The School Finance (England) Regulations 2006

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"the 1996 Act" means the Education Act 1996[6];

"the 1998 Act" means the School Standards and Framework Act 1998;

"the 2000 Act" means the Learning and Skills Act 2000[7];

"the 2002 Act" means the Education Act 2002[8];

"the 2005 Act" means the Education Act 2005[9];

"the 2003 (No. 2) Regulations" means the Financing of Maintained Schools (England) (No. 2) Regulations 2003[10];

"the 2004 Regulations" means the Financing of Maintained Schools (England) Regulations 2004[11];

"the Budget Regulations" means the LEA Budget, Schools Budget and Individual Schools Budget (England) Regulations 2004[12]; and

The "Amended Budget Regulations" means the LEA Budget, Schools Budget and Individual Schools Budget (Amendment) (England) Regulations 2005[13];

"admission number" means the number of pupils in any relevant age group intended to be admitted in any school year as determined by an admission authority in accordance with section 89A of the 1998 Act[14];

"capital expenditure" means expenditure of a local authority which falls to be capitalised in accordance with proper practices, or expenditure which shall be treated as capital expenditure by virtue of any regulations or directions made under section 16 of the Local Government Act 2003[15];

"central expenditure" means the total amount deducted by a local education authority from their schools budget;

"CERA" means capital expenditure which an authority expect to charge to a revenue account of the authority within the meaning of section 22 of the Local Government Act 2003[16];

a "combined service" is a service funded partly from central expenditure, and partly from other budgets of the authority or contributions from other bodies;

the "Dedicated Schools Grant" is the grant of that name paid to a local education authority by the Secretary of State under section 14 of the 2002 Act;

"expenditure on the school specific contingency" is expenditure—

(a) it would not be reasonable to expect a governing body to meet from the school's budget share;

(b) on increases to a school's budget share to which the school is entitled by virtue of the authority's formula or the determination of budget shares under the authority of the schools forum or the Secretary of State; and

(c) on the correction of errors;

"funding period 1" is the financial year beginning on 1st April 2006;

"funding period 2" is the financial year beginning on 1st April 2007;

"key stage 4" means the fourth key stage of the National Curriculum for England comprising core and foundation subjects, and other elements as described in section 85 of the 2002 Act, as amended by any Order made by the Secretary of State under subsection (6)(d) of that section;

a "local education authority's formula" has the meaning in regulation 9;

the "LSC" is the Learning and Skills Council for England[17];

a reference (however framed) to a maintained nursery school, a community, foundation or voluntary school or a community or foundation special school includes a proposed school which on implementation of proposals for the establishment of the school will be such a school, and which has a temporary governing body;

a reference to a particular class or description of expenditure in relation to maintained schools and to pupils registered at such schools shall include any expenditure of that class or description as the authority may incur in relation to Academies[18], and to pupils registered at Academies;

a "Performance Reward Grant" is the grant of that name paid under section 31 of the Local Government Act 2003 to reward local authorities for improvements in local services;

"PFI scheme unitary payment" means a charge payable by a local education authority under a private finance transaction as defined in regulation 16 of the Local Authorities (Capital Finance) Regulations 1997[19];

"primary or secondary school" means a primary or secondary school which is a community, foundation, voluntary or maintained nursery school;

"proper practices" means those accounting practices which a local authority are required to follow by virtue of any enactment, or which, so far as they are consistent with any such enactment are generally regarded, whether by reference to any generally recognised published code or otherwise, as proper accounting practices to be followed in the keeping of the accounts of local authorities, either generally or of the description concerned[20];

"prudential borrowing" means borrowing money for the purpose of facilitating the modernisation and rationalisation of the school estate, where the revenue savings that will be achieved are equal to or more than the expenditure that will be incurred in borrowing the money;

"School Improvement Partner" means a person employed by, or engaged to work for, a local education authority in accordance with the programme of that name;

"School Standards Grant" is the grant of that name paid to a local education authority by the Secretary of State under section 14 of the 2002 Act;

"school year" means the period beginning with the first school term to begin after July and ending with the beginning of the first such term to begin after the following July, in accordance with the Education (School Day and School Year) (England) Regulations 1999[21];

"SEN transport costs", for the purposes of paragraph 35(e) of Schedule 2, means the costs of home to school transport for pupils with special educational needs in schools maintained by the authority, where the revenue savings that will be achieved by placing such children in a school maintained by the authority are equal to, or greater than, the cost of such transport;

