Appendix 1

Borough of Poole

MAINSTREAM SCHOOL FUNDING FORMULA

2015/16CONSULTATION

Issue date: 19 September 2014

Closing date: 5 October 2014

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CONTENTS

1 Introduction 5

2 School Block Funding for Poole 2015/16 6

3 LMS Formula Review 2015/16 7

4 Allocation of Funding Between Primary and Secondary Factors 8

5 Review of Factors and Data Options 9

6 General Options for Updating the LMS Formula Unit Values 13

7 Proposals for Unit Values 14

8 Limiting Gains & Affordability 19

9 Financial Impact of proposals 20

10 Next Steps 21

Appendix 1: Formula Factors for 2015/16 22

Appendix 2: Proposed Unit Values 25

Appendix 3: Indicative Financial Impact of Proposals for Schools 26

Appendix 4: Summary of Consultation Questions 27

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1 IntroductionThis document contains proposals for the Local Management of Schools (LMS) funding formula for mainstream schools in 2015/16. This formula will be effective for maintained schools from April 2015 and for academies from September 2015.

The Dedicated Schools Grant (DSG) provides the funding for the LMS formula. The DSG is provided to the Local Authority (LA) through three funding blocks – Schools, Early Years and High Needs, with expenditure not ring-fenced between blocks. The government consulted over spring 2014 on the method to distribute additional funding for 2015/16 through the Schools Block to benefit the least fairly funded LAs. The proposals indicated that Poole would receive an increase in funding of £2.3 million.

In July it was confirmed that the approach detailed in the consultation had been adopted, with LAs to be provided with a minimum funding level based on the actual characteristics of pupils and schools in the local area. These characteristics are drawn from those permitted within the LMS formula. Those LAs already funded above the minimum are to see no increase. This is the first step towards a national funding formula for the Schools Block allocation of the DSG.

Also announced in July was that the funding available for distribution had increased nationally with Poole’s total increase compared with 2014/15 being estimated now at £3.2 million (based on pupil numbers from the October 13 census) representing a 4.7% increase. This is clearly very good news and it will improve the longer term financial outlook for all mainstream schools in Poole.

In considering the impact for individual schools, it should be remembered that the national funding reforms from April 2013 and the change in the age of transfer in Poole from September 2013 fundamentally changed formula allocations between schools for the longer term. The Minimum Funding Guarantee (MFG) provides a significant level of allocations above the local formula as a result of these changes. Relatively high MFG allocations as a proportion of the overall LMS budget for a school in 2014/15 means that the school’s funding has already made greater progress than other schools towards the uplifted unit values proposed for 2015/16.

The funding Settlement for 2015/16 for the Schools Block will be finalised in December along with the High Needs Block and provisional allocations for Early Years. The DfE will also provide the final data for the LMS formula around this time to enable final budgets to be calculated and overall affordability of the unit values in the draft formula to be considered.

There are no proposals in this document for nursery provision funded by the Early Years Block of the DSG. The DfE have not increased unit funding values for this age group in 2015/16. The three schools with nursery provision will receive consultation proposals for the Early Years Single Funding Formula (EYSFF) later in the autumn.

This document has been distributed to all Headteachers and Chairs of Governors in mainstream schools and academies in Poole. The outcome of the consultation will be presented to Schools Forum on 15 October in time to complete the first draft of the formula to meet the Education Funding Agency (EFA) deadline of 31 October.

It remains the responsibility of the LA to make final decisions on the LMS formula and EYSFF, with Elected Members scheduled to consider final proposals through the Council‘s Children’s Services Overview and Scrutiny Committee in December.

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2 Schools Block Funding for Poole 2015/16 Funding for the Schools Block is provided as an amount per pupil multiplied by numbers on roll in mainstream schools at the October census. The unit funding level for 2015/16 has been updated to a minimum funding level calculated by the DfE using October 2013 census data for a range of pupil and school characteristics. The unit funding level is now fixed but updated pupil numbers from the October 2014 school census will be used in the final funding Settlement in December.

Table 1 below provides the DfE calculation for Poole

Table 1 – Unit Funding Calculation for Poole 2015/16

Factor UnitValue Data Funding

Basic Entitlement – Primary 2,880.41 9,985 28,760,850Basic Entitlement – KS3 3,949.51 3,941 15,565,011Basic Entitlement – KS4 4,501.80 3,121 14,050,114Deprivation - Ever 6 Primary 882.39 2,020 1,782,288Deprivation – Ever 6 Secondary 1051.70 1,224 1,287,680Deprivation by IDACI Band 1 – Primary 209.14 991 207,169Deprivation by IDACI Band 2 – Primary 260.19 1,425 370,747Deprivation by IDACI Band 3 – Primary 346.79 1,051 364,391Deprivation by IDACI Band 4 – Primary 421.67 362 152,542Deprivation by IDACI Band 5 – Primary 476.84 399 190,421Deprivation by IDACI Band 6 – Primary 691.15 0 0Deprivation by IDACI Band 1 – Secondary 289.06 637 184,267Deprivation by IDACI Band 2 – Secondary 378.88 825 312,566Deprivation by IDACI Band 3 – Secondary 470.32 512 240,949Deprivation by IDACI Band 4 – Secondary 554.08 235 130,231Deprivation by IDACI Band 5 – Secondary 614.08 223 136,961Deprivation by IDACI Band 6 – Secondary 818.79 0 0Looked after children 1003.80 96 95,970Low Prior Attainment – Primary ( below 78) 669.38 2,386 1,597,028Low Prior Attainment – Secondary 940.07 1,623 1,525,774EAL – Primary (3 years) 465.70 480 223,544EAL – Secondary (3 years) 1129.85 61 69,228Lump Sum - Primary 115,797.02 27 3,126,520Lump Sum - Secondary 125,155.40 8 1,001,243Lump Sum - Middle Calculated 1 120,476Funding Total 71,495,958Pupil Numbers 17,047Schools Block Unit of Funding 4,194.05

The DfE national unit funding calculation also includes a sparsity measure for rural schools, with an uplift applied to the overall total for higher cost areas. Poole has not qualified for sparsity or the area cost uplift as expected.

