This document forms part of the formal consultation process with Headteachers, Governors, Diocese and Union representatives. As part of the consultation process, briefing sessions will be held as follows.

Schools are urged to attend one of these meetings in order to clarify any points not explicit in the consultation document.

The Primary Headteacher working group has suggested that consultation should occur in two parts. Firstly a consultation of the individual factors that make up the model, and secondly a consultation on how the model is implemented.

The first part of the consultation is set out in this document. It describes each of the elements of the new formula and quantifies the cost of the factor if resources were available.

The second part of the consultation would consider the methodology of re-scaling the model to existing resources. The primary Headteacher working group considers this process to be critical to the new models' implementation and think it should be discussed separately from the individual factors within the formula.

The timing of the second part of the consultation is likely to occur in the early part of next year but is unlikely to be introduced by April 2003. The working group therefore suggests that protection for all schools is necessary for 2003/4 as was proposed for 2002/3 whereby all schools would be protected to the funding levels that would be derived from the current formula. We may however choose to introduce the model quicker for the secondary sector as there was considerably less concern about the individual factors in the secondary sector during last years consultation. This issue is addressed within this consultation

Attached to this document is a response pack. This pack has been E-mailed to schools which will allow responses to be completed electronically. Schools are requested to complete a response pack as soon as possible but no later than 13^th December 2002. We urge schools to respond by e-mail, as this will ease collation of the results.

Should you require any further information or clarification please contact the following officers:

Contents

List of Appendices

INTRODUCTION

It has been established and agreed that the current formula by which schools are funded no longer reflects the requirements of the current education expectations, is not equitable and has lost much of its rationale. A review of the formula has been ongoing for the last five years.

The LMS Review Group consists of representative elected members, headteachers, governors and relevant officers. The headteachers and officers formed a working party to propose and review changes to the formula. These were worked out in considerable detail, over a sustained period of time, and were presented to the LMS Review Group. Activity Led Resourcing (ALR), based on the needs of a class of pupils, is central to the review and consequent structure of the revised formula. As the proposals were developed and refined about how funds might be more appropriately and equitably allocated various newsletters and consultation documents were issued and briefings held to keep stakeholders informed as to progress.

Consultations with schools took place a year ago and although general agreement of the principles and aims was forthcoming, some concerns over the impact of the outcomes of the review were highlighted. The Education Committee requested further work to be carried out to validate some of the factors within the model. This work has been carried with the help of a larger group of primary head teachers (Membership attached at Appendix M).

This work has occurred during the last nine months and the revised proposals form the substance of the attached document.

The original principles have been adhered to, and are detailed in Section 3. They confirm that the formula should be straight forward, be based on the requirements of schools to educate its pupils, and be introduced gradually and with due notice since there will be gainers and losers.

The vast majority of factors in the formula have been reviewed

· Teaching Staff Requirements, inc. (see section 4)

Monitoring, Development and Support Time (MDS) (see section 5)

Differences in Teacher Costs (see section 6)

· Management Time (see section 7)

· Support Staff (see section 8)

· Curriculum Resources (see section 9)

· Curriculum Support (see section 10)

· Premises Factors (see section 11)

· Lump Sums (see section 12)

· Social Deprivation - Additional Educational Needs (AEN) (section 13)

· Other School Specific factors (see section 15)

· Infant Class Size Funding (Section 18)

These make assessments of what schools need to deliver the curriculum.

This amounts to more than the money currently available and so there has been a need to scale back actual amounts whilst adhering to the principles of Activity Led Resourcing.

In last year's consultation, the suggestion that the introduction of the new model should be staged was put forward, with full protection for the first year (ie. no change). This would have meant that no school would have gained or lost resources compared with the current model in 2002/3. As stated earlier the Primary Headteacher Working Group are proposing the same protection whilst the re-scaling element of the formula is consulted on.

What is now being presented is a mechanism for allocating funding based on principles we can defend as ambassadors for schools and the Education Service. It is transparent; fairer and can be built on and developed further. It would replace a mechanism that is outdated, outmoded and whose rationale is lost in the mists of time.

The document is detailed but hopefully clear so that you will be sufficiently informed to be able to respond. The consultation period is the opportunity for you to voice your support and your concerns. A formula based on an activity led approach has to be fairer to all children.

Inevitably a formula based on principles has the potential to create one or two anomalies. Never the less we think that the proposals are better than what we have and a strong basis on which to build further.