"specific grant" means grant, other than the Dedicated Schools Grant and any grant made by the LSC under section 7 of the 2000 Act, paid to a local authority under conditions which impose restrictions on the particular purposes for which the grant may be used;

"summer term" means the third term of the school year;

"Threshold and Performance Pay Grant" means a sum of money paid under that name to a local education authority by the Secretary of State under section 14 of the 2002 Act;

"termination of employment costs", for the purposes of paragraph 35(b) of Schedule 2, means expenditure in respect of the dismissal or premature retirement of, or for the purpose of securing the resignation of, any person employed in a maintained school where—

(a) the dismissal, premature retirement or resignation occurs after the beginning of funding period 1, and

(b) the revenue savings that will be achieved are equal to or greater than the costs incurred;

"vocational education" means education provided to pupils aged 14–16 years at school or elsewhere which prepares them for a qualification for a particular profession, trade or employment, or which provides the necessary training and skills for such a profession or employment.

Revocation of previous Regulations
     2. The 2003 (No. 2) Regulations, the Budget Regulations, and the Amended Budget Regulations are revoked on 1st April 2006.

Schools Budget
     5. —(1) The classes or descriptions of local education authority expenditure specified in sub-paragraphs (a) and (b) are prescribed for the purposes of section 45A(2) of the 1998 Act and the determination of a local education authority's schools budget, subject to the exceptions in regulation 6—

(a) expenditure on the provision and maintenance of maintained schools and on the education of pupils registered at maintained schools; and

(b) expenditure on the education of pupils at independent schools, non-maintained special schools[22], pupil referral units, at home or in hospital, and on any other arrangements for the provision of primary and secondary education for pupils otherwise than at schools maintained by a local education authority.

    (2) Where a local education authority operates a combined service for the benefit of pupils referred to in paragraph (1), expenditure referred to in paragraph 35(c) of Schedule 2 is expenditure prescribed for the purposes of section 45A(2) of the 1998 Act and the determination of a local education authority's schools budget, provided that any expenditure incurred is commensurate with the educational benefit to those pupils.

Exceptions
     6. A local education authority's LEA budget or schools budget shall not include the following classes or descriptions of expenditure—

(a) capital expenditure other than CERA;

(b) expenditure on capital financing other than expenditure incurred on prudential borrowing;

(c) expenditure for the purposes of section 26 of the Road Traffic Regulation Act 1984[23] (arrangements for patrolling school crossings); and

(d) expenditure met by the local education authority under section 51A of the 1998 Act (community purposes).

Determination of the individual schools budget for funding periods 1 and 2
     7. —(1) Subject to paragraphs (2) and (3), not later than 31st March 2006, a local education authority may deduct from their schools budget any or all of the classes or descriptions of planned expenditure set out in Schedule 2 (the "central expenditure"), in order to arrive at their individual schools budgets for funding periods 1 and 2.

    (2) Any deductions made under paragraph (1) must be made in accordance with the provisions of Schedule 3 (Maximum Increase in Central Expenditure), unless the authority has obtained the approval of their schools forum or the Secretary of State under regulation 13 to vary the limit imposed by that Schedule.

    (3) In deducting any of the classes or descriptions of planned expenditure referred to in paragraph 35 of Schedule 2, a local education authority must not exceed the limit or exclude the condition referred to in that paragraph, unless they have obtained the approval of their schools forum or the Secretary of State under regulation 13 to vary that limit, or exclude that condition.

    (4) References to planned expenditure in this regulation are references to that expenditure net of—

(a) all related specific grants;

(b) all related fees, charges and income; and

(c) any funding received from the Secretary of State in respect of PFI scheme unitary payments.

Consultation
     8. —(1) In initially determining schools' budget shares for funding periods 1 and 2, a local education authority may make changes to the formula they have used in the financial year beginning 1st April 2005.

    (2) A local education authority must consult their schools forum about any proposed changes under paragraph (1), in relation to the factors and criteria taken into account, and the methods, principles and rules adopted.

    (3) Paragraph (2) shall not apply to changes made pursuant to regulation 19 (sixth form funding) or 23 (permanently excluded pupils).

Formula for determination of budget shares
     9. —(1) A local education authority must determine before the beginning of funding period 1, and after the consultation referred to in regulation 8, the formulae which they will use to determine and redetermine schools' budget shares in funding periods 1 and 2, having regard to the factors, criteria and requirements set out in Part 3.

    (2) A local education authority may not make changes to their formula for funding period 1 after the beginning of that funding period.

