Medium Term Financial Strategy (MTFS) 2020/21 - 2024/25

Schools are funded through ring-fenced resources (Dedicated Schools Grant DSG and a number of 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.

The DSG is required to be spent directly on the education of children, with the vast majority of funding going into schools, based on an allocation mechanism agreed by Schools Forum, which has minority representation from the Council. Some schools funding is de-delegated from maintained schools and is centrally retained by the Local Authority with the approval of Schools Forum to fund services for schools, such as the Ethnic Minority and Traveller Achievement Service, and the Behaviour Support Service.

At 31 March 2019 the overall reserves balances for all maintained schools in Gateshead totalled £6.249m, an increase of £1.044m from March 2018. This increase was due to additional in year funding received from the DfE in December 2018.Six maintained schools had a deficit balance at 31 March 2019 totalling £0.456m. Due to the financial pressures facing schools over the coming years it is projected that school reserves will fall further, and more schools will be in a deficit position if there is no additional funding for schools.

At 31 March 2019 the DSG reserves in Gateshead totalled £0.816m, a decrease of £0.340m from March 2018. The decrease in reserves would have been higher but it was mitigated by £0.420m in year additional funding for the high needs block from the DfE. It is anticipated that the pressure on the high needs block will continue due to the increase in special school places, children with special educational needs (SEN) and permanently excluded pupils. DSG reserves were used to fund an in-year shortfall in the high needs block 2018/19 and it is anticipated that this will be required again to meet in year funding shortfalls despite additional funding of £0.420m for 2019/20 and school's forum agreeing to top slice the schools block by 0.05% (£0.551m) to fund pressures.

The Spending Review announced a further High Needs schools funding increase of over £700m to support children and young people with special educational needs. Other announcements include ensuring in 2020/21 that that per pupil funding for all schools can rise in line with inflation and the minimum per pupil amount for 2020/21 will increase to £5,000 for secondary schools and £3,750 for primary schools. It was also announced that pupil related factors in the national funding formula will increase by 4% and that all mainstream schools will receive at least a 1.8% increase in line with inflation. The outcome for Gateshead schools is still to be determined, but the highest proportion of the additional mainstream funding will be allocated to the South East and South West of England.