Medium Term Financial Strategy (MTFS) 2025/26 - 2029/30
Appendix 2 - schools
Schools are funded through ring-fenced resources, mainly the Dedicated Schools Grant (DSG) and several other grants including the Pupil Premium Grant. Children's services funding is included within the core council funding known as the Settlement Funding Assessment.
The Government introduced different National Funding Formulas (NFF) for the 4 blocks of the DSG which have their factor values updated each year to take account of changes in data, additional grants being mainstreamed, or increased funding.
The Government sought views on the approach to completing reforms to the schools block NFF and how to transition to all mainstream schools' funding allocations being determined directly by the NFF. This has not yet been achieved, however Gateshead mainstream school funding formula "mirrors" the mainstream NFF.
On 31 March 2024 the overall reserves balances for all maintained schools in Gateshead totalled £7.49m, a decrease of £0.79m from March 2023. This position demonstrates that the overall position of schools is continuing to decline with the number of schools with deficits and projected deficits is increasing. The current cost pressures for utilities, food, and pay awards makes the position difficult to estimate going forward, together with the uncertainty of the delayed announcements for future DSG funding.
The Government have announced a Core Schools Budget Grant to cover the period from September 2024 to March 2025 to help schools with the cost of the teachers' pay and support staff pay awards. It is anticipated that this grant will be mainstreamed into the DSG for 2025/26, however, although the methodology for mainstream schools has been announced, the actual allocations for schools have not yet been announced.
To support with the pandemic impacts schools received additional grants such as Recovery Premium and National Tutoring Programme (NTP) funding aimed at helping children recover lost education resulting from the pandemic. Both the Recovery Premium and NTP funding will cease at the end of the 2023/24 academic year, and as yet no replacement funding has been announced.
It is also thought that the full impact of the pandemic and the current economic situation on pupil's characteristics has not fully materialised with increased numbers of pupils eligible for Free School Meals (FSM) which will impact on the funding to schools, and the cost to schools of providing a FSM. The percentage of FSM pupils in state funded schools has increased each year from 15.4% January 2019 to 24.6% January 2024. The cost of the provision of school meals has been heavily impacted by inflationary increases presenting a significant financial issue to both schools and meal providers.
The Supreme Court ruling on Harpur Trust V Brazel for part time, term time only workers will continue to have a financial impact on schools. Whilst schools have set aside a provision for future costs, the full consequences will not be known until the outcome of the consultation and further information is released by the Government.
The increase in the complex needs of children and the additional support schools are required to provide for their current and future pupil cohorts is an additional unfunded cost pressure for schools that is difficult to quantify and is an additional cost pressure for schools.
The number of Education Health and Care Plans (EHCP) 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.