Medium Term Financial Strategy (MTFS) 2024/25 - 2028/29
Appendix 2 - schools
Schools are funded through ring-fenced resources, mainly Dedicated Schools Grant (DSG) and several other grants including the Pupil Premium. Children's services funding is included within the core council funding known as the Settlement Funding Assessment.
The Government introduced a National Funding Formula (NFF) for mainstream schools from 2018/19, with some local discretion available within formula. Government have recently sought views on the approach to completing further reforms to the NFF and how to transition away most effectively from local formulae to all mainstream schools' funding allocations being determined directly by the NFF in the years ahead.
At 31 March 2023 the overall reserves balances for all maintained schools in Gateshead totalled £8.28m, a decrease of £0.67m from March 2022. This position demonstrates that overall position of schools is declining with the number of schools with projected deficits increasing. The current turbulent times and the additional cost pressures for utilities, food, and pay awards makes the position difficult to estimate going forward.
To support with the pandemic impacts schools are receiving additional grants such as Recovery Premium and National Tutoring Programme aimed at helping children recover lost education resulting from the pandemic. It is uncertain how long this funding will continue. The National Tutoring Programme funding is reducing and is at risk of claw back if schools do not spend it in line with the very specific conditions of grant.
The impact of future wage inflation is also not known with higher than expected pay offers for teachers and a flat rate offer for non-teaching staff. The Department of Education (DfE) provided an additional grant in 2023/24 for additional costs, but it is unclear if this will cover actual costs. The 2022/23 additional grant was mainstreamed into the DSG for 2023/24.
The impact of the Supreme Court ruling on Harpur Trust V Brazel for part time, term time only workers will also have a financial impact on schools. Whilst schools have set aside a provision for this, the full consequences are not yet fully known until the outcome of the Government consultation and further information is released.
It is also thought that the full impact of the pandemic and the current economic situation on pupil's characteristics is not fully known with increased numbers of pupils eligible for Free School Meals (FSM) which will impact on the funding to schools. The percentage of FSM pupils in state funded schools has increased each year from 15.4% January 2019 to 23.8% January 2023. The cost of the provision of school meals has been heavily impacted by inflationary increases presenting a significant financial issue.
The number of Education Health and Care Plan (EHCP) requests continues to increase, and even with the creation of additional special school and additionally resources mainstream school (ARMs) places, the waiting list for special school places and specialist provision continues to increase with demand outstripping supply.