Additionally this document covers others changes to the LMS formula that have not been considered in prior year consultations namely

¬ Split sites Factors

¬ AEN factors (Additional Educational Needs)

¬ Infant class size funding

Each item is discussed in the document and an officer contact list is provided should you require any further clarification.

Funding of post 16 age pupils is now the responsibility of the Learning and Skills Council (LSC) and so is not included in this exercise. The funding of Special Schools and Nursery Classes has been reviewed and so are excluded as well.

IMPORTANT NOTE ABOUT WHAT WE CAN AFFORD

At present the Local Authority spends significantly above the Standard Spending Assessment (SSA) for Education and has been committed to passporting the SSA increases in full to the Education Service. Although we will not be able to support the full cost of the suggested model this does not mean that improvements to any individual factor cannot be accommodated

This document describes a possible funding formula based on what we would like schools to be able to spend. But it's likely that this will cost more than we have to allocate to schools today.

We can only spend what we have got.

The proposals in this document set out the suggested policies, on which the factors in the new formula could be based. For example, we propose that the age weightings applied to pupils be based on certain assumptions about class sizes and non-contact time for teachers. This doesn't mean that we can afford to fully fund the policy currently. Nor does it mean that this is what schools should spend. This is about funding. Expenditure is a matter for each school.

Similarly, the document includes some indicative cash allocations - so much per pupil in Year 11 to pay for exam fees, for example. But we haven't necessarily got the money to pay these rates in full.

As we can't currently afford to fund the policy assumptions in full, we will have to use a scaling factor to adjust allocations to what we have got. For example, if the total cost of the proposed formula was £100 million, but we only had £90 million in the ISB, we would reduce all of the allocations in each funding factor by 10%. This scaling factor is considered further in section 17 for secondary schools and in the second part of this consultation process for primary schools.

ACTIVITY-LED RESOURCING

Background

In September 2000 schools were consulted on the introduction of a revised formula. In preparing this consultation paper the comments and responses received from that consultation have been taken into account, where appropriate.

1. Reasons for a new formula

1.1 The B&NES formula for mainstream schools is based on the way Avon allocated its budgets, with a few recent modifications. Many schools perceive this as a problem, for the following reasons:

2. Work of the review group

2.1 The LMS Review Group has been overseeing the work of the Review. The Group consists of representatives of headteachers, governors, councillors and officers.

2.2 The Group started by considering the principles that would underpin the review. It then commissioned more detailed work on aspects of the formula.

2.3 The Group also received reports on ways of counting pupil numbers, premises factors, budget protection and other formula factors.

2.4 All schools have been kept informed about the Review's progress through newsletters that have been distributed throughout the process. They were invited to comment on any aspect of the Review, and to suggest factors that the new formula should take into account. There have been opportunities for discussions.

2.5 The group has considered several additions (in terms of possible factors) to the proposal that was consulted on last September. These additions are included in this consultation. The new funding model is made up of separate sections, and each section is discussed in turn within this document.

2.6 The model set out in this document looks at each of the factors considered relevant to the funding of schools. It then quantifies the total cost of supporting the model

3. Suggested Principles (agreed in 1999, and confirmed in 2000 and 2001)

3.1 We need a new formula

3.2 The new formula should be based on an explicit statement about what schools should be doing. This means getting agreement on a framework of activities we should fund, and how these might vary depending on pupils' age, ability, the size of the school and so on.

3.3 There is no point in developing complicated policies that will be neither understood nor implemented. Instead, our starting point should be work that others have done. We should pick the best / most useful elements from other LEAs' models and adapt them to suit our needs.

3.4 The new formula should be transparent and predictable. We need to strike the right balance between simplicity and fairness.

3.5 The new formula will produce gainers and losers. We need to accept that this is inevitable, but we must also start from where we are, and be sympathetic to schools' circumstances. This means phasing the introduction of the new formula.

3.6 The Review Group noted that the introduction of the new formula would be more palatable if schools could `level up' to it, where this was possible.

Questions for consultation

Q1) Are there any principles that are no longer appropriate?

ACTIVITY-LED RESOURCING - Teaching Staff

4. Proposed teaching staff ALR model

4.1 An ALR model consists of a set of assumptions about what classes need and what they cost. The headteacher working group discussed the following possible sets of assumptions:

4.2 The headteacher working group's suggested assumptions are set out in Appendix A. They are based on the professional judgement of headteachers on the LMS Review Group, and take account of relevant Health and Safety considerations.

