Medium Term Financial Strategy (MTFS) 2023/24 - 2027/28
Schools
Schools are funded through ring-fenced resources (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 2022 the overall reserves balances for all maintained schools in Gateshead totalled £8.94m, an increase of £0.31m from March 2021. This increase was due to several factors many Covid related. This position masks that overall, the number of schools with projected deficits is increasing, but with the current turbulent times and the additional Covid and cost pressure related grants the position is difficult to estimate.
To support with the pandemic demands schools are currently getting 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 as allocations are usually single year allocations. The National Tutoring Programme funding 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 offer for teachers and a flat rate offer for non-teaching staff. The Department of Education (DfE) provided an additional grant in 2022/23 for additional costs including the increase in national insurance (NI) contributions. This funding has been mainstreamed into the DSG for 2023/24, however, the 22 September 2022 mini budget implications of the NI 1.25% reversal and the funding announcement for public bodies including schools for the increase in energy costs are not yet known. 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 been setting aside a provision for this possible outcome further detailed work will need to be undertaken to assess the impact on individual schools.
It is also thought that the full impact of the pandemic 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 22.5% January 2022. 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 places, the waiting list of special school places and specialist provision continues to increase with demand outstripping supply.