This report sets out the budget required for growth funding in 2021/22 plus estimates for the following two years, and recommends the criteria to be used in allocating this funding in 2021/22.
1.1 AGREE: the criteria to be applied in allocating the funding to schools (paragraphs 6.1).
1.2 AGREE: that the allocation of the estimated £1,577k growth funding in 2021/22 is split £388k for the school formula and the remaining £1,189k is set as the budget for bulge classes/continuing expansions, and that any unspent funds will be carried forward towards meeting future year shortfalls.
2.1 Growth funding is allocated to the local authority to meet the cost of increases in pre-16 pupil numbers either in new schools or bulge classes set up to meet basic need. This is because the funding a school receives is retrospective and based on pupil numbers from the previous October census, and therefore does not include the additional pupils.
2.2 The funding is allocated through its own separate formula and is part of the schools’ block DSG allocation. It is not ring-fenced specifically for growth, but if there is a shortfall, this needs to be met from a top slice from the main schools’ block allocation. If the funding is not required for growth, it can be added into the school formula.
2.3 In 2019/20 the Government used a new formula for allocating funding for growth, based on actual growth in pupil numbers. The growth is measured within each “middle layer super output area” (MSOA). These smaller areas will detect pockets of growth within the wider local authority area – in Reading there are 17 MSOAs. For the 2021/22 allocation, increases in pupil numbers between October 2019 and October 2020 in each of these areas are counted; only positive increases are counted, so a local authority with positive growth in one area balanced out by negative growth in another will still receive funding.
2.4 The growth factor values applied for the 2021/22 formula are as follows:
The values have increased by 2% compared to the previous year. They include an area cost adjustment for Reading.
2.5 Previously, growth was funded on actual budgeted spend and in 2018/19 Reading received £2.092m. In 2019/20 under the new formula, the allocation reduced to £1.658m (protected transitional funding). In 2020/21 the allocation was £1.345m, and in 2021/22 it is estimated to reduce by £501k to £0.845m.
2.6 Growth funding can only be used to support growth in pre-16 pupil numbers to meet basic need; support additional classes needed to meet infant class size regulation; and to meet the revenue costs of new basic need schools. The growth fund must not be used to support general growth due to popularity of a school – this is managed through lagged funding.
2.7 New growing schools, where the change is permanent and a significant change to numbers must be funded through the school formula by adjusting the pupil numbers. The funding to support this will still be met from the growth fund.
2.8 The Schools’ Forum must agree on an annual basis the total size of the growth fund and the criteria on which it will be allocated. All schools must be funded on the same criteria, new and existing maintained schools and academies.
2.9 This report sets out the estimated growth funding requirements for 2021/22 and the following two years, and based on this knowledge and estimated funding, proposes the criteria and budget to be applied for 2021/22.
3.1 In the primary sector, all schools have now completed their expansions, with Churchend now full this academic year. The new school Civitas will have its final year group added in September 2021. The brand new two form entry primary school at Green Park Village opened in September 2020 and will require funding for 60 places from the growth fund as it adds each year group over the next six years.
3.2 In the secondary sector, Highdown will complete its expansion in 2021/22. The new River Academy (8 form entry) is due to open in September 2023. In the meantime, it is estimated that four secondary bulge classes will be required in 2021/22 and six bulge classes in 2022/23.
4.1 New schools are paid through the school formula based on their estimated pupil numbers and characteristics. For schools agreeing to take a “bulge” class or are a planned expansion, the current 2020/21 funding rates per additional pupil in the additional class (assumed at maximum capacity, usually 30) are £3,750 primary and £5,000 secondary. These are the 2020/21 recognised minimum per pupil funding levels used in the national funding formula and much higher than the basic per pupil funding rate (AWPU) used by many other local authorities. The one-off grant for new schools pre-opening costs is currently £67,000 to reflect the funding received (retrospectively) through the schools’ block funding allocation.
4.2 For 2021/22 the equivalent rates are £4,180 primary, £5,415 secondary (a significant increase due to the Government adding the teachers’ pay and pension grants to the minimum funding levels) and £71,105 pre-opening costs for a brand new school. It is proposed that these rates are applied to the allocations of growth funding in 2021/22.
4.3 Note that growth funding can only be paid to schools taking enough additional pupils that require an additional class and teacher (i.e. it is not paid for filling spaces in existing classes), and that this increase is as a result of basic need in the area. The increase must have been agreed by the local authority as part of its place planning in order to meet shortfalls in overall places. All other growth in pupil numbers is funded retrospectively through the normal school funding process, based on the previous October census.
4.4 Payments to schools are made in November after the pupil numbers have been verified with the approved October census data. This covers the period September to March. Academies receive a further payment in April to cover the period April to August (this payment is made by the local authority but is recovered from ESFA and is not taken from the growth fund DSG allocation).
4.5 Schools need to be aware that funding for a bulge class is one off funding, and in the following year the funding for that year group will be based on the school funding formula and actual pupil numbers. The organisation of classes therefore needs to be based on actual pupil numbers, and schools should not be setting up arrangements based on one off growth funding, if in the long term this will make them unviable. Schools should also be prepared to reduce the number of classes when the bulge class comes to an end; the lagged funding received through the school formula is not deducted, so schools have this additional funding in the final year to make the necessary arrangements.
4.6 It is impossible for the local authority to guarantee any future allocations of funding that is subject to changes in Government legislation and national funding allocations, so the decision on growth funding allocations is for one year only. Funding will be reviewed on an annual basis and with reference to current regulations. We do not know yet how the Government will allocate growth funding as part of a full National Funding Formula.