4.3 These assumptions have been modified from the consultation last year to reflect changes in curriculum requirements and comments received during the consultation process.

4.4 The appendix sets out the different class sizes it was felt appropriate to support for different subjects within the different Key Stages. For some subjects in some Key Stages it was felt that there was not a need to provide for smaller classes that the norm and therefore these situations are shown as blanks in the appendix.

4.5 These assumptions are broadly compatible with the Curriculum 2000 guidelines for Key Stages 1, 2 and 3. (These guidelines do not apply to KS4.)

4.6 Note that these assumptions create a model that we could use for allocating budgets. This does not mean that every school will necessarily apply this structure, nor that it is desirable for them to do so. The actual organisation of the school and consequent expenditure is a matter for the headteacher and governing body.

5. Monitoring, Development and Support Time (MDS)

5.1 The headteacher working group considered that we should take a simple approach to Monitoring, Development and Support time (MDS), suggesting 0.2 fte per teacher for primary schools and 0.3 fte for secondary schools.

5.2 These assumptions were suggested after considerable discussion about whether it was possible and desirable to specify the exact time that each MDS activity takes. There was also some doubt about whether total agreement would be possible, given the different organisational arrangements in each school.

6. Differences in teacher costs

6.1 The ALR model also needs to take account of the difference in average teacher cost in primary and secondary schools.

6.2 In May 2002, the average cost of teachers, excluding headteachers and deputies but including responsibility points (below point 11 and on-costs) was:

6.3 These average costs will be recalculated prior to running the formula to ensure that the most up to date information available is used in the final formula

6.4 The Primary average salary is higher because a greater proportion of primary teachers are further up the pay scale than primary teachers.

6.5 This methodology only covers the teaching requirements on the school. Management costs are covered in the next section. Additionally, payments made to teachers who have passed through the threshold are excluded from the calculation because this element of the teachers pay is supported by grant funding.

Questions for consultation

Q2) Do you agree with the class size and curriculum assumptions in the proposed ALR model (as set out in Appendix A)?

Q3) Do you agree with the MDS time assumptions in the proposed ALR model (as set out in Appendix A)?

Q4) Do you agree with the treatment of different primary / secondary teacher costs in the proposed ALR model?

7. Management Time

7.1 The management of the school requires additional time and resources to enable the Headteacher and senior staff to carry out the administrative and academic processes of running the school.

7.2 The LM Review Group considered the table shown at Appendix B as an appropriate structure with which to fund schools for this activity.

7.3 This structure is slightly different from that proposed last year and reflects the views of the Primary headteachers on the working group as to the non-teaching needs of headteachers and deputies in different sized schools.

7.4 Whilst schools would be funded to reflect the structure in the appendix, it does not mean that schools have to structure their management in this way. Schools are expected to establish the structure that is most appropriate for their school.

7.5 The structure shown in the appendix reflects the need for larger schools to employ deputy heads and senior teachers etc. In the primary sector the table shows that smaller schools require management time for the headteacher even in the smallest school.

7.6 It should be noted that the smaller schools could also attract allocations from the curriculum protection (small schools) factor that is described in section 10 on this consultation document. These two allocations should be considered together for smaller schools.

7.7 The cost of the management time has been calculated using the mid point of the school group size salary range. Therefore larger schools would receive a larger allocation to reflect the higher costs of their headteacher.

Questions for consultation

Q5) Do you agree with the allocations set out for management time in Appendix B?

8. Support Staff

8.1 The LM Review Group considered the methodology of funding support staff in different ways for the Primary and Secondary sectors.

8.2 For Primary schools Appendix C indicates the modelling assumptions that the headteachers group felt were appropriate for the funding of support staff in the primary sector.

8.3 The table in the appendix shows that for classes of 27 pupils the number of hours support a school needs for each category of school support staff. The following categories of staff are covered in the analysis.

8.4 For each of the categories an hourly rate was calculated to allocate resources to each of the categories. The hourly rate was extrapolated from the Human Resources summary of school staffing structures, using the likely pay and conditions of the differing categories of staff.

