The Kensington and Chelsea Schools Forum met to discuss Dedicated Schools Grant (DSG) funding, school balances, and recommendations from the High Needs Budget Review Group (HNBRG). The forum agreed to a top-up increase for Kensington Queensmill (OKQ) school, noted concerns about funding for St Charles' Sixth Form College, and agreed to the methodology for redistributing excessive school balances. They also agreed to options for consulting on the 2026/27 school funding formula.

Dedicated Schools Grant (DSG) Outturn and School Balances

The Schools Forum discussed the Dedicated Schools Grant (DSG) outturn and school balances as of 31 March 2025. The report before the forum (A5 DSG Out-turn and School Balances RBKC 2024-25.pdf) provided information on the year-end DSG balance and individual school balances, and made a recommendation on the methodology for allocating funds clawed back from schools with excessive balances at the end of 2025/26.

The forum heard that the DSG reserve balance had a £3.287 million deficit as of 31 March 2025, which was a reduction of £0.841 million from the £4.128 million deficit at 31 March 2024, due to in-year underspends.

Anita Stokes, Lead Strategic Finance Manager for Children's Services, explained that there had been an overspend of £260,000 on early years deprivation payments and Early Years Pupil Premium (EYPP) due to overpayments generated by the early years system. She said that the payments were being reviewed to identify the incorrect payments, which would need to be clawed back. Deprivation payments were currently on hold until the issue was resolved.

There was an underspend of £157,000 on school restructuring costs, which would be carried forward for use in 2025/26 and future years. There was also an underspend on admissions, which reflected a review of the bi-borough charges split.

There was an underspend of £913,000 in high needs, which reflected a planned £896,000 contribution to deficit recovery. There was a variance for top-ups (+\pounds226,000) reflecting an increase to address schools' concerns regarding the 2024/25 pay award. Other variances related to specialist support: SEN Outreach (+\pounds302,000) and Sensory Impairment and Language support (-\pounds562,000).

The forum also discussed school balances. The council's annual statement of accounts reported that the total of reserves held by schools was £4.861 million, a reduction of £0.219 million from £5.080 million at 31 March 2024. There were two schools with a deficit balance at the end of 2024/25, compared to five in the last quarter. One school that had a deficit at the end of 2024/25 had completed its deficit recovery plan and was now in surplus. Twelve schools, down from thirteen in 2023/24, had balances in excess of Department for Education (DfE) guidance. At the end of 2024/25, RBKC primary schools held an average balance of £124,954.

Following a request from primary headteachers, the forum reviewed the balance control mechanism (BCM). The agreed threshold for balances considered excessive was 20% for nursery, primary and special schools, and 12.5% for secondary schools. The forum also agreed to a £15,000 minimum threshold and 100% recovery and redistribution of excessive balances above the threshold.

The forum agreed that the redistribution of funds clawed back from schools with excessive balances at the end of 2025/26 would use the methodology agreed in January 2024, as schools with deficits receive financial support via all maintained schools having funds de-delegated¹ to cover restructuring costs for schools facing financial difficulty.

Recommendations from the High Needs Budget Review Group

The Schools Forum considered the recommendations from the High Needs Budget Review Group (HNBRG).

The forum agreed to increase the top-up funding for Ormiston Kensington Queensmill (OKQ), a special school for autism, to £32,700 with effect from July 2025. The HNBRG had identified that the school required an increase in top-up funding due to increased demand for places. The school had been working transparently with the council, identifying the necessary increase as £4,000 per pupil. Peter Bassett questioned whether any work had been done on comparative costs, and was assured that the costs were comparable with other provisions across London.

The forum noted with concern the difficulties facing St Charles' Sixth Form College. The college was experiencing a funding gap due to an increase in student numbers. Julie Ely, Assistant Director of Education, SEN and Admissions, explained that when a pupil is at sixth form and comes from another borough, the £6,000 funding moves from the other borough to Kensington, which can then be passed on to the provision. However, there is a lagged basis for the council receiving that £6,000, meaning that the college was out of pocket. The HNBRG had been advised that the DfE had declined exceptional funding and/or transfer from other authorities' DSGs for their residents.

The forum endorsed proposals for delivery of the Fairer Futures SEND Strategy 2025-2030. The strategy calls for additional resources from the high needs block, including providing each Special Educational Needs Co-ordinator (SENCO) with additional Educational Psychology support and extending the remit of specialist teacher practitioners to SEN Support.

The forum noted the outturn for 2024-25 and cumulative deficit, and the successful completion of grant-funded workstreams. They also noted the additional 2025/26 funding for the Core School Budget Grant (CSBG) for special schools, Alternative Provision (AP) and clinical providers, which was estimated to total £364,091. Finally, the forum noted the forward plan for the HNBRG.

School Funding Formula Options for Consultation

The Schools Forum discussed school funding formula options for consultation with primary and secondary headteacher groups for consideration by the Schools' Forum.

The forum agreed to consult on three options for moving towards the National Funding Formula (NFF) factor values for all factors, with the Minimum Funding Guarantee (MFG) at the maximum allowed of +0% per pupil, with Age Weighted Pupil Unit (AWPU) as the balancing figure:

• Move a further 10% towards the NFF factor values for all factors
• Move a further 15% towards the NFF factor values for all factors
• Move a further 20% towards the NFF factor values for all factors

Peter Bassett raised concerns about the potential impact of moving to the NFF, particularly the impact on schools with high levels of deprivation. He also questioned who the winners and losers were under the different options.

The forum noted the new Schools Budget Support Grant (SBSG) and agreed the principles for agreeing the schools funding formula for 2026/27 budgets. They also noted the next steps for agreeing the schools funding formula for 2026/27 budgets.

Early Years Funding

The Schools Forum considered a report on changes to early years funding, including local supplementary funding and the Early Years National Insurance Contributions and Teachers' Pay Grant (A8 Early Years Local Supplementary Funding and NI contribution and Teachers Pay Grant.pdf).

The forum noted the local supplementary funding and the Early Years National Insurance Contributions and Teachers' Pay Grant for 2025/26. The council will distribute the early years expansion grant as a flat rate per hour, and will passport 100% of the funding to early years providers. The Early Years National Insurance Contributions and Teachers' Pay Grant will be distributed in full to eligible early years settings based on the rate per part-time equivalent (PTE) per age cohort for the local authority.

Other Business

Craig Hanlon-Smith (North Kensington Centre at Morley College) was thanked for his contribution to the Schools Forum, as this was to be his last meeting.