Agenda item

The report of Marie Taylor (Head of Finance – Children and Education) seeks to present budget monitoring information against the Dedicated Schools Grant (DSG) for the financial year 2020/21 as at  31^st October 2020.

Marie Taylor (Head of Finance – Children and Education) referred to the budget monitoring report as at 31 October 2020 that was circulated with the Agenda.  Marie highlighted the following:

·       An overspend of £9.105 million was currently projected against the overall school’s budget.  The main driver of this was the ongoing pressures on the high needs block;

·       There was a small underspend of £0.166 million on the early years budget.  For the spring term, the Governments current guidance  is that settings would only be paid for children attending settings.  The local authority has a duty of sufficiency and has been working closely to support providers with grants as much as they are able to.  However, private income losses could not be supported in line with the terms of the grant funding.  Due to the uncertainty, no variance was being declared in year as the local authority want to support settings as much as they can.  The 19-20 adjustment based on the January 2020 census data was an increase of £0.539 million. In addition, the 20-21 allocation increased by £0.943 million. This reflected a higher count of children than the previous year;

·       The forecast underspend on the school’s budget related largely to the school’s growth fund which currently showed an underspend and would be helping to offset the overall pressure on the DSG;

·       The high needs budget was under significant pressures with the major driver of the increased costs being volume.   Whilst the number of EHCP’s being requested had slowed slightly (possibly due to the Covid restrictions in the summer term) the forecast demand would mean that there could be 4289 pupils with an EHCP by the end of March 2021 which would of course increase the high needs spend;

·       The DSG reserve brought forward of £11.35 million is increased by the positive early year’s adjustments.  The forecast overspend would take the reserve into a deficit position of £19.916 million.  The deficit is cash flowed by the local authority and is a major financial risk for the council.  By comparison at the end of the 2019/20 financial year the Council’s general reserves stood at £15.456 million;

·       The impact of Covid on the LA’s finances is significant, and this was raised at a meeting with representatives from the DfE today.  The additional Covid funding available for Councils and Schools for 2021/22 is not clear and the representative said that she would look into that for the LA; and

·       From 2018/19 the majority of LA’s had a deficit budget and there were updated rules governing deficits, with LA’s being required to produce a ‘DSG Management Plan’., This was not published with the Agenda as stated and would be shared with the Forum at the January 2021 meeting. 

An Early Years representative highlighted that in paragraph 15 of the report the reserve brought forward of £11.350 million was a deficit and Marie Taylor agreed to amend that in the report.

Resolved:

That Schools Forum note the budget monitoring position as at 31 October 2020 alongside the reports later on the agenda focussing on the high needs block recovery working group, the changes in DfE recovery planning requirements around the DSG deficit and the School Revenue Funding 2021/22.