Unit values for the Basic Entitlements have been set at the national average of those used in LA LMS formulae in 2014/15.

Unit values for other factors have been set by scaling back equally the national averages for affordability.

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There is no national expectation that the local formula will mirror this allocation approach or that the unit values in Table 1 will be used. The unit values above would not in any case be affordable in full for all individual factors since the funding has to provide for other LMS formula elements (business rates and exceptional premises allocations) as well as central budgets in the Schools Block. Also, an element of funding has been transferred to the High Needs Block over the last two years to fund an increase in provision for pupils with high needs.

3 LMS Formula Review for 2015/16The main purpose of the LMS formula review is to consider how to allocate the additional funding to schools with a view to the national and local context.

The underlying principle in the proposals contained within this document is that we should make progress towards national consistency unless there is a compelling reason not to do so. The DfE have made it clear that over time they will be moving towards a national formula to allocate funding to all LAs. This is likely to continue to make significant reference to how LAs overall provide funding to schools. This principle therefore prepares Poole schools for this direction of travel.

A clear link between a national formula to fund LAs and a local formula to fund schools would make it easier over time to update unit values to reflect changing government policy. The significant increase in funding for 2015/16 provides the opportunity to make faster progress towards typical national funding levels and avoid creating turbulence for Poole schools.

Schools will be aware that the LMS formula is unable to share the additional funding equally. It is important to note that the MFG allocations in school budgets reflect the higher level of historic allocations per pupil, and this will have an impact on the size of the change to individual school budgets in 2015/16.

Schools with significant MFG allocations in 2014/15 will inevitably be disappointed that despite the proposed increase in unit values, the formula will provide either only a small increase in funding compared with 2014/15 or a further reduction (limited to 1.5% by the MFG). However, this is within the context that they have been historically funded at a higher level than other schools in Poole.

The national funding reforms from April 2013 and the change in the age of transfer in Poole from September 2013 fundamentally changed formula allocations between schools for the longer term. The MFG has built in significant protection for a number of schools, particularly those now providing for lower age groups than previously. Although the increase in unit values will have a limited benefit in cash terms in 2015/16 for schools remaining supported by the MFG, it will provide a much improved financial outlook for the longer term for all Poole schools.

There are many variations that could be considered to update the LMS formula but nationally we have moved away from an activity-led model and a formulaic approach is proposed for simplicity, transparency and fairness.

The process to update the formula was undertaken in three stages:

Determine the allocation of funding between phases Review factors and data options in the current formula and consider the need

to make changes. Develop a methodology to update unit values

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As part of this consultation, views are being sought on the proposed outcome from each step.

All proposals have been drawn up using data from 2014/15 to set unit values. This is to enable a direct comparison to be made with the current unit values and formula allocations across schools. This means that unit values may need to be updated should there be a significant change in the pupil data for 2015/16 when released by the EFA in December. Proposals, therefore, include how the formula should be updated in considering overall affordability later in the process.

The overall financial impact for individual schools will change from that estimated in this document when the data is updated in December, particularly where there is a change in pupil numbers, and schools should bear this in mind when estimating final funding for 2015/16.

4 Allocation of Funding Between Primary and Secondary Factors The first step is to establish an appropriate method to allocate the quantum of funding between phases.

It is proposed to allocate funding according to the formula deriving the unit value for Poole in Table 1 (DfE formula). How the formula is updated for each phase can then be considered independently.

The funding not available for the LMS formula from the Schools Block allocation is to be deducted from the total before the calculation of the phase apportionment. This means that no central budget items have been treated as phase specific.

The following central school budgets for schools are funded through the Schools Block funding in Table 1.

DfE Licenses Carbon Reduction Commitment (CRC) Schools Forum School Admissions Pupil Growth Fund

Licenses and the CRC are charges made by the DfE directly based on pupil numbers (some licenses also by age) annually. The Schools Forum and Schools Admissions budgets have not been permitted to increase since 2012/13 and this applies again for 2015/16. The pupil growth budget is to fund schools where places have been created to meet basic need from September and is assessed annually. Currently, these places are in the primary phase but the budget will be needed in the secondary phase in due course.

It is not planned to realign the funding proportions to each phase when the final data for 2015/16 has been received and budgets recalculated. The Schools Block unit of funding will not be updated for any shift in data at December. The calculation would, however, need to be reviewed each year to reflect the latest data trends.

1. Do you agree that Poole should allocate funding between Primary and Secondary factors in the same proportion as the DfE funding to the LA? Yes No Not SureIf no or not sure please provide reasons:

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5 Review of Factors and Data Options

5.1 General approachThe second step in the review has been to compare the use of factors and data in the Poole formula with those in the DfE formula in Table 1.

Appendix 1 provides a short summary of the possible factors for the LMS formula in 2015/16, the EFA requirements for each and the options for any local variation in the use of data. Also detailed is the use of factors and data options in the DfE formula and the comparison with Poole’s current formula.

The Poole formula was developed for 2013/14 following extensive engagement and consultation with schools and where the factor and data options are used in the same way as the DfE in the unit funding calculation it has not been considered further for change. Where a factor or data has been used differently in Poole’s formula the reason has been examined.

Schools are being asked to comment on whether the Poole approach should be changed to agree to the DfE method as a principle or to remain as used in the Poole formula if there is a clear reason for the difference. These differences are considered in the next section.

2. Do you agree that Poole should use data in the LMS formula in the same way as the DfE allocate funding to the LA unless there is a clear reason not to do so?

Yes No Not Sure

If no or not sure please provide reasons:

5.2 Consideration of differences between the DfE funding formula for the LA and Poole formula to fund schools

The summary of the formula factors in Appendix A shows that the differences between the DfE methodology to fund LAs and the Poole formula are few. The approaches differ only in the Poole use of the option to scale the new early years data to be comparable with the previous measure in the Primary Prior Attainment factor and in the choice of EAL data.

The local differences with the DfE formula are considered to be appropriate for the circumstances of Poole schools and no proposals are being brought forward to change the formula methodology. The rationale is set out below.