    (3) A local education authority may make changes to the formula they will use for funding period 2 after the beginning of funding period 1, provided any such change—

(a) is made before the beginning of funding period 2, and

(b) is approved by their schools forum or the Secretary of State under regulation 25 (additional arrangements).

    (4) Any formulae determined by a local education authority under paragraph (1) may include different factors, criteria and requirements for different funding periods.

    (5) A local education authority may not use factors or criteria in their formulae under this Part which make an allowance, in whole or in part, for any amount allocated to a school from any School Standards Grant paid to the authority.

    (6) Except as provided by paragraph (3), and regulation 25 (additional arrangements), a local education authority must use the formulae determined under paragraph (1) in all determinations and redeterminations of budget shares in respect of funding periods 1 and 2.

Initial determination of allocation of schools' budget shares for funding periods 1 and 2
     10. Not later than 31st March 2006, a local education authority must—

(a) initially determine the allocation of all their individual schools budget as the budget shares of the schools which they maintain for funding periods 1 and 2 in accordance with Part 3 of these Regulations, and

(b) give notice of each school's budget share for funding period 2 to the governing bodies of the schools which they maintain.

unless their schools forum or the Secretary of State enable those limits to be varied or that condition to be excluded under regulation 13.

    (5) Where a local education authority makes a redetermination under paragraph (1), they must give notice of that redetermination to the governing bodies of the schools which they maintain.

Redetermination of allocation of budget shares for funding period 2
     12. Not later than 31st March 2007, a local education authority must redetermine any allocation of schools' budget shares under regulation 10(a) for funding period 2 in accordance with Part 3 of these Regulations.

(a) a schools forum does not authorise the making of deductions, variation of limits, or exclusion of conditions referred to in paragraph (1), or

(b) a local education authority is not required to establish a schools forum for their area[24],

the authority may make an application to the Secretary of State for such authorisation, variation or exclusion.

    (9) A local education authority may adjust the number of registered pupils used to determine or redetermine a school's budget share where it is appropriate to do so in order to take into account, wholly or partly, the permanent exclusion of a pupil from the school or the admission of a pupil following his permanent exclusion from another school maintained by a local education authority.

Places
     15. —(1) In determining and redetermining budget shares for funding periods 1 and 2, a local education authority may take into account the number of places they wish to fund—

(a) in special schools, or

(b) in—


(i) maintained nursery schools,

(ii) primary or secondary schools with places which the authority recognise as reserved for children with special educational needs,

(iii) nursery classes, or

(iv) schools with boarding accommodation.

    (2) In determining and redetermining budget shares for funding periods 1 and 2, a local education authority may take into account the nature of any special educational needs in question when funding places at special schools or places reserved for children with special educational needs in primary and secondary schools.

    (3) A local education authority must provide that, if any places are taken into account in accordance with paragraph (1)(a), the number must be no fewer than the number of registered pupils at the school on the relevant date in regulation 14(6).

    (4) For the purpose of determining budget shares for funding period 2 under regulation 10, a local education authority must estimate the number of places they will fund under paragraph (1) for that funding period.

Differential funding
     16. —(1) For the purpose of initially determining budget shares in respect of funding periods 1 and 2, a local education authority must use factors or criteria which differentiate between different categories or descriptions of schools in so far as the functions of the governing bodies of those schools justify such differentiation, but may not otherwise do so except as required or expressly permitted by these Regulations.

    (2) A local education authority must use factors or criteria which differentiate between a school and other schools of the same category or description if such differentiation is justified by reference to the choice that that school's governing body have made as to the inclusion in their school's budget share of funding in respect of expenditure of the kinds referred to in paragraph 15(a) and (b) (meals), 26 (insurance) or 28 (library services) of Schedule 2.

    (3) A local education authority are not required to use factors or criteria in their formulae which differentiate between maintained nursery schools, primary schools, secondary schools, special schools, or schools whose pupils are in different age ranges, but they may do so.

Additional factors or criteria
     17. —(1) Subject to regulation 16 (differential funding), a local education authority may, in determining budget shares in respect of funding periods 1 and 2, take into account in their formulae any or all of the factors or criteria set out in Schedule 4.

    (2) A local education authority must, in determining budget shares for both primary and secondary schools which they maintain, take into account in their formulae a factor or factors based on the incidence of social deprivation among pupils registered at all such schools if they have no factor elsewhere in their formulae which is based on such incidence.

