years providers, and parent carers, aims to review funding allocations and develop more effective approaches for supporting children and young people with Special Educational Needs and Disabilities (SEND).

The report highlighted a significant increase in high needs expenditure. In 2023/24, the allocation saw a £4.716m increase, but expenditure rose by 19%, resulting in an in-year pressure of £0.230m and a reduction in reserves. Projections for 2024/25 indicate a further £2.489m in-year pressure, which could reduce reserves to £0.949m. If current trends continue, a projected £2.025m in-year pressure by the end of 2025/26 could lead to a negative reserve balance.

The report detailed the breakdown of the 2024/25 High Needs Budget, showing projected variances across service areas. Mainstream primary schools are projected to have a variance of £1.189m, mainstream secondary schools £0.429m, and special schools £0.558m. Significant pressures are also noted in non-maintained special schools and independent schools (£1.370m), pupil referral units (£0.524m), and personal travel budgets (£0.150m).

The number of children and young people with Education Health and Care Plans (EHCPs) is increasing by an average of 10% year-on-year, with SEN support rising at a slower rate of 7%. The report also discussed the implementation of Option 1b for tuition services, where schools retain pupil-led funding and commission services at a subsidised rate, following feedback from special and mainstream schools.

National Funding Formula 2025 to 2026

The forum was informed about the key elements of the Schools National Funding Formula (NFF) for 2025-26, as published by the DfE. The total core schools budget has increased by £2.3bn to £63.9bn. Several grants, including the Teacher's Pay Additional Grant (TPAG), Teachers' Pension Employer Contribution Grant (TPECG), and the Central Schools Services Block (CSBG), will be rolled into the Schools NFF for 2025-26. The DfE anticipates further funding for increased employers' National Insurance contributions via a separate grant.

For the Schools NFF, factor values have been adjusted to incorporate these grants. The Minimum Funding Guarantee (MFG) for mainstream schools will be set between -0.5% and 0%. Structural changes to the NFF are minimal, with adjustments primarily affecting the PFI factor.

The high needs budget will see an increase of almost £1 billion, bringing the total to £11.9 billion, an increase of over 9%. Of this, £480 million will be allocated through a 2025-26 CSBG for special schools and alternative provision. The structure of the High Needs NFF will remain largely the same, with a funding floor of 7% per head and gains limited to 10% per head. The special schools' protection (MFG) will continue at 0% for maintained special schools and special academies.

The Central Schools Services Block (CSSB) will continue to fund local authorities for ongoing responsibilities and historic commitments. The formula for ongoing responsibilities, totalling £342 million, will be distributed through a per-pupil formula, with 90% based on a basic per-pupil factor and 10% on a deprivation factor.

Schools in Financial Difficulty and Quarter 2 Budget Monitoring

The forum received an update on the support offered to schools in financial difficulty and the initial findings from Quarter 2 budget monitoring returns. A dedicated role within the Schools Finance team has been established to support these schools, with a new officer recently appointed. Schools identified as at risk have been contacted and offered support from either the local authority officer or a DfE Schools Resource Management Advisor (SRMA).

Quarter 2 returns indicate a forecast reduction in revenue reserves across maintained schools by £6.545m, a decrease of 29%. Secondary schools show the largest percentage decrease in revenue reserves at 43%. The total forecast deficit for schools expecting negative reserves is £0.685m. The report also highlights that 30% of schools are forecasting to use more reserves in 2024-25 than they expect to have remaining, which could indicate financial difficulty if reserves are being used for day-to-day running costs.

Scheme for Financing Schools

The Redbridge Scheme for Financing Schools was updated in line with DfE guidance, with changes applied retrospectively from 1 April 2024. Key changes relate to the introduction of IFRS16 for local authorities, which classifies all leases as finance leases requiring Secretary of State consent. The DfE has provided blanket consent for common leasing activities, but other leases will require specific approval. Schools are advised to consult with the LA Finance team before entering into any leases. The forum approved these changes, and a process with timelines for lease approvals is being developed.

Other Updates

The forum also noted updates on the Dedicated Schools Grant (DSG) Outturn for 2023-24, which showed a reduction in the carry-forward to 2024-25. An update on SEND Capital projects was provided, detailing ongoing work to create additional space and capacity for pupils with SEND, including the transformation of Wanstead Youth Centre into an Alternative Education Hub. An update on De-delegation for 2024-25 was presented, outlining per-pupil rates for various services for maintained schools. Finally, the forum reviewed School Balances as at 31 March 2024, noting that maintained schools collectively held £24.148m in revenue balances and £1.237m in capital balances. A process for addressing schools with excessive balances is being developed.