5.2.1 Primary Prior Attainment Data ScalingAt national and local level, the EYFSP measure introduced in 2013 identifies significantly more pupils as not making good progress than previously. In Poole 51% were identified in July 2013 using the new measure compared with 16% from the old measure. The option to allow the data under the new measure for year 1 to be scaled down to the same level as the previous EYFSP measure was a late adjustment for 2014/15 permitted by the EFA following publication of the data sets in December last year.

The new measure identifies pupils in years 1 and 2 in 2015/16, with the previous measure identifying pupils in years 3 to 6. Year R pupils will adopt the average for

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the school as a whole. The EYFSP is used to identify pupils for funding across all primary age groups with only a single unit value possible.

The data in Table 2 below summarises the estimated data for the EYFSP at the October 2014 census as the % of pupils not making a good level of progress. The data for year 1 at the October 14 census has been estimated using draft scores from summer 2014 year R assessments.

Table 2 – Primary EYFSP Estimated Data – October 2014

ESTIMATED % EYFSP DATA FOR 15/16

FORMULA

July 14New Year

1

July 13 NewYear

2

July 13Old

Years3-6

Change Year 2 to

Year 1

Infant Schools 40% 55% - -15%First Schools 32% 41% 5% -9%Primary Schools 40% 49% 20% -9%Junior Schools - - 17% -Middle School - - 9% -All Primary Phase 39% 51% 16% -12%

The draft July 2014 data for pupils moving into year 1 in September shows 39% have been assessed as not achieving a good level of progress. This will add to the new measure data of 51% from July 2013. The option in 2015/16 is to scale back years 1 and 2 data equally to maintain consistency with years 3 to 6 (estimated currently to remain at 16%).

Given the different age ranges within schools in the primary phase in Poole the option was taken up for 2014/15 to ensure schools with older primary pupils were not disadvantaged by the change in measure.

The use of unadjusted data for years 1 and 2 would provide significant inconsistencies between year groups in the number of pupils identified. This will remain the case until all years are measured in the same way, which may never actually occur as changes are likely over a six year period. Already between July 2013 and July 2014 the proportion identified by the new data has reduced significantly from 51% to 39%, a 12% reduction in the number of pupils considered to not be making good progress.

The data was moderated across all Poole schools in both 2013 and 2014. In 2013, the proportion of pupils identified in Poole under the new measure was high at 51% compared nationally. In 2014, most schools are now identifying significantly fewer pupils and 39% is more in line with the original pilots and national data last year. Data for only a small number of schools shows the opposite trend and their data in the main is now more comparable with other Poole schools.

In Poole in 2014/15 we scaled back the new data to identify the same proportion of pupils as the old measure. The actual scaling factor to apply in 2015/16 will depend on the % identified according to the new and old measures in the final data from DfE in December. In 2014/15 the scaling factor was 31%.

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The new measure data was adjusted in 2014/15 using the data in Table 2 as follows:

New measure proportion overall (51%)

Multiplied by scaling (31% - a calculated figure)

Equal to Old Measure Proportions overall (16%)

Data measured by the New EYFSP (year 1) for each school was multiplied by 31%.

If the flexibility is used, the new measure EYFSP data must be scaled back equally across schools (but cannot be scaled to a lower proportion of children than the previous measure provides for years 3 to 6). The distribution of eligible pupils between schools for the two year groups, therefore, will still reflect the new measure and will remain different from older year groups.

The distribution of funding through the factor will change between schools progressively over time as more year groups are brought within the scope of the new measure.

It is recommended that the option to scale back the data is used again in Poole’s formula for 2015/16 to maintain consistency between schools with different age ranges.

The different local approach with the national formula is considered reasonable as at national level all LAs have primary pupils across all age ranges R to 6 with the DfE not needing to apply scaling to achieve consistency in allocations between LAs.

3. Do you agree the EYFSP data for years 1 and 2 should continue to be scaled back to the level of the previous measure to ensure data consistency between primary phase schools with different age ranges?Yes No Not SureIf no please provide reasons and indicate your preferred alternative:1. New EYFSP data not scaled back or2. New EYFSP data scaled back less because the trend in pupils not making good progress is upwards, with pupils in years 3 - 6 more able at the end of year R compared with the current years 1 and 2. Please suggest how this could be evidenced.

5.2.2 EAL Data EAL data in both phases identifies pupils according to the time since entry to the UK education system but excluding time in year R. The time periods of entry are within one year (EAL1), two years (EAL 2) or 3 years (EAL 3). Separate unit values are possible for each phase but to keep the formula as simple as possible, there would need to be compelling reasons for a difference.

The DfE formula uses data for EAL 3, with the Poole formula using data for EAL 2

EAL 2 data was preferred for each phase from the detailed consultation with schools at the start of funding reform and the introduction of the new formula for 2013/14. It was considered that this provides the correct balance to tackle the specific issues of this group. The data to identify EAL pupils for the first year only was not considered a sufficient time period for additional needs to have been reduced. This was felt to be the case across phases as much of the first year could be taken up on social aspects

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as well as potential remedial education with a longer period necessary to make an impact with extra funding. By year 3, the extra support already provided should have significantly reduced or eliminated this specific disadvantage.

In addition, the use of data over 3 years disadvantages infant schools as the number of pupils cannot increase after 2 years as year R is outside the period for data capture. The table below summarises the October 13 data to illustrate the disadvantage of using EAL 3 data in a local formula in the primary phase.

Table 3 - EAL Data October 2013

PHASE EAL 1 EAL 2 EAL 3

Infant Schools 89 156 156First Schools 5 7 12Primary Schools 96 162 228Junior Schools 18 29 84All Primary Phase 208 355 480Secondary Schools 17 37 61Total Schools 225 392 541

The above table demonstrates that the number of identified pupils in infant schools is maximised after 2 years, with the use of EAL 3 being a detriment to this phase of schools.

Use of the data within other LAs is mixed and the choice will determine the unit funding level with EAL 1 potentially requiring the highest level with EAL 3 the lowest. A change in measure would provide some redistribution between schools but the factor accounts for less than 1% of the total funding.

At national level the data is consistent between LAs regardless of data option.