8.5 The hourly rates were then applied to the time allocation calculated for each staff category for each school.

8.6 For Secondary schools a similar approach was adopted but using the headteachers assessment of staffing requirements for an 800 place school. This assessment is shown in Appendix C

8.7 For schools smaller or larger than 800 pupils, a pro-rata increase or decrease was applied to the staffing requirement in the appendix.

8.8 For smaller Secondary schools additional support is provided under curriculum protection (small schools) to ensure that sufficient caretaking support is in place.

8.9 The same approach, as applied to the primary sector, was then adopted to calculate the staffing requirement and the resource allocation for each school.

8.10 In the primary sector the group felt that a minimum allocation was necessary for all schools for 2 groups of staff.

8.11 These groups were

8.12 The size of school attributed to these levels was

8.13 The group felt that these staff groups should be supported by a lump sum and an amount per pupil.

8.14 The lump sum and per pupil amounts were extrapolated from the two extremes.

8.15 The values attached to these staff were calculated as

8.15 As for some smaller schools this methodology would not provide sufficient to meet the minimum requirements therefore additional allocations through the curriculum protection factor will be necessary. See section 10.

Questions for consultation

Q6) Do you agree with the time allocations set out for primary schools support staff in Appendix C?

Q7) Do you agree with the allocations set out for Administrative and Caretaking staff?

Q8) Do you agree with the time allocations set out for secondary schools support staff in Appendix C?

9. Resources - Curriculum and Other

9.1 The resource requirements of pupils in differing key stages were considered by the headteacher working group. The group looked at work initiated in another LEA and amended that analysis where appropriate.

9.2 The analysis in Appendix D shows the funding allocations for each pupil for the various elements of the national curriculum. Additionally, resources for examinations, field studies and general school equipment have been included.

9.3 The group accepted that it was very difficult to identify correctly the total resources requirements of each subject, but felt that the attached appendix gave a reasonable indication of the costs of books, equipment and consumable materials etc.

9.4 Additional allocations have been included for high cost play equipment in the Foundation Stage. Additionally support has been included for administrative issues when pupils first arrive in the school system.

Questions for consultation

Q9) Do you feel the allocations for curriculum resources set out in Appendix D reflect the needs of schools?

10. Curriculum Protection - Small Schools

10.1 The approach taken for curriculum protection has been significantly amended from the consultation proposals of 2001. The approach taken for curriculum protection has 2 strands depending on the type and size of school.

10.2 The 2 strands cover support for teacher costs, and support for administrative/clerical and caretaking staff.

Teacher support

10.3 The working group suggests that a small school is one with fewer than 120 pupils, which equates to 4 classes of 30 pupils.

10.4 The proposal in last years consultation document was that no school should have more than 2 age groups in any class. The Primary Headteachers Working group has developed a staged approach that ensures that support is provided within bands to ensure schools have the ability to have classes that are viable educationally whilst not having to mix key stage pupils.

10.5 The following table illustrates the bands that the Headteacher working group have proposed. The table shows the thresholds that schools would be supported to, if they were smaller than any of the thresholds.

10.6 If a school had fewer pupils than the thresholds in the above table, support would be provided at a rate equivalent to the teaching cost per pupil for every pupil below the threshold. A set of examples is shown in Appendix E for different sizes and types of school.

10.7 There are of course difficulties in using bands of support in this way. Schools will observe fluctuating pupil numbers from year to year and as a result move from one band to another, giving substantially different levels of support. To combat these "cliff edges" we plan to use a 3 year rolling average of pupil numbers to ensure that the support changes in line with a sustained change in pupil numbers.

10.8 A small secondary school could be defined as one with fewer than four forms of entry. Using the class sizes from the ALR model, this means 108 to a year group, or 540 per school (11 - 16 pupils).

10.9 The allocation per pupil below the thresholds would be based on the average cost of a teacher divided by the basic class size assumption in the ALR model. For secondary schools, the allocation per pupil below small could be £1048.73. For primaries it could be £1050.49. The figures shown have been calculated using the current teacher costs (May2002 prices).

10.10 As discussed in section 8 of this consultation the headteacher working group felt there should be a minimum resource made available to smaller schools to allow them to operate efficiently.

10.11 The minimum requirements were

10.12 With these minimum thresholds further support is required for small schools below the following pupil numbers:

10.13 These thresholds have been proposed, to reflect the methodology set out under support staff (section 8). A primary school of 120 pupils would generate sufficient resources under section 8 to meet the minimum requirements set out in 10.11 above. Therefore schools with fewer pupil numbers require additional support to achieve the minimum requirements.

