Agenda item

To receive and consider the DSG Management Plan / Safety Valve Update.

Ming Zhang presented the DSG Management Plan / Safety Valve Update report.

During the presentation he made the following points:

·           A two stage survey with schools had been carried out about the proposal to transfer 1% from the Schools Block to the HNB;

·           The assumption of this transfer was part of the Safety Valve agreement with the DfE;

·           There was a risk that the DfE may not continue its support with the Safety Valve programme, should this transfer not be agreed;

·           There had not been a high number of responses received from the survey, however the results showed that schools were concerned about the potential negative effect of a 1% transfer in their own finances;

·           The vast majority of secondary schools were in favour of the 1% transfer, but the majority of primary schools were against it;

·           Schools had expressed that they understood the pressures and the reason for the request but were concerned about their financial situation.  They asked that alternative solutions be sought;

·           The Safety Vave programme had been agreed by the DfE with the assumption that there would be a 1% transfer from the Schools Block to the HNB, and a contribution from the Council.  The DfE reviewed the programme every three months and they could withdraw from the agreement if the 1% transfer was not agreed;

·           If the HNB deficit was not eliminated, through joint effort, it could escalate to £56 in the next five years, and the negative consequences to all involved would be enormous;

·           A pragmatic solution needed to be found, and this challenge was to be addressed in partnership with schools, the local authority and health;

·           In view of the fact that schools were unlikely to agree to a 1% block transfer, the possibility of reaching a compromise with a smaller contribution was being considered.

Jonathan Wilding, Safety Valve/SEND Consultant explained that since the publication of the agenda, conversations with colleagues had taken place which indicated that Schools Forum was unlikely to vote against the schools’ consultation survey results.  It was now understood that this option was not acceptable to schools, mainly because of affordability issues.

Taking into account the above mentioned issues, the local authority was reviewing the proposal and would be asking for 0.5% Schools Block transfer.  It was believed that a bit more dialogue with schools was needed to secure schools’ support before a decision could be made.  It was suggested that an extraordinary Schools Forum meeting be set up in early November to decide this matter.

Councillor Bray explained that the local authority was asking for 1% transfer because that was the expectation placed on the local authority by the DfE (not because the local authority thought that schools could afford it).  The Safety Valve programme included a £28m contribution from Council tax, £20m from the DfE to write off debt (this £20m could only be used to write off debt) and the 1% transfer from the Schools Block for the next five years.

Councillor Bray expressed frustration that this situation had been caused by historical insufficient funding, Wokingham was the lowest funded local authority in the country.  However, the DfE did not take this fact into account.

Councillor Bray went on to explain the potential consequences of the collapse of the Safety Valve programme.  She explained that in three years’ time the Council could be in a position to have to declare S114 if the Council was asked to pay the HNB deficit.  Should that happen, commissioners would be sent in, and all the statutory services would stop, including all the help given to schools.  Also, assets would have to be sold off, staff would have to be reduced, and the Council tax would have to go up.

She emphasised that the local authority was fully aware of the financial struggle that some schools were facing.  However, the proposal would improve the SEND offer for the future, to the benefit of all schools.

Ming Zhang emphasised that it was important to demonstrate to the DfE that the schools and the Council were working in partnership to find a solution to this challenge.

Derren Gray believed that the Council contributed £1m towards Central Services, he asked if those services would be stopped or be significantly reduced if the Council declared S114? 

Katherine Vernon confirmed that the Central Services Block did not fully cover the cost of the services provided, the Council covered the gap.  She offered to find out the exact number for a better understanding of the implication of having the fund withdrawn.  Derren Gray stated that having this information would help schools make an informed decision.

Carol Simpson stated that she understood the situation and agreed with the principles of the proposal.  However, there were schools which had significant difficulties with their budgets and could not manage with less money.

Ming Zhang stated that there were 24 schools in the borough with MFG, and they were protected.

The Chairman stated that careful consideration should be taken, as the proposal would affect the next five years.

Katherine Vernon explained that there was a disparity in the system, in that some schools carried forward a surplus and others were in deficit; there was money in the system as a whole, but not where it was needed.