    (3) A factor included in an authority's formula pursuant to paragraph 17 of Schedule 4 (school milk, meals and refreshment) is not, for the purpose of paragraph (2), a factor based on the incidence of social deprivation among pupils registered at a school.

    (4) The factors and criteria set out in Schedule 4 may not be taken into account by a local education authority on the basis of actual or estimated cost unless otherwise stated in that Schedule.

    (5) Where a local education authority take new factors or criteria into account in their formula or delete factors from their formula or determine a formula substantially or wholly different from the previous year, they may make such transitional provision as they consider reasonable.

Minimum funding guarantee
     18. —(1) Subject to regulation 25 (additional arrangements), in determining and redetermining budget shares for all schools maintained by them in respect of funding periods 1 and 2, a local education authority must ensure—

(a) in respect of primary (other than maintained nursery schools) and secondary schools, that an amount equal to the guaranteed funding level is included for each of those funding periods, calculated in accordance with paragraphs 1–4 of Schedule 5;

(b) in respect of special schools, that the formula must provide for an increase in those schools' budget shares for each of those funding periods, calculated in accordance with paragraph 5 of Schedule 5; and

(c) in respect of maintained nursery schools either—


(i) that an amount equal to the guaranteed funding level is included for each of those funding periods, calculated in accordance with paragraphs 1–4 of Schedule 5, or

(ii) that the formula must provide for an increase in those schools' budget shares for each of those funding periods, calculated in accordance with paragraph 5 of that Schedule as if every reference to a special school were a reference to a maintained nursery school, save that the figure of 4% must be used instead of the figure of 3.4% where it occurs in paragraph 5 of that Schedule.

    (2) For the purposes of determining budget shares in respect of funding periods 1 and 2, paragraph (1) does not apply to any school opening during either funding period save in the circumstances set out in paragraph 4 of Schedule 5.

    (3) For the purpose of determining budget shares for funding period 2 under regulation 10, a local education authority must apply the relevant provisions in Schedule 5 using estimates of—

(a) the number of registered pupils in schools funded on the basis of pupil numbers in accordance with regulation 14(5), or

(b) the number of places they will fund in accordance with regulation 15(4).

Sixth form funding
     19. —(1) A local education authority must include in a secondary school's budget share for funding periods 1 and 2 an amount equal to any sum notified to the local education authority by the LSC as being the allocation in respect of that school's sixth form[25].

    (2) A local education authority may, in determining budget shares, use a factor which allocates funding in respect of sixth forms.

    (3) A local education authority may, in determining budget shares for schools with sixth forms, reduce the amount payable to each such school under their formula by a sum representing any element which has been duplicated in the LSC's allocation.

    (4) A secondary school's budget share for funding periods 1 and 2 must be redetermined before the end of the relevant funding period where the authority receive a written notification from the LSC of a revised allocation in respect of the sum referred to in paragraph (1).

New, reorganised and closing schools
     20. —(1) A local education authority must include factors or criteria in their formulae which enable them to determine a school's budget share for funding periods 1 and 2 so as to take into account the particular needs of that school in the following cases—

(a) a proposed school;

(b) a school, proposals for the establishment of which have not been fully implemented[26];

(c) a school which is the subject of a prescribed alteration[27];

(d) a school which is to be discontinued;

(e) a school which is to be the subject of a significant change, as determined by the authority.

    (2) In the case of schools falling within sub-paragraph (1)(a), the authority must, in any funding period preceding the funding period in which the school first admits pupils, determine the amount of the budget as an amount which is sufficient to fund the appointment of staff, and purchase any services and goods necessary to enable the school to admit pupils.

    (3) In the case of schools falling within sub-paragraph (1)(c), such factors or criteria may only be used within seven years of the date of implementation of the relevant change to the school.

    (4) For the purposes of these Regulations, proposals for the establishment of a school have been fully implemented when the number of pupils admitted to the school in each age group has, in the opinion of the local education authority, reached—

(a) the number of pupils indicated, when proposals for the establishment of the school were published, as the number of pupils to be admitted to each age group when the proposals were fully implemented; or

(b) if no such number was indicated, such number as the authority may determine.

the local education authority must determine that school's budget share for funding period 1 so as to take into account those differences.

Budget share adjustments in relation to the financial year beginning on 1st April 2005: Non-pupil number factors
     22. —(1) This regulation applies to the extent that a school's budget share for the financial year beginning on 1st April 2005 was determined other than pursuant to regulation 8(1) or (3) of the 2004 Regulations or was determined in accordance with pupil numbers weighted according to special educational needs.