10.14 The values attached to the protection in order to support the schools to the minimum have been calculated at £105.06 per pupil below the threshold for Primary schools and £31.18 per pupil below the threshold for Secondary schools. These values have been calculated from the hourly rates for staff in these posts.

Questions for consultation

Q10) Do you agree with the protection proposals for teacher support?

Q11) Do you agree with the use of a 3 year rolling average of pupil numbers?

Q12) Do you agree with the protection proposals for support staff?

11.Premises Factors

11.1 In previous years, premises costs have been funded through a factor that has been based on the floor area of the school.

11.2 Two years ago, following consultation, a change was made to the allocation factor introducing the pupil numbers of the school into the factor.

11.3 For 2001/2 the first stage of that change was introduced and schools are currently funded 75% by floor area and 25% by pupil numbers. In modelling the proposal for 2003/4, the change to 50% funded by floor area and 50% by pupil numbers has been brought forward.

11.4 Additionally, in looking at the amount funded through the premises factors the headteacher working group felt that they did not represent the actual costs of maintaining and running the school sites at present. The quantum (total sum allocated) used in the premises factors has therefore been amended to reflect the actual costs incurred by schools on premises issues.

11.5 The resultant funding that would be allocated to schools would be as follows :

Questions for consultation

Q13) Do you agree with movement funding premises costs by 50% floor area and 50% pupil numbers?

Q14) Do you agree using current expenditure as an estimate of need to spend on premises issues?

11 Lump Sums

11.1 Lump sum allocations have always been a factor in LM Schemes since their introduction in 1990. Section 7 of this document on Management Time is in fact a set of lump sums that reflect an equal allocation for schools of a similar size.

11.2 In the current financial year there are lump sums in schools of £13,056 for Primary schools, and £6,239 for Secondary schools.

11.3 12.1above, refers to lump sums that have been included in the new model under management time. There are however other costs that are incurred by all schools and therefore are best suited to be funded through a fixed allocation per school irrespective of size. Some examples of these are

12.4 The allocation of a lump sum would be calculated using the anticipated minimum costs of each of these items, which has been estimated at £18,679 for Primary and £17,400 for Secondary. Appendix F illustrates in detail those factors and their funding values that we are proposing.

Questions for consultation

Q15) Do you agree that funding for the above issues should be funded through a lump sum factor?

13. Social Deprivation-Additional Educational Needs(AEN)

13.1 This factor supports those schools with significant proportions of pupils with entitlement to Free School Meals and has been unchanged for many years.

13.2 The factor utilises thresholds set at 25% for primary and 12% for secondary. All schools with greater numbers than these thresholds receive support for the pupils above the threshold.

13.3 During the last five years the numbers of pupils entitled to free schools meals has fallen in line with unemployment. This has resulted in some schools seeing their percentage of pupils entitled to free school meals fall below the threshold. In fact some schools move in and out of the threshold year on year.

13.4 The proposal is to remove the "cliff edge" that exists with a single threshold and introduce further lower thresholds at 20% and 15% for primary schools. No amendments are proposed for secondary schools.

13.5 The proposal will weight the pupil allocations depending on the band in which the school falls and support schools with higher percentage levels of free school meals with higher weightings.

13.6 The following table illustrates the weightings being proposed.

13.7 The results of this factor change are shown in Appendix G and give several new schools additional resources, whilst reducing the allocations of some others. These results are dependent on the total sum available for distribution.

13.8 The total sum allocated under this factor is £273,202 in the primary sector and £162,800 in the secondary sector. This sum has diminished over the past few years as the numbers of pupils with free school meals has reduced.

13.9 If the sum allocated in 1999/2000 had been inflated in line with general inflation in school budgets the sum would have been £ 347,710 and £198,331 in the primary and secondary sectors respectively.

13.10 The proposal set out above spreads the resource available more thinly amongst more schools. It may be sensible to reinstate the total resource back to its real terms level of 1999/2000. The increase in resources would either be from the targeting of new money or from a redistribution from other factors in the formula. Your views on this issue are sought.

Questions for consultation

Q16) Should the threshold for Social Deprivation in the primary sector be changed?

Q17) Are the weightings for the different threshold appropriate?

Q18) Should a lump sum be introduced?