Emma Shrimpton, Finance Business Partner Children’s Services stated that Officers were working with schools that were in financial difficulties to help them to find solutions.  It was important, where possible, to identify challenges early to avoid going into a deficit position.

Carole Simpson stated that Katherine Vernon had met with her school and there had been no further suggestions to find a solution.  The problem was the way the school was funded, the school had been on MFG for a number of years.  Carole Simpson expressed serious concern and stated that the school had to provide a minimum number of staff to teach the children.

Nicky Taylor-Dikens stated that her school was not under MFG but had been in deficit almost every year.  They had just undertaken a re-structure and reduced the number of staff.  She pointed out that infant schools needed a higher ratio of staff to children due to the children’s age.  The excel spreadsheet that she had received had asked her school for 1.4%, more than the 1% being discussed.  She could not afford to accept this reduction in funding for her school.  She also did not believe that Officers would be able to find ways to reduce the school’s budget.  She pointed out that there were some schools with large carry forward sums and this situation was not fair in her opinion.

Ming Zhang offered to meet with Nicky Taylor-Dickens and discuss her school’s situation outside of this meeting.  Nicky agreed and invited Ming to visit her school.

Councillor Pittock pointed out that in a S114 scenario, there would be no extra curriculum activities available for children, and less support for families in the borough, and he worried that schools would have to deal with the additional stress of children coming to school in not the best possible frame of mind to learn.  He understood the financial struggles being faced by schools but urged schools to consider the 0.5% transfer proposal as there was no other solution to this funding problem.  He worried about the consequences of not reaching an agreement.

Corrina Gillard stated that due to pay raises she had had to find an additional £44k (which had not been budgeted for) this year in her budget, and as a result had had to lay off staff.  She had a significant number of children with SEND needs in her school, and she worried that if she had to further reduce the number of staff to meet 1% or 0.5%, she would lose staff as they would not be able to cope with the work.  She believed that the situation was desperate for many schools in the borough.

Ming Zhang offered to meet with Corrina Gillard outside of the meeting.

Councillor Bray stressed that she understood the schools financial struggles, as she had been a school governor for over 20 years.  However, the measures being proposed would help the situation long term, by offering the support needed to SEND children.  She stated that the situation would become worse if a solution was not agreed collectively.

Councillor Bray acknowledged that there had been a history of mistrust from schools towards the Council.  She explained that this money would not be used to pay debt, but to invest in services which would benefit schools.  She hoped to rebuild the schools’ trust and asked schools to consider the 0.5% transfer proposal which would be discussed at the extraordinary meeting.  It was really important to reach an agreement and to work together.

The Chairman spoke on behalf of primary schools and stated that schools understood the proposal, however there was an immediate need to provide for the education of children with a sufficient number of staff.

It was proposed and agreed by Schools Forum members that an extraordinary meeting would be set up either on 6 or 8 November 2023 to discuss the proposal of a 0.5% transfer from the Schools Block to the HNB.  In the meantime, further dialogue with schools about this proposal would be undertaken.  Subsequently the meeting was set up for 6 November 2023 at 10am via Teams.

Carole Simpson stated that some schools were in a position of having large amounts of carry forward funds, more than what used to be considered acceptable.  She asked if this was being considered?

Katherine Vernon explained that this had been considered, however the Council could only direct a clawback from maintained schools, any clawback from academies would have to be determined by Schools Forum.

Shirley Austin urged caution and felt uncomfortable with the suggestion of clawing back funds from schools.  She believed that it was unfair to penalise the schools that had worked hard to achieve a balanced budget. 

Ming Zhang agreed that careful consideration should be taken.  The Chairman stated that the focus should be on considering the request for 0.5% transfer.

In relation to the question raised earlier about having an independent Early Years provider representative in the BEP, Ming Zhang stated that it should read Borough Education Partnership, not Berkshire as written in the agenda papers.  He informed that this appointment had not yet been made, but he would be looking to find the right representative to join BEP.

RESOLVED That an extraordinary Schools Forum meeting to discuss and decide the proposal of 0.5% Schools Block transfer to the HNB would be set up in early November 2023.