    (2) Where—

(a) there has been a change in the data on the basis of which that determination was made; and

(b) that change was not taken into account in a redetermination of the school's budget share for the financial year beginning on 1st April 2005,

the local education authority may determine that school's budget share for funding period 1 so as to take into account those changes.

Pupils permanently excluded from, or leaving, maintained schools
     23. —(1) Where a pupil is permanently excluded from a school maintained by a local education authority, the authority must redetermine the school's budget share for that funding period in accordance with paragraph (2).

    (2) The school's budget share must be reduced by the amount

    (5) For the purposes of this regulation, the relevant date has the meaning prescribed in regulations made under section 494 of the 1996 Act[28].

    (6) Paragraphs (1) and (2) also apply where pupils have been deleted from the admissions register of a maintained school—

(a) to attend an educational or training establishment other than a maintained school or an independent school, or

(b) to access an education programme provided by a registered charity through the internet.

     6. Expenditure on carrying out the authority's child protection functions under the Children Act 1989[30], functions under section 175 of the 2002 Act, and other functions relating to child protection.

     7. Expenditure incurred in entering into, or subsequently incurred pursuant to, an arrangement under section 31 of the Health Act 1999[31].

     8. Expenditure in providing special medical support for individual pupils in so far as such expenditure is not met by a Primary Care Trust[32], National Health Service Trust[33], NHS foundation trust[34] or Local Health Board[35].

School improvement
     9. Expenditure incurred by the authority in respect of action to support the improvement of standards in the authority's schools, including, in particular—

(a) expenditure incurred in connection with entering into a contract pursuant to a direction under section 63 of the 2002 Act (contracts to obtain services of an advisory nature in respect of schools with serious weaknesses or schools requiring special measures);

(b) expenditure incurred in connection with the exercise of their functions under sections 14 to 17 of the 1998 Act (powers of intervention, appointment of additional governors and suspension of delegated budget in schools causing concern)[36];

(c) expenditure on the appointment and remuneration of interim executive members under section 16A of the 1998 Act[37]; and

(d) expenditure on the employment of School Improvement Partners.

Access to education
     10. Expenditure in relation to the following matters—

(a) management of the authority's capital programme including preparation and review of an asset management plan and negotiation and management of private finance transactions;

(b) planning and managing the supply of school places, including the authority's functions—


(i) in relation to the preparation of any part of the authority's Children and Young People's Plan relating to school organisation[38], and

(ii) in relation to the establishment, alteration or discontinuance of schools pursuant to Chapter II of Part II of the 1998 Act, section 70 of the 2002 Act, or section 113A of, and Schedule 7A to, the 2000 Act;



(c) the authority's functions in relation to the exclusion of pupils from schools, excluding the making of any provision of education to such pupils, but including advice to the parents of an excluded pupil;

(d) school organisation committees;

(e) the authority's functions under section 509 and 509AA to 509AC[39] of the 1996 Act (home-to-school and home-to-college transport); and

(f) the authority's functions under sections 510 and 514 of the 1996 Act (provision and administration of clothing grants and boarding grants), and pursuant to regulations made under section 518(2) of the 1996 Act[40].

     11. Expenditure on the Education Welfare Service[41] and other expenditure arising from the authority's functions under Chapter II of Part VI of the 1996 Act (school attendance).

     12. Expenditure on the provision of support for students under section 1(1) of the Education Act 1962[42] and under section 22 of the Teaching and Higher Education Act 1998[43].

     13. Expenditure on discretionary grants under section 1(6) or 2 of the Education Act 1962 (awards for designated and other courses).

     14. Expenditure on the payment to persons over compulsory school age of educational maintenance allowances[44].

     15. Expenditure on the provision of tuition in music, or on other activities which provide opportunities for pupils to enhance their experience of music.

     16. Expenditure incurred in enabling pupils to enhance their experience of the visual, creative and performing arts other than music.

     17. Expenditure on outdoor education centres, but not including centres wholly or mainly for the provision of organised games, swimming or athletics.

Further education and training for young persons and adults
     18. Expenditure on the provision of education and training and of organised leisure time occupation, and other provision under sections 15A and 15B of the 1996 Act[45].

     19. Expenditure on the provision by the local education authority under sections 15A and 508[46] of the 1996 Act of recreation and social and physical training, and on the authority's provision of services under section 116 of the 2000 Act to encourage and enable the participation by young people in education and training.

Strategic management
     20. Expenditure in their capacity as a local education authority in relