Agenda item

To consider the report.

Neil Goddard apologised for there not being a paper on what he was about to propose.  This was because proposals were still being considered in the period leading up to the Forum meeting.

All have agreed that there is insufficient funding in the HNB to meet the need. The ideal outcome would be to attract more funding and that is being pursued through various routes, however we have to assume that no more DSG will be allocated for high needs for 2019-20. 

There is cumulative deficit of around £4.5m which the new LA will inherit and hold at risk. The focus today is on the predicted in year deficit of £5.4m. There is a lot planned to get to that point but that is the current position having reviewed all budgets thoroughly. 

There are a number of options to deal with this annual deficit:

·                It could be left to grow to demonstrate to Government the difficulties we are under – this is not possible as the Council must be able to demonstrate a balanced budget, including the DSG for 2019/20 to comply with financial regulations.

·                The LA could look to balance it by making some extremely difficult decisions about the HNB but would prefer to work in partnership with this Forum to explore possible options for a potential transfer from the schools block to the HNB.

·                This Forum can approve a transfer of up to 0.5% of the schools block. Above this level, even with Forum support, approval must be sought from the Secretary of State.

·                The LA can choose to request a transfer above the level approved by the Forum by applying directly to the Secretary of State.

When the Formula Sub-Group of the Shadow Schools Forum met to consider how a transfer could be funded, it concluded that:

·                If a transfer was to be made, then this should impact as equitably as possible on all schools

·                A transfer of over 1.5% would not be achievable while maintaining this equitable impact.

The LA accepts both these principles and therefore if School’s Forum approves a transfer of at least 1.5%, it will not seek approval from the Secretary of State for a larger transfer.

A number of further points were made:

·                The High Needs report lists possible savings in the HNB to the level of 2.3m but these would be very difficult and unpalatable and could be counter productive if there are increases in Tribunal cases and costs.

·                Historically Elected Members have taken the view that the LA will not contribute to DSG funding. This has been ringfenced with the expectation that Schools Forum will balance that budget.

·                LAs have been hardest hit by austerity and pressures on demand led budgets so have had to make considerable savings across all services. However, there are a specific set of circumstances for us in 3 LAs coming together which have further impacted.

·                Lead members have been consulted regarding the current difficulties in balancing high needs and there is an opportunity under these circumstances to discuss the possibility of a one-off contribution from LA resources to assist schools. This cannot be committed to today as there will be a political process which must be followed but there is a high expectation that it would be agreed.

·                Obtaining Elected Members agreement at full Council will be easier if Forum can agree a 1.5% contribution before Members are approached. Working as a partnership on this issue will maximise the opportunity and will result in more money going into the school system rather than high needs budgets being cut further.

·                It was noted that from a wider Council perspective there is a perception that there are healthy reserves in schools so there will be some level of challenge to the proposal from members less familiar with school funding arrangements.

The Chair requested views and questions:

·                Concern expressed with respect to the term “one-off” as this was also used last year in agreeing a funding transfer. It was clarified that the one-off proviso related to the contribution being offered by the LA rather than to the transfer agreed by Schools Forum last year. The reference to the monies referred to as the one-off from last year had since been put back into the schools budget and therefore the high needs funding gap is without any level of transfer.

·                It was acknowledged that not all schools had healthy reserves and some level is needed as part of sound financial management. The issue was raised to emphasise that in these exceptional circumstance Lead Members are proposing to make a contribution to the HNB but this needs to be agreed in the budget-setting process in February by a wider group of Elected Members. 

·                Clarity was requested of exactly what the LA may be offering as the one-off contribution. Neil Goddard noted that the offer would be made in the spirit of sharing the problem but as stated earlier cannot be confirmed today until due process has been followed.

·                Query raised that if the Forum did not agree to the transfer to the HNB would that mean Members would then not be minded to consider the one-off LA contribution? It was noted that the conversation with Members will be difficult either way but it is felt this is the right time and circumstances to make the request. That conversation would be significantly weakened if Forum have not agreed the transfer as it would call the partnership into question.

·                The Chair queried if there are other groups in other areas making similar decisions ie Childrens or Adults Social Care. It was confirmed that there are other workstreams ongoing in those and other areas but these services are funded from within the LA total. The DSG is unique in requiring a partnership approach with schools.