4a. Primary Phase: Do you agree that the use of EAL 2 data continues to be more appropriate than EAL 3 to provide consistency between schools in the primary phase? Yes No Not SureIf No: Should we instead use: EAL 1 or EAL 3 If you do not agree EAL 2 is the best approach in the primary phase, please provide the reasons for your choice. 4b. Secondary Phase: Do you agree we should continue to use EAL 2 in the secondary phase? Yes No Not SureIf No: Should we instead use: EAL 1 or EAL 3 If you do not agree EAL 2 is the best approach in the secondary phase, please provide the reasons for your choice.

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6 General Options for Updating the LMS Formula Unit ValuesTwo general options have been considered to make progress towards national consistency. Given the local differences in the use of data for the two factors noted above, the national unit values have been adjusted where relevant to ensure consistency when making comparisons with the Poole formula.

6.1 Option 1–Individual factor approach - uplift as affordable within a phase the unit values below the DfE level with other unit values to remain at 2014/15

Option 1 is the proposed method to update unit values in the LMS formula. Each 2014/15 unit value has been compared with those used in the national formula and how it should be updated considered in the local context.

The proposed method has the following features:

1. The Poole formula should move unit values towards the DfE values to fund the LA. This means: No unit value should increase above the current DfE level. Unit values currently above the DfE level to remain the same. Unit values below the DfE level to be uplifted to the DfE level as affordable.

2. Deprivation and Prior Attainment factors to be considered as one quantum of funding as LAs have adopted a range of different approaches across the three factors and averages for each may not be directly comparable.

3. The unit values other than the Basic Entitlement to be uplifted to the DfE level.4. The Basic Entitlement to be uplifted as affordable.

6.2 Option 2 - Replicate the DfE methodology with unit values scaled down equally within a phase

An alternative to an individual factor approach is for school budgets to be prepared using the same unit values as the DfE use to provide funding to the LA, as adjusted for the different use of data and scaled down equally within a phase for affordability.

The benefit of this approach is simplicity but it may not move the local LMS formula towards national consistency in all aspects as expected and may not reflect local differences that are appropriate.

The national average unit values are very likely to increase for 2015/16 from the increase in DSG funding. Reducing unit values that are currently above the DfE level could instead move the local formula away from national consistency and create turbulence for a number of schools that should have been avoided.

5a. As a matter of principle, which option do you prefer to make progress towards national consistency?Option 1 Option 2 Not SurePlease provide the reasons for your choice of option:

5b. If option 1 is taken forward, do you agree with the general approach to update unit values?Yes No Not Sure If no, please indicate which elements of the approach you do not agree.

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7 Proposals for Unit Values

7.1 SummaryThere are many potential options to update unit values and individual schools will of course prefer the largest increase in unit values in factors where they can expect their data to be high relative to other Poole schools.

Given Poole’s historic low funding position compared nationally, we would expect Poole unit values to be below national averages generally. However, this is not the case across the board with the local formula providing relatively high allocations in a number of factors.

In the Primary phase Poole unit values are higher than the DfE formula in the following factors and no uplift is proposed for 2015/16.

Higher level IDACI bands (more deprived post codes) Prior Attainment EAL

In the secondary phase, with the exception of IDACI band 5, all unit values are currently below the DfE formula values. The Basic Entitlement for KS 4 is however close to the national average with no uplift proposed as the factor should also contribute to budgets not included within the DfE formula.

The table below summarises the proposals to change unit values according to the methodology proposed in 6.1 above.

Table 4 - Summary of Proposed Unit Value Changes Unit Value Change Primary SecondaryReduce Unit Value(exception to the rule as no allocations in current budgets)

IDACI Band 6 None

Uplift unit value above 2014/15 level towards DfE level.

Basic Entitlement (13.5%)

FSM 6 (14%)

Basic Entitlement KS3 (17%)

FSM 6 (42%)Uplift unit value to DfE level

Lump Sum (7%) LAC (9%) IDACI Bands 1 & 2

Lump Sum (16%) LAC (9%) EAL (8.5%) IDACI Bands except 5

(main increase in lower bands)

Low Prior Attainment (36%)

No uplift Low Prior Attainment (already 2% above)

EAL (already 53% above)

IDACI bands 3 to 5 (7% to 30% above)

Basic Entitlement KS4 IDACI Band 5 (9%

above)

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7.2 Basic Entitlement The Basic Entitlement in the proposed methodology to update unit values is the balancing factor. That is, progress is to be made towards the national averages as far as affordable.

The approach in the DfE formula was to uplift the Basic Entitlement to the national average with other factors scaled back equally according to the available funding. This approach has not been replicated locally as this would compound the shortfall against national averages for other factors.

In addition, other budget allocations to be met from the quantum of funding have a greater link with numbers on roll than pupil characteristics (business rates being the most significant requiring funding of approximately £1 million).

A comparison with the DfE levels for the Basic Entitlements across phases for the current proposal is as follows:

Table 5 - Summary of Proposed Basic Entitlement Unit Values

Basic EntitlementsUnit Values

DfEFormula

£

Poole14/15

£

Proposed 15/16

£

Proposed15/16Uplift

ProgressTowards

DfE FormulaPrimary 2,880 2,371 2,690 13.5% 93.41%Secondary – KS3 3,949 3,223 3,774 17.0% 95.55%Secondary – KS4 4,502 4,307 4,307 0% 95.68%

The slower progress for the primary phase is partly due to the proposals for a number of unit values to remain above the DfE formula in 2015/16. It also reflects that business rates represent a higher proportion of overall costs compared with the secondary phase.

The progress already in 2014/15 towards the national average for the KS4 unit value reflects the relatively high level historically compared with other local factors as no uplift is proposed for 2015/16.

7.3 Prior Attainment and DeprivationInstead of considering each element independently, Prior Attainment and Deprivation factors have been considered in total to allocate the same quantum of funding across the 3 factors as the DfE formula. LAs will have adopted a range of approaches between the factors and simply adopting averages may not be meaningful in the local context.

