The Ealing Schools Forum met to discuss school funding for the upcoming years. The forum agreed to implement a clawback mechanism for schools with excessive surplus balances, with the funds being used to support high needs pressures and potential school organisation changes. Members also reviewed and discussed the Dedicated Schools Grant (DSG) outturn for 2024-25, early years funding, and high needs funding pressures.

School Balances and Clawback Mechanism

The forum agreed to implement a clawback mechanism for schools with excessive surplus balances. This was option 1 of the proposals, and the resulting funds will be used to support high needs pressures and/or other potential pressures related to future school organisation changes. The balance control mechanism (BCM) will be the same as the previous year, considering only those schools with increasing excessive balances over a three-year period (two consecutive years, 2022-23 to 2024-25), potentially resulting in up to £20,000 clawback.

Maintained school balances provisionally totalled £13.09 million as of 31 March 2025, a decrease of £1.25 million from the previous year. Of the 75 Ealing maintained schools, 62 had a surplus, while 13 schools (17%) were in deficit, with deficits totalling £4.86 million, an increase from £3.03 million at the end of 2023-24.

According to the Ealing Scheme for Financing Schools 2025-26, reasonable levels of balances are considered to be up to 8% of budget for nursery, primary and special schools, and 5% of budget for high schools. The excess amount above those thresholds represented £4.53 million. 25 schools had excess balances at the end of 2024-25: one nursery school, 18 primary schools, four secondary schools and two special schools.

The report noted that the Balance Control Mechanism uses a three-year review period, so schools with significant excess balances that have reduced over one or both of the past two financial years would not be considered for clawback. There are four schools potentially in scope for a clawback on 2024-25 balances, none of whom experienced a clawback the previous year.

Dedicated Schools Grant (DSG) Outturn 2024-25

The forum reviewed the Dedicated Schools Grant (DSG) outturn for 2024-25. In 2024-25, the DSG overspent by £3.787 million before use of reserves. The high needs deficit increased by £5.528 million in 2024-25, from £2.227 million to £7.755 million, including a 0.5% (£1.651 million) transfer from the schools block to the high needs block. The net overall DSG deficit, after the use of reserves, is £5.641 million.

The in-year deficit on the schools block of £0.526 million resulted from pressure on the growth fund due to funding bulge classes in two primary schools in the Acton planning area and two secondary schools. The surplus on the early years block of £2.267 million resulted from unused contingencies and differences between estimated and actual take-up of entitlement and supplement funding.

The forum agreed to retain the DSG reserve underspend in the early years blocks to manage the high needs block deficit, enable additional early intervention and support, and manage commitments against the growth fund and other pressures related to future school organisation changes.

Dedicated Schools Grant (DSG) Funding Decisions for 2026-27

The local authority will formally consult schools in autumn 2025 on funding arrangements for the following financial year across all blocks of the DSG. The forum was asked to consider some key decisions in relation to the local formula for 2026-27.

Schools Block Funding Formula Factors

There are no significant changes to the National Funding Formula (NFF) factor rate values anticipated, other than those related to incorporating grant funding, and a possible small increase to formula factor rates to reflect other anticipated inflation and pay award pressures.

The Income Deprivation Affecting Children Index (IDACI), one of the deprivation factors used in the NFF, is due to be updated this year, which could lead to fewer children in London schools attracting the higher rates of IDACI deprivation funding.

Ealing's funding model continued to substantially mirror the NFF in 2025-26, with minor adjustments to the age weighted pupil units (AWPU) rates (-0.5%) and the FSM6¹, IDACI and prior attainment factors. Similar adjustments are anticipated for 2026-27.

Premises

Existing arrangements for the private finance initiative (PFI) premises factor are likely to remain in place for 2026-27 based on historic commitments plus inflation (RPIX²). Split sites funding was changed in 2024-25 to be allocated nationally on the basis of a formula factor and it is anticipated that this methodology will remain in place for 2026-27.

Growth and Falling Roll Funding

In 2019-20, pupil growth moved to a formulaic basis, with Ealing seeing a reduction in funding from £3.7 million to £1.41 million. In 2024-25, the government changed the growth fund methodology to be on the basis of both growth and falling rolls. Ealing's £1.41 million growth fund allocation in 2025-26 included a falling roll element due to secondary roll numbers in two areas of the borough reducing by more than 10% between October 2023 and October 2024.

Minimum Funding Guarantee (MFG)

All Ealing schools received protection to their per-pupil funding through a -0.5% MFG in 2025-26. Schools and the forum will be asked to consider the level of minimum funding guarantee for 2026-27.

Schools and Central Services Blocks

The forum is required to vote and approve a range of de-delegated and central budgets line by line at its meeting in either November 2025 or January 2026. The local authority is seeking feedback on whether the forum is minded to continue to fund these service budgets and any initial thoughts about funding allocations for education functions, de-delegation, and central schools block and retained duties.

Historic Commitments

The historic commitments grant allocation will reduce by a further 20% in 2025-26 from £0.383 million to £0.307 million, a reduction of £0.096 million. A similar 20% decrease in funding in 2026-27 would reduce this to £0.246 million, and the local authority will seek feedback on the approach to managing any reduction in the autumn funding consultation.

Early Years Block

Early years expansion capital funding has been allocated to successful projects, and 145 places for children aged two years and under will be created in the coming months. Take-up of the new working offer remains high, with 4,160 codes issued to families in Ealing.

The government have allocated £0.392 million to Ealing for the 2025 to 2026 financial year to support public sector early years settings with increased costs relating to the increased employer's National Insurance contributions (NIC) costs from April 2025 and 2025 teacher pay award for the period September 2025 to March 2026.

From the financial year 2026/2027, the Department for Education (DfE) will be moving to a new system of payment whereby funding for local authorities is paid according to termly headcounts submitted.

High Needs Block

The overall deficit in the high needs block after 2024-25 is £7.755 million. The local authority recommends the forum note the deficit on the High Needs Block and the DSG management plan outlined in the April report, and provide feedback on whether the forum is minded to continue the existing 0.5% transfer (£1.651 million in 2025-26) from the school's block to the High Needs Block in 2026-27 should this continue to be allowable under the funding arrangements.

Free School Meal Eligibility

In June 2025, the government announced the extension of means-tested free school meals (FSM) to all children in households in receipt of Universal Credit from September 2025. Existing transitional protections will continue until September 2026, to ensure no child drops out of eligibility and then becomes eligible in September 2026 under the new criteria.

Currently, just over a third of FSM eligible children in Ealing schools are only eligible as a result of transitional protection and would not meet the existing means-tested FSM eligibility criteria based on their current household circumstances.

The government have currently said that pupil premium funding will continue to be based on the existing free school meal threshold, indicating that schools will not receive pupil premium funding for children newly eligible under the new extended criteria.