·                It was queried if the Forum could agree a 1.5% transfer with it conditionally that the Council make the contribution being proposed? 

·                The history of schools working in partnership with the LA was acknowledged.

·                The Council’s contribution would come from revenue as a one off item in the Council’s Medium Term Financial Plan. Councillor Greene confirmed that raising Council tax had been considered but this is now capped by the Government so is not an option.

·                It was queried how we can be sure that the need for a transfer will not be repeated. It was stated that it is more about having a long-term strategy so we are better informed and have more certainty. Clearly, the high needs block is underfunded.

·                Timing of the Forum decision on the transfer was queried as this is new information and further conversations are necessary.

·                It was noted that the Transfer Report was good and very detailed however a 3 year plan would be dependent on Government giving an additional £5.4m each year. This point was supported and the need to continue lobbying to address the overriding problem acknowledged. However, actions are in place to address some of the issues but the impact is not immediate. The underlying issues are growing numbers of EHCPs and exclusions and more 19 – 25 year olds requiring support. If we can agree a way forward now this will give us time to develop a longer term solution.

·                It was noted that it was felt that schools had not been given enough time for the consultation and queried why the second consultation questions (results tabled) were not part of the first one. It was stated that this was because there had not been sufficient time to provide all of the information at once and a staged approach was needed. 

·                The Chair queried what decision was needed for today. It was stated that the sooner a decision regarding a transfer could be made the better as it would allow other conversations to progress with greater certainty. It would be helpful to establish whether Schools Forum could support some level of transfer with the amount to be determined in January. 

·                There had been a perception that from the start of the process the LA had been intent on a transfer of 1.5% and this amount has been repeatedly modelled. Could the LA consider other levels of transfer? It was stated that all Forum members had come representing their groups in saying no to any transfer but if colleagues could go back to their groups with a compromise the response may be more positive. Neil Goddard responded that the LA had not aimed at 1.5% but that this had come out from a range of considerations, it could possibly have been higher. The consultation had covered varying levels and it would be for Forum to make a decision on level. If we have a 3% shortfall 1.5% would share this out but that would be Forum’s decision.

·                The Chair queried what the LA would do if Forum opposed the transfer. It was noted that in the context of the new LA a balanced budget must be set so the shortfall has to be found somehow and this could impact on HNB.

·                It was queried that if we find a solution locally does that then undermine the message that the Government is simply not giving enough money to support the system. In response it was considered that cutting the budgets would mask the problem whereas finding funding for the need makes the shortfall completely transparent. 

·                It was considered impressive that this group of Headteachers has come together so quickly and put in a huge amount of effort to work together on this issue. They are aware of the pressure for the LA but these decisions will impact on every child in the area and hence it will be difficult for Forum members to go back to the groups to get a decision without a commitment to the LA contribution.

·                The Chair queried when the discussion with Members would take place. It was noted that the LA understands that timing has been difficult and it has taken time to get to this point. If LA officers can at least have an indication today then Lead Members will be able to progress their conversations. Council have a number of statutory responsibilities in a number of areas which they must fulfil.  It is not that they think children and young people are any less important but there are competing pressures.

·                Sean Preston noted for the record that he had not come to today’s meeting with a ‘no transfer’ remit from his group. However it was felt he was hearing that if Forum do not commit to the transfer then the LA contribution may not be forthcoming.

·                Cllr Greene noted an understanding that timing is very tight for Forum to make a decision but timing is very tight for BCP budgets. The BCP budget has to be published by 12 February so decisions need to be made very quickly.

·                It was noted that high needs providers would struggle if the option to reduce their funding was implemented.

·                The Chair requested any queries regarding the table report (item 7 appendix).  It was noted that it was not representative due to the low number of responses collated and the timescale for a response should be increased.

·                Forum were asked if they could agree in principle some sort of transfer to enable a better case to be presented to Councillors for their consideration.

a)        In principle do Forum agree ‘some transfer,’ amount subject to further discussion.

In principle – ‘No transfer’

Votes: For – 5, Against – 6, Abstentions – 11

In principle – There could be a transfer (no conditions to be set today and once LA position has been established)

Votes: For – 18, Abstentions – 4

AGEED BY MAJORITY – Level subject to further consideration