PrimaryTable 6 - Summary of Primary Funding for Prior Attainment and Deprivation

Factors

DfE UnitValue

£

DfE Funding

£

Poole 14/15

Unit Value£

Poole 14/15

Funding£

Proposal15/16

Prior Attainment 1,004 1,597,028 1,029 1,636,881 No upliftDeprivation– IDACI Table 7 1,285,270 Table 7 1,298,194 Table 7Deprivation–FSM 6 882 1,782,288 708 1,434,909 Uplift %Total 4,664,586 4,369,984

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Low Prior Attainment Data has been adjusted for local data scaling so the unit value will not agree with the value in Table 1. No uplift in the unit value is proposed as the 2014/15 level for Poole is higher than the DfE formula.

Deprivation - IDACI BandsOnly pupils from areas assessed as having some level of deprivation receive funding through IDACI bands, with 58% of primary pupils in Poole assessed as living in relatively affluent areas not included within the IDACI factor.

In the Primary phase, Poole has concentrated more funding towards areas of significant deprivation through the IDACI postcode bandings in contrast to the national picture where lower levels of deprivation have attracted a greater proportion of the funding. This may be a reflection that in Poole we have a more polarised distribution of deprivation than is typical. It is not considered appropriate, therefore, to simply adopt DfE unit values for each band as that will reduce deprivation funding to schools with a significant level of deprivation and reallocate it to schools with pupils from less deprived postcodes.

Table 7 – Primary IDACI Unit Values

IDACIBands

DfE FormulaUnit Values

Poole 2014/15Unit Values Variance Proposal

£ Increase £ Increase £

1 209 - 124 - -85 Uplift to DfE2 260 24% 248 100% -12 Uplift to DfE3 347 33% 371 50% 24 No uplift4 422 22% 495 33% 73 No Uplift5 477 13% 619 25% 142 No Uplift6 691 45% 743 20% 52 Reduce to DfE

The DfE method provides for higher unit values in the lower bands 1-2 but lower unit values in bands 3-6, meaning Poole has provided more funding to areas of significant deprivation. Bands 1 & 2 account for 57% of pupils from deprived postcodes, with bands 3- 5 the remaining 43%. There were no Poole pupils in band 6 in 2014/15 (or 2013/14). The proposal for updating unit values is included above in Table 7. As no pupils have yet been funded at band 6, it is proposed to reduce the unit funding to the level of the DfE as the one exception to the general principle of not reducing any unit values.

Deprivation - FSM Ever 6 The proposal is to uplift the unit value of FSM Ever 6 to provide the balance of funding to equalise Poole funding to the DfE level across the 3 funding elements. This equates to a 14% increase.

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SecondaryTable 8 - Summary of Secondary Funding for Prior Attainment and Deprivation

DfEUnit

Value £

DfE Funding

£

Poole14/15

Unit Value £

Poole14/15

Funding£

Proposal15/16

Prior Attainment 940 1,287,680 694 1,125,965 Uplift to DfEDeprivation– IDACI Table 9 1,004,964 Table 9 787,227 Table 9Deprivation–FSM 6 1,052 1,525,774 734 898,913 Uplift %Total 3,818,418 2,812,105

Low Prior Attainment The DfE funding value is significantly above the Poole level and the proposal is to uplift the Poole unit value by 35.5% to this level.

Deprivation - IDACI BandsDeprivation levels in the secondary phase are lower overall than primary with 66% of pupils not living in deprived postcodes falling within the IDACI bands. This is due to Corfe Hills and the Grammar Schools drawing in pupils from relatively affluent areas bordering Poole. Pupils from post codes of significant deprivation are concentrated in the main in only two schools.

Table 9 – Secondary IDACI Unit Values

IDACIBands

DfE FormulaUnit Values

Poole 2014-15Unit Values Variance Proposal

£ Increase £ Increase £1 289 - 134 - -155 Uplift to DfE2 379 31% 268 100% -111 Uplift to DfE3 470 24% 402 50% -68 Uplift to DfE4 554 18% 536 33% -18 Uplift to DfE5 614 11% 669 25% 55 No uplift6 819 33% 804 20% -15 Uplift

In Poole and nationally, unit values in the secondary phase are higher than primary for each band but the DfE uses higher unit values for all bands except band 5, where Poole values catch up due to the faster acceleration of funding with the progressive increase in deprivation. Bands 1-4 account for 91% of pupils from areas of deprivation. The remaining 9% were all in band 5.

Deprivation - FSM Ever 6 The proposal is to uplift the unit value of FSM 6 to provide the balance of funding to equalise Poole funding to the DfE level across the 3 funding elements. This equates to a 42% increase.

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7.4 Other Factors The proposed methodology applied to other factors is straight forward and is summarised in Table 10 below.

Table 10 - Unit Values for Other factors

Primary

FactorsDfE

Formula£

Poole14/15

£

Proposed 15/16

£

Proposed15/16Uplift

Progress towards DfE

FormulaEAL 629 959 959 0% 53% aboveLAC 1,004 918 1,004 9% at 100%Lump Sum 115,797 108,164 115,797 7% at 100%

Secondary

FactorsDfE

Formula£

Poole14/15

£

Proposed 15/16

£

Proposed15/16Uplift

Progress towards DfE

FormulaEAL 1,864 1,717 1,864 8.5% at 100%LAC 1,004 918 1,004 9% at 100%Lump Sum - Sec 125,155 108,164 125,155 16% at 100%Lump Sum - Middle 120,476 108,164 120,476 11% at 100%Exceptional Factors Not applicable 101,017 101,017 0% Not applicable

Adopting a differentiated lump sum between phases requires that the Middle School lump sum is calculated to reflect the relative pupil numbers in each phase. Therefore, the final value will reflect the actual data from the October 2014 census.

There are currently no proposals to change the values of the exceptional premises related factors for the joint use of sports facilities at St Aldhelm’s and Magna academies as charges have not yet been agreed. Changes may be proposed in finalising the formula in December.

7.5 Consultation on Proposed Unit ValuesAn overview of the unit values proposed for 2015/16 is included at Appendix 2. This includes a comparison with the 2014/15 levels and the progress made towards the DfE formula (data adjusted and scaled) for the LA.

