Medium Term Financial Strategy (MTFS) 2022/23- 2026/27

Schools are funded through ring-fenced resources (Dedicated Schools Grant DSG and several other grants including the Pupil Premium) and 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 schools' funding allocations being determined directly by the NFF in the years ahead.

At 31 March 2021 the overall reserves balances for all maintained schools in Gateshead totalled £8.91m, an increase of £3.43m from March 2020. 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 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 income as a result of the pandemic. It is uncertain how long this funding will continue as allocations are usually single year allocations. The National Tutoring Programme funding risks claw back if schools do not spend it in line with the very specific conditions of grant.

The impact of future wage inflation and the impact of the increase in national insurance contributions is also not known. The DfE are considering that the 1.25% in national insurance contributions might be funded, however in the past the DfE have funded teachers pay and pension costs, but not those relating to non-teaching staff.

It is also thought that the full impact of the pandemic on both pupils and school employee's health has not yet reached a peak and this will have financial implications, manifesting itself in terms of increased staff absence, increased pupil absences and an increase in children being permanently excluded from school.

The number of education health and care plan (EHCP) requests continues to increase, and even with the creation of additional special school places at the new Gibside Special School, the waiting list of special school places and specialist provision continues to increase with demand outstripping supply.