5.1 Appendix 1 shows the budget and expected outturn for 2020/21 and contains a breakdown of the requirements for 2021/22 and the following two years based on current known requirements as set out in section 3 of this report. The funding requirement uses the values outlined in paragraph 4.2 for 2021/22 and the following two years.
5.2 In the current year, the budget for the growth fund was set to underspend by £535k. This underspend has increased to £623k as only one bulge class for secondary was required in September 2020. This amount is added to the resources available for 2021/22.
5.3 In addition to the estimated in year funding of £845k, £109k is received from ESFA to pay academies their April to August allocation, and £623k is estimated to be carried forward from 2020/21, a total of £1,577k available. The budget requirement in 2021/22 is £971k. Of this, £388k is for new schools which will go into the school funding formula, and £583k for bulge classes/expanding schools. This would leave a surplus balance of £606k at the end of 2021/22.
5.4 In the three year model it is assumed that the in-year funding will remain the same in the following two years, as will the rate used to allocate the funding to schools. Due to the uncertainty of this, it is proposed to ring fence the funding and keep the surplus balance within the growth fund for future requirements. With the recent pattern of funding significantly reducing each year and with a new 8 form entry school to fund for several years, this would be a sensible and prudent action.
6.1The criteria proposed for 2021/22 to be approved by Schools’ Forum is as follows:
6.2 Of the estimated growth fund allocation of £1,577k, £388k is transferred to the school formula for new schools and the growth fund budget for 2021/22 is set at £1,189k, with any under allocation in 2021/22 being carried forward to 2022/23.
| School type | 20/21 rate | 21/22 rate | 22/23 rate | 23/24 rate | Notes |
|---|---|---|---|---|---|
| Primary | £3,750 | £4,180 | £4,180 | £4,180 | Academies are funded for 12 months due to academic financial year. |
| Secondary | £5,000 | £5,415 | £5,415 | £5,415 | Academies are funded for 12 months due to academic financial year. |
| School | Expanding/bulge class | Additional Class size to be Funded | Proportion of Year | 2020/21 Budget | 2020/21 Actual | 2021/22 Budget | 2022/23 Budget | 2023/24 Budget | Notes |
|---|---|---|---|---|---|---|---|---|---|
| Primary: | |||||||||
| Churchend ACADEMY | Expanding by 30 per year (to 60) | 30 | 0.583333333 | 65,625 | 65,625 | ||||
| Churchend ACADEMY | (met by DfE for April to August) | 30 | 0.416666667 | 49,525 | 49,525 | 46,875 | Full from September 2020 | ||
| Secondary: | |||||||||
| Highdown ACADEMY | Expanding by 30 per year (to 250) | 30 | 0.583333333 | 87,500 | 87,500 | 94,763 | |||
| Highdown ACADEMY | (met by DfE for April to August) | 30 | 0.416666667 | 63,725 | 63,725 | 62,500 | 67,688 | Full from September 2021 | |
| The Wren ACADEMY | (BULGE 19/20 met by DfE for April to August) | 28 | 0.416666667 | 59,477 | 59,477 | ||||
| Highdown ACADEMY | (BULGE 19/20 met by DfE for April to August) | 30 | 0.416666667 | 63,725 | 63,725 | ||||
| Blessed Hugh | BULGE 20/21 | 30 | 0.583333333 | 87,500 | 87,500 | ||||
| Any School | BULGE 20/21 | 30 | 0.583333333 | 87,500 | 0 | Not used in 2020/21 | |||
| Any School | BULGE CLASSES 21/22 | 120 | 0.583333333 | 379,050 | 4 bulge classes | ||||
| Any School | BULGE CLASSES 22/23 | 180 | 0.583333333 | 568,575 | 6 bulge classes | ||||
| Academy Bulge Classes | (met by DfE for April to August) | 0.416666667 | 270,750 | 406,125 | |||||
| New Schools (pre opening start up costs only): | |||||||||
| Green Park Primary | 67,000 | 67,000 | Opening September 2020 | ||||||
| River Academy | 71,105 | Opening September 2023 | |||||||
| Total for Expanding Schools/Bulge Years | 631,577 | 544,077 | 583,188 | 907,013 | 477,230 | ||||
| Add: Total Growth Funding used in School Formula for new schools | |||||||||
| Civitas | 136,666 | 136,666 | 241,186 | 0 | Full from September 2021 | ||||
| Green Park Primary | 235,751 | 235,751 | 146,300 | 146,300 | 146,300 | Opening September 2020 2 FE | |||
| The River Academy | 845,600 | Opening September 2023 8 FE | |||||||
| Total for New Schools | 372,417 | 372,417 | 387,486 | 146,300 | 991,900 | ||||
| Total to be met from Growth Fund Allocation | 1,003,994 | 916,494 | 970,673 | 1,053,313 | 1,469,130 | ||||
| FUNDING: | |||||||||
| DSG Schools Block Growth Fund Allocation | 1,345,264 | 1,345,264 | 845,000 | 845,000 | 845,000 | Year 2 and 3 assumes same level of funding | |||
| Carry Forward from Previous Year | -90,322 | -90,301 | 622,671 | 606,373 | 736,498 | ||||
| Paid by DfE for Academies (April to August lump sum for new school payment) via Recoupment Adjustment | 47,750 | 47,750 | |||||||
| Paid by DfE for Academies (April to August payment) via Recoupment Adjustment | 236,452 | 236,452 | 109,375 | 338,438 | 406,125 | ||||
| Total Estimate of Funding | 1,539,144 | 1,539,165 | 1,577,046 | 1,789,810 | 1,987,623 | ||||
| Surplus / (Shortfall) | 535,150 | 622,671 | 606,373 | 736,498 | 518,493 |