6. Do you agree with the unit values proposed? Yes No Not Sure

If no, which unit values should be different from those proposed and why?

17

Appendix 1

8 Limiting Gains & Affordability

8.1 MFG and CappingThe level of the MFG is set by the DfE at minus 1.5% and funding allocations above the proposed formula level will still be required to protect a small number of schools from funding turbulence.

To limit gains and manage overall funding affordability, a cap on increases is proposed at 10% per pupil. The proposed increase in unit values and a cap of 10% will mean two school allocations, one in each phase, would be capped with the current data. Three further school allocations in the primary phase come close to this threshold and could be capped when final data is used.

7. Do you agree a cap of 10% on per pupil funding increases is a reasonable adjustment to limit gains and manage formula affordability?Yes No Not SureIf No please explain your choice and suggest an alternative method.

8.2 Impact of Final Data on Affordability Final school budgets will be calculated following receipt of the October 2014 census data from the DfE in December. Affordability of the planned formula will need to be assessed again at that time.

8.2.1 Shortfall in FundingIt is proposed to manage any shortfall in funding by lowering the threshold for the cap to reduce the increase in funding that can be allocated. The cap however, is restricted to the size of the MFG allocations and if this condition is breached the unit values of the Basic Entitlement for each phase will be reduced as an equal amount per pupil to balance the remaining shortfall.

8.2.2 Excess FundingIt is proposed to allocate any excess funding by increasing the unit values of the Basic Entitlement for Primary and KS3 pupils as an equal uplift per pupil.

8. Do you agree that to manage any shortfall in funding the threshold for the cap of 10% should be lowered as the first step followed by reducing the unit values of the Basic Entitlements as described? Yes No Not SureIf No please explain your choice and suggest an alternative method.

9. Do you agree that to allocate any excess funding the Basic Entitlement for Primary and KS3 pupils should be uplifted as an equal amount per pupil? Yes No Not Sure

If No please explain your choice and suggest an alternative method.

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Appendix 1

9 Financial Impact of ProposalsIn considering these proposals schools should take into account the change in the overall allocation of funding between factors and impact for individual schools.

9.1 Summary of Proposed Formula Allocations 2015/16A summary of the proposed formula allocations compared with 2014/15 is provided below in Table11.

Table 11 – Summary of Proposed LMS Formula by Factor (14/15 data)

Formula Factors2014/15 2015/16 Proposed ChangeActual

£Proposed

£  £ %Primary Budgets

Basic Entitlement 23,753,45426,955,48

1 3,202,026 13.5%Deprivation - FSM6 1,434,909 1,637,273 202,364 14.1%Deprivation - IDACI 1,298,194 1,401,226 103,032 7.9%Low Prior Attainment 1,636,881 1,636,881 0 0.0%LAC 46,054 50,358 4,304 9.3%EAL 339,945 339,945 0 0.0%Rates 802,352 802,352 0 0.0%Lump Sum 2,920,428 3,126,520 206,092 7.1%MFG allocations 2,345,655 26,195 -2,319,460 -98.9%Cap reduction 0 -2,209 -2,209 -

Total Primary 34,577,87235,974,02

1 1,396,149 4.0%Secondary Budgets

Basic Entitlement - KS 3 12,701,01514,871,61

9 2,170,604 17.1%

Basic Entitlement - KS 4 13,442,61513,442,61

5 0 0.0%Deprivation - FSM6 898,913 1,275,328 376,415 41.9%Deprivation - IDACI 787,227 1,017,308 230,081 29.2%Low Prior Attainment 1,125,965 1,525,768 399,803 35.5%LAC 41,640 45,532 3,892 9.3%EAL 63,787 69,230 5,442 8.5%Exceptional Factor 101,017 101,017 0 0.0%Rates 206,917 206,917 0 0.0%Lump Sum 973,476 1,121,719 148,243 15.2%MFG allocations 2,154,557 267,236 -1,887,320 -87.6%Cap reduction 0 -79,779 -79,779 -

Total Secondary 32,497,13033,864,51

0 1,367,380 4.2%New School 0 188,235 188,235

Total Formula 67,075,00370,026,76

6 2,951,764 4.4%

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Appendix 1

The increase from 2014/15 is less than £3.2million as the £210,000 clawed back from schools (2013/14 adjustment for the age of transfer) supplemented the DSG allocation to the LMS formula in the current year. In addition, the DfE have increased the CRC contribution to be met from the Schools Block funding in 2015/16 by an estimated £40,000.

9.2 Funding Impact of Proposals for Individual SchoolsA summary of the impact for schools is provided in Table12 below:

Table 12 - Summary Formula Impact for SchoolsFormula Position Number of SchoolsFormula allocations with an increase in funding 29Formula allocations with a decrease in funding 1Formula plus MFG allocations (funding decrease) 4Capped formula increase at 10% 2

Despite the increase in unit values made possible by the additional DSG funding, a small number of schools will still see a reduction in funding as they have historically been funded closer to the current national averages, with four still protected by the MFG. The increase in funding will, however, improve the longer term financial outlook for these schools.

The schedule in Appendix 3 provides the indicative impact of the proposals for each school. The estimated budgets use the data applicable to the 2014/15 LMS formula, excluding business rates, which are funded at cost. This removes the impact of changing pupil numbers and pupil data and enables a direct comparison to be made with current funding levels. The MFG as it will be taken into account in 2015/16 is included in the indicative financial impact to provide schools with an indication of the overall funding change from these proposals.

10 Next StepsA summary of consultation questions is included at Appendix 4. The consultation closes on Sunday 5 October 2014 but earlier responses are welcomed.

Please respond using the Consultation Response Form to the following e-mail address:

Schoolfunding@poole.gov.uk

or by mail to:

Nicola WebbFinancial ServicesBorough of PooleCivic CentrePOOLE BH15 2RU

Responses will be collated and considered at the LMS meeting on 8 October and Schools Forum on 15 October.The draft formula will be considered by Schools Forum on 15 October 2014.

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Appendix 1

Schools Forum recommendations and comments will be reported to the Children’s Services Overview and Scrutiny Committee (CSO&S) in December 2014.

Schools Forum will be consulted on the final formula on 14 January 2015

Final recommendations from the CSO&S will form part of the overall Council budget setting process on 24 February 2015.

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Appendix 1

Appendix 1

Formula Factors in 2015/16

Possible LMS Formula Factors

DfE Funding to LA2015/16

Poole LMS Formula 2014/15

Basic Entitlement Compulsory Based on NOR Primary at least £2000 Secondary value or

KS3 and KS4 separately with a minimum of £3,000

Used separate KS3 and KS4 data

Used separate KS3 and KS4 data

Deprivation Compulsory factor Choice of FSM FSM Ever 6 IDACI bands (post

codes) Combination of 1 FSM

measure and IDACI bands

Used combination of FSM Ever 6 measure and IDACI bands

Used Combination of FSM Ever 6 measure and IDACI bands

Prior Attainment Optional (used by

nearly all LAs) Primary years 1 and 2

uses revised EYFSP data (identifies more children than previous).

Primary years 3 to 6 option of using scores below 73 or 78 of previous EYFSP measure.

Primary option to scale down years 1 and 2 data equally for consistency with other year groups.

Secondary no data choice - pupils with KS2 scores below level 4 in English or Maths.

Uses a score of 78

No scaling usedNot necessary at LA level but unit value will be lower without scaling as it is applied to a higher number of pupils.

Uses a score or 78

Scaling usedNo plans to changeYear groups across the primary phase differ between schools and those with older age groups would otherwise be disadvantaged.Consultation to confirm existing approach in 15/16

Looked after Children Optional No data choice Single unit value for

both phases

Factor used Factor Used

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Appendix 1

Possible LMS Formula Factors

DfE Funding to LA2015/16

Poole LMS Formula 2014/15

EAL Optional Data choice in both

phases based on time since entry to UK education system above year R: Within previous:

o One yearo Two yearso Three years

Separate phase unit values possible

Use of three year dataThis option identifies the greatest number of children so the unit value would be lower than other options.

Separate unit values

Uses two year data as there is no data capture for time in year R. Infant schools data is therefore capped at 2 years. Data for other schools increases at 3 years.

Separate unit values

Consultation to confirm existing approach in 15/16

Pupil Mobility Optional Counts pupils admitted

outside normal cycle within previous 3 years above 10% threshold.

Not used Not usedNo plans to change (locally mobility highly correlated with deprivation)

SparsityNational guidance contains these complex arrangements and changes for 15/16.

Used nationally but there is no allocation for Poole

Not used and not relevant

Lump sum Optional Used by all LAs Differentiation by

phase permitted since14/15 (middle schools split)

Max of £175,000 New short term

arrangements for amalgamating schools (not applicable for Poole in 15/16).

Small Differentiation by phase

Not differentiated by phase.

Consulting on potential change in 15/16

Business rates Optional Used by all LAs Funded at cost

Not used UsedSignificant variation at school level.

PFI, and London Fringe factors

Not used Not used and not relevant

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Appendix 1

Possible LMS Formula Factors

DfE Funding to LA2015/16

Poole LMS Formula 2014/15

Post 16 Optional Can only be used

where a factor existed in 2014/15

Not used Not used due to affordability in 2014/15.

Exceptional Premises Costs Optional Must be EFA approved

– most frequent being rents and joint use sports facilities.

Factor must be at least 1% of individual school budget and apply to less than 5% of schools in the LA.

Not used(Factor is for specific issues applicable to individual schools).

Used to fund the additional costs of the joint use sports facilities at St Aldhelm’s and Magna academies.

24

Appendix 1

Appendix 2

Proposed Unit Values 2015/16

Factors

14/15 15/16 Uplift DfE Progress

Actual Proposed Proposed Formula to DfE

£ £ % £ %Basic (Primary) 2,370.90 £2,690.50 13.48% 2,880.41 93.41%Basic (KS3) 3,222.79 £3,773.56 17.09% 3,949.51 95.55%Basic (KS4) 4,307.15 £4,307.15 0.00% 4,501.80 95.68%Free School Meals (P) 708.59 £808.52 14.10% 882.39 92%Free School Meals (S) 734.18 £1,041.61 41.87% 1,051.70 99%IDACI (P1) 123.82 £209.14 68.91% 209.14 100%IDACI (P2) 247.63 £260.19 5.07% 260.19 100%IDACI (P3) 371.46 £371.46 0.00% 346.79 107%IDACI (P4) 495.27 £495.27 0.00% 421.67 117%IDACI (P5) 619.09 £619.09 0.00% 476.84 130%IDACI (P6) 742.86 £691.15 -6.96% 691.15 100%IDACI (S1) 133.89 £289.06 115.89% 289.06 100%IDACI (S2) 267.78 £378.88 41.49% 378.88 100%IDACI (S3) 401.68 £470.32 17.09% 470.32 100%IDACI (S4) 535.57 £554.08 3.46% 554.08 100%IDACI (S5) 669.45 £669.45 0.00% 614.08 109%IDACI (S6) 803.51 £818.79 1.90% 818.79 100%LAC 918.00 £1,003.80 9.35% 1,003.80 100%Low Attainment (P) * 1,029.15 £1,029.15 0.00% 1,004.07 102%Low Attainment (S) 693.74 £940.07 35.51% 940.07 100%EAL (P) * 958.80 £958.80 0.00% 628.70 153%EAL (S) * 1,717.39 £1,863.92 8.53% 1,863.92 100%Lump Sum - P 108,164.00 £115,797.02 7.06% 115,797.02 100%Lump Sum - S 108,164.00 £125,155.40 15.71% 125,155.40 100%Lump Sum - Middle 108,164.00 £120,476.21 11.38% 120,476.21 100%