Q19) Should the total quantum be increased from current levels, and if so how should the increase be resourced?

14. Split Site Factor

14.1 Last year a small amendment was made to the split site factor for secondary schools, giving an additional resource to one school. This allocation an interim payment in lieu of a detailed review of the factor.

14.2 The split site factor is currently paid to 2 secondary schools and 3 primary schools with values ranging from £7,238 to £61,186.

14.3 The factor is paid to these schools because they have been deemed to incur additional costs compared to other schools due to the complexities of running a school over more than one site. In some schools this is obvious where there are separate buildings over a mile apart. In others, it is less clear with separate buildings on a very large site.

14.4 Our current definition of a split site is "a school where part of the teaching accommodation (buildings) is outside the curtilage of the school site and is separated from the rest of the school by a traffic thoroughfare."

14.5 It is proposed that the following amended definition of a split site is introduced "a primary school where part of the school accommodation (buildings) is outside the curtilage of the school site and pupils would require escorting to those buildings."

and

14.6 Once we have established a split site factor definition we then have to allocate resources to it. The exact costs of maintaining a school on separate sites is difficult to assess as individual schools make suggestions as to the impact and the need for additional resources. We have therefore canvassed other LEAs to assess the type and size of allocation that is provided to schools with split sites.

14.7 From the analysis of other LEA allocation for schools on split sites we see no reason to change the primary factor value.

14.8 With regard to secondary we propose to establish 2 levels of allocation. One for where a split site incurs no or little transport costs (eg. where the second site is relatively close to the main school building), and one where the second site is over ½ a mile away thus incurring transport costs. The values we propose to introduce are:-

14.9 This proposal would increase the value for a split site for Hayesfield school to £100,000. The school currently receives £61,186 as a split site factor.

Questions for consultation

Q20) Do you agree with the new definition of a split site?

Q21) Do you agree to the increase in the allocation for split sites in the secondary sector?

Q22) Do you agree that the primary allocation should remain unchanged?

15. Other School Specific Factors

15.1 As part of this review there are several factors that have not been specifically researched and analysed. These factors are :

15.2 Whilst some of these factors have been assessed in prior years, some have not been changed since the inception of LMS. Some factors would need to be reassessed in future years based on direction from the DfES, particularly the social deprivation factor.

15.3 It is intended to revisit some of these factors next year, but for this model the factors will be included as they are currently calculated in the current formula.

15.4 Additionally, there are currently six Special Needs Units/Resource Bases attached to mainstream schools. These are, at primary level, an infant nurture unit, junior behaviour unit, resource base for hearing impaired pupils and centre for pupils with autistic spectrum disorder. At secondary level there is a resource base for visually impaired pupils and resource base for pupils with language and communication difficulties. A review of the funding and provision at these bases is currently being undertaken, and there is evidence that some host schools are subsidising the units/resource base funding from their mainstream delegated budgets. As these units/resource bases are making provision for pupils from across the LEA, it is proposed that their funding should be at true cost based on the level of provision agreed from time to time with the LEA as part of their Service Level Agreement.

15.5 It is proposed that as the above factors have not been reviewed in the same way as the rest of the factors within the model it is proposed that they excluded from any re-scaling that would occur. Whilst this pre-empts the second part of the consultation for primary schools it may impact on secondary schools from 2003/4.

Secondary Schools Only

Q23) Do you agree with excluding non-reviewed items from the re-scaling process for 2003/4?

16. Summary

16.1 The above factors form the basis of a funding model. Wherever possible the individual factors will be translated into Age Weighted Pupil Units (AWPU), Lump sums or more specialised factors similar to those in the current formula.

16.2 The total costs of the model are shown in Appendix H and I for primary and secondary schools respectively. These appendices show for each school the total resources that the proposed model would generate.

16.3 The result of developing the model in the way described throughout this consultation would be that the total costs of the model would be significantly higher than current resources.

16.4 What we are asking at present is what is your opinion on the individual factors, do they match your expectation of delivering resources to pupils, do they reflect the differing needs of different sizes of schools and the communities they serve.

16.5 As stated earlier we will be consulting on the methodology of implementing the model at a later date. That consultation will occur if this proposed model is acceptable to schools in terms of the principles set out in section 3.

16.6 As stated on page 7 there will not be enough resources to support the full cost of the model. It will therefore be necessary to scale down each of the factors to the resources available.