* DfE unit values restated for different use of data

25

Appendix 1

Appendix 3Indicative Financial Impact of Proposals for Schools

POOLE SCHOOLS 14/15 15/16 PROPOSAL - £ CHANGEMFG £ FORMULA MFG/CAP LUMP SUM TOTAL CASH £ %

Ad Astra 57,100 857,758 0 115,797 973,555 43,740 4.7%Canford Heath 60,681 1,107,555 0 115,797 1,223,352 72,176 6.3%Courthill 27,773 987,026 -2,209 115,797 1,100,614 89,529 8.9%Lilliput 54,884 845,764 0 115,797 961,561 49,938 5.5%Old Town 62,722 571,453 0 115,797 687,250 2,955 0.4%Stanley Green 50,856 786,543 0 115,797 902,340 45,722 5.3%Sylvan Infant 131,865 1,148,671 0 115,797 1,264,468 -1,323 -0.1%Twin Sails 30,751 1,094,204 0 115,797 1,210,001 92,543 8.3%Infant Schools 476,633 7,398,974 -2,209 926,376 8,323,142 395,279 5.0%Broadstone 49,018 859,277 0 115,797 975,074 57,201 6.2%Merley 66,930 855,994 0 115,797 971,791 39,168 4.2%Springdale 56,293 834,512 0 115,797 950,309 48,223 5.3%First Schools 172,241 2,549,783 0 347,391 2,897,174 144,592 5.3%Bearwood 21,446 675,802 0 115,797 791,599 58,670 8.0%Bishop Aldhelm's 141,940 1,522,647 0 115,797 1,638,444 34,355 2.1%Heatherlands 110,677 1,501,550 0 115,797 1,617,347 61,863 4.0%Hillbourne 140,538 1,043,774 269 115,797 1,159,840 -15,899 -1.4%Longfleet 98,016 1,619,572 0 115,797 1,735,369 86,768 5.3%Manorside 145,680 978,124 25,926 115,797 1,119,847 -15,290 -1.3%St Joseph's 78,672 1,052,733 0 115,797 1,168,530 43,455 3.9%St Mary's 33,599 1,304,417 0 115,797 1,420,214 117,879 9.1%Talbot 82,666 1,349,155 0 115,797 1,464,952 59,920 4.3%Turlin Moor 109,858 1,067,237 0 115,797 1,183,034 2,833 0.2%Primary Schools 963,093 12,115,011 26,195 1,157,970 13,299,176 434,553 3.4%Baden-Powell 195,325 2,111,097 0 115,797 2,226,894 62,155 2.9%Branksome Heath 137,253 1,464,588 0 115,797 1,580,385 27,689 1.8%Canford Heath 110,656 1,479,531 0 115,797 1,595,328 59,426 3.9%Hamworthy Park 88,654 1,204,637 0 115,797 1,320,434 45,858 3.6%Haymoor 100,522 1,076,095 0 115,797 1,191,892 23,193 2.0%Oakdale 101,278 1,721,694 0 115,797 1,837,491 99,798 5.7%Junior Schools 733,689 9,057,642 0 694,782 9,752,424 318,118 3.4%All Primary Phase 2,345,655 31,121,410 23,986 3,126,520 34,271,916 1,292,542 3.9%Broadstone Middle 31,324 1,951,638 -79,779 120,476 1,992,335 170,169 9.3%Magna 172,895 2,747,261 0 125,155 2,872,416 130,258 4.8%Carter 523,633 2,069,108 229,371 125,155 2,423,635 -35,002 -1.4%Poole High 283,314 7,408,243 0 125,155 7,533,398 557,480 8.0%St Edward's 187,974 4,193,231 0 125,155 4,318,386 262,374 6.5%Corfe Hills 3,619 4,971,997 0 125,155 5,097,152 314,910 6.6%Parkstone Grammar 289,803 3,765,966 0 125,155 3,891,121 47,194 1.2%Poole Grammar 274,802 3,608,744 0 125,155 3,733,899 62,741 1.7%St Aldhelms 387,193 2,531,985 37,865 125,155 2,695,005 -39,135 -1.4%Secondary Schools 2,154,557 33,248,173 187,457 1,121,719 34,557,350 1,470,989 4.4%Total Existing 4,500,212 64,369,583 211,443 4,248,239 68,829,265 2,763,531 4.2%Ocean Junior 0 110,687 0 67,548 178,235 178,235 -Total Schools 4,500,212 64,480,270 211,443 4,315,787 69,007,501 2,941,767 4.5%

Notes: 1. Business rates are not included in the above budgets as these remain funded at cost. 2. The 2014/15 MFG allocations have been included to explain why a number of schools

have a low increase in funding or a decrease despite the significant increase in unit values proposed for 2015/16.

All indicative budgets are based on 2014/15 pupil numbers and data

26

Appendix 1

Appendix 4

Summary of Consultation Questions

1. Allocation of Funding Between Primary & Secondary Phase - Do you agree that Poole should allocate funding between Primary and Secondary factors in the same proportion as the DfE funding to the LA?

2. Choice of Factors and Data Options - Do you agree that Poole should use data in the LMS formula in the same way as the DfE allocates funding to the LA unless there is a clear reason not to do so?

3. Use of Data Scaling in the Primary Prior Attainment Factor - Do you agree the EYFSP data for years 1 and 2 should continue to be scaled back to the level of the previous measure to ensure data consistency between primary phase schools with different age ranges?

4. Use of EAL 2 Data - Do you agree that the use of EAL 2 continues to be more appropriate than EAL 3?

(a) Primary (b) Secondary

5. General Options for Updating the LMS Formula Unit Values (a) As a matter of principle, which option do you prefer to make progress

towards national consistency?

Option 1 - an individual factor approach

Option 2 - to replicate the DfE method scaled down equally as affordable

(b) If option 1 is taken forward, do you agree with the general approach to update unit values?

6. Proposals for Unit Values - Do you agree with the unit values proposed?

7. Limiting Gains & Affordability - Do you agree a cap of 10% on per pupil funding increases is a reasonable adjustment to limit gains and manage formula affordability?

8. Final formula adjustment in December – Shortfall. Do you agree that to manage any shortfall in funding the cap threshold of 10% should be lowered as the first step followed by reducing the unit values of the Basic Entitlements as described?

9. Final formula adjustment in December - Excess. Do you agree that to allocate any excess funding the Basic Entitlement for Primary and KS3 pupils should be uplifted as an equal amount per pupil?

10.Final Comments. Are there any comments you would like to make on the proposals in the Consultation Paper as a whole?

27