16.7 We will highlight the differing methods available for the re-scaling process in the second consultation but for exemplification purposes the model as calculated requires an additional £12.85M, or 22.4% of resources from that currently available. This is split between primary and secondary as follows.

17. Transitional Adjustments

17.1 As stated at the outset of this consultation the Primary Headteacher working group propose that schools should be protected to the resources they would receive from the current formula until the full consultation is complete. This will require that transitional protection would be required for approximately half of all primary and secondary schools.

17.2 It will be necessary to revisit the issue of transitional adjustments if the model is accepted. The second consultation will address the issue further.

17.3 We may however wish to press ahead with the model in the secondary sector. During the 2001 consultation there was limited concern from within the secondary sector and therefore ask whether secondary schools would prefer to press ahead with the new model (described above)

17.4 If secondary schools wished to move ahead with the new model, re-scaling would have to take place. A description of the re-scaling methodology and the outcome compared to current formula allocations is shown in AppendixJ.

17.5 If the new model were to be introduced for secondary schools, transitional adjustments may be necessary to protect some schools from dramatic budget changes. We propose to adjust schools to their new formula allocations equally over a given time period. Appendix K shows the adjustments necessary for a 3 and 5 year timeframe.

Questions for consultation

Q24) Do you agree that protection should be applied to all schools whilst the consultation is ongoing?

Secondary Schools Only

Q25) Would secondary schools prefer to implement the new model from 2003/4?

Q26) Should we use a 3 or 5 year timeframe for adjusting to the new formula

17. Infant Class Size Funding

17.6 The national funding arrangements for infant class size is due to change with effect from September 2003. The DfES has directed that from this date the LEA MUST allocate funding, for this legislation, through a formulaic approach.

17.7 Under the current system the LEA allocates funding to schools through a bid system based on need. This approach takes account of issues like cross phasing and mixed classes. Under a formulaic approach this would not be possible to introduce without the formula becoming extremely complicated.

17.8 It is proposed that the funding should be allocated to all schools that have KS1 pupils on the following basis:

17.9 The implementation of these proposals would commence from September 2003, as the current grant funding mechanism would be continued for the remainder of the 2002/3 academic year. Schools should be aware that this factor will have to be introduced 2003/4 even if the rest of the new model is unacceptable. There has to be a replacement for the current grant mechanism. (See Appendix L)

17.10 In future years it is envisaged that this factor would be restricted to schools with more than 120 pupils. This is necessary to avoid a duplication of funding for some smaller schools who would be in receipt of curriculum protection as described in section 10.

17.11 The curriculum protection factor provides support for schools who need to establish an additional class due to the numbers of pupils in their school. This support is provided up to 4 classes, after which it is envisaged that the Infant Class size Factor described above would be engaged.

Questions for consultation

Q27) Do you agree with the introduction of the formula for Infant Class Size Grant described above?

Q28) Do you agree with limiting the formula to schools greater than 120 pupils in future years?

19. DELEGATION OF MAINSTREAM STATEMENT FUNDING

Background

19.1 When pupils with Statements of Special Educational Needs are placed in mainstream schools a tariff payment is made to the school according to how the pupil is plotted on the SEN Matrix. This payment is in addition to the SEN funding from the LMS formula, and is meant to provide a top-up to enable the school to make the provision as specified on the Statement. It is calculated in units, each currently worth £61.

19.2 Currently (September 2002) this LEA maintains 814 statements for pupils attending schools or units as shown in the following table. Matrix payments do not apply to special school or most unit placements.

The distribution of pupils with statements in mainstream schools, the total units and value of those units is summarised below.

19.3 Although there are more pupils with statements in secondary schools, the total value of those statements is slightly less, as there are relatively fewer very high cost pupils. Proportionally more of the high need, high cost pupils are placed in special schools at secondary level. For both phases, the majority of pupils have total matrix units allocated within the lower ranges, as shown on the following two charts.

19.4 Previously the payment of matrix funding to schools was classed as centrally allocated, devolved funding. From April 2002 the `technical delegation' of mainstream statement funding has been agreed by Education Committee and is now in place for all pupils with statements in mainstream schools. This makes no change to the amounts of money received by schools or to the way the money is allocated, through a statutory assessment and maintenance of a statement.

Proposals

19.5 The next step is to consider the development of a system that delivers funding to schools whilst avoiding the considerable bureaucracy surrounding the assessment for, and maintenance of statements. It is not best value to tie up school and LEA resources in statutory assessments and formal reviews in order to deliver perhaps as little as £1,400 a year to a school for the pupil. The Audit Commission has estimated the administrative costs to schools and LEAs of undertaking a statutory assessment to be in the region of £2,500.

19.6 In line with DfES advice a system should be developed to predict the likely distribution of lower cost, high incidence statements and deliver the funding directly to schools.

19.7 In preliminary discussion the LMS Review Group has agreed the following principles for the possible delegation of some mainstream statement funding:

19.8 The scheme should:

Q SEN1) Do you agree with the proposal to develop a scheme for delegating the funding for some mainstream statements to schools?

Q SEN2) Do you agree with the Principles for possible delegation as stated above?

19.9 Two major models are employed or under consideration in LEAs - audit or formula. An audit system involves schools identifying individual pupils, quantifying need and meeting with or without LEA staff for extensive moderation. Statementing is itself a kind of audit system. An audit system is heavy on time for school and possibly LEA staff, and continues to be based on tying funds to individual pupils, with the risks of waiting for failure, and consequent perverse incentives. It is recommended that this LEA does not pursue an audit system, and headteachers have not expressed support for one.

19.10 In developing formulae to reflect levels of educational need using existing data, some LEAs have used schools' output measures, such as National Curriculum tests and public examination results. Whilst the use of this `output' data has some attraction in terms of parallels with the school improvement agenda, it does not avoid the issue of rewarding failure, or perverse incentives. There is certainly no financial incentive for schools to raise standards for their lower attaining pupils.

19.11 Proxy measures, typically free meal entitlement, and more recently postcodes, can be used to predict SEN levels in schools, as can straightforward school numbers. Bath and North East Somerset still funds some schools for `additional educational needs' on the basis of free meals entitlement, but this is not seen as an accurate reflection of special educational needs in the LEA's schools overall.

19.12 Discussion with heads has indicated potential support for using measures of pupil intake for predicting levels of need. This could be combined with other proxy measures such as free meals. In Bath and North East Somerset there exists entry data for all primary schools in the form of the Avon Reception Entry Assessment. This has been moderated in all schools from September 2001. End of Key Stage 1 data is available for all pupils in Key Stage 2 schools. The data has been more difficult to obtain for secondary schools and will require further work, but should become more automatic with the adoption of UPNs and the successful implementation of PLASC.

Q SEN 3) Do you agree that, if funding for some mainstream statements is delegated, it should be calculated using existing entry data rather than by an additional audit?

19.13 A decision would need to be made as to what types of SEN to fund without statements. One option would be to target the very high incidence, relatively low-cost statements, i.e. Bands 3, 4 and possibly 5 academic on the Matrix, but would continue to fund low incidence medical, physical and sensory needs from statements, together with severe emotional and behavioural difficulties, autism etc. This might be seen as the safer option, but would involve less money becoming available to distribute. (Option 1)

19.14 An alternative approach would be to cease all funding for statements of less than, say, 100 units and distribute the money by agreed formula. Only the highest cost pupils would then be funded by statemented provision. This would release more funds and result in a greater freeing up of administrative resources. (Option 2)

Q SEN 4) If funding for some mainstream statements is delegated, should it be initially for a few, relatively well-defined types of need (Option 1) or for most types of need up to a defined limit, to be consulted on further (Option 2)?

19.15 Finally, for the purposes of this consultation, a decision would need to be made as to whether to continue to issue and maintain statements for pupils for whom the funding were no longer directly linked to the statement. To continue to undertake statutory assessments, issue statements and formally review them annually would be to continue to tie up resources in bureaucracy both in schools and in the LEA. Some parents and schools might, however, like to see the protection of a statement. Statements could continue to be issued or maintained, or the criteria could be changed so that only statements are issued and maintained for the high need pupils for whom funding still needs to be linked to the statement.

Q SEN 5) Do you agree that, if funding for pupils with higher incidence SEN is no longer linked to statements, then criteria should be changed so that statements are not issued or maintained for those pupils?

Next Steps

19.16 Depending upon the results of this consultation the next step would be to develop one or more models showing in detail the amount of money to be distributed, the formulae to be used, and notional effects on schools. This would then be the subject of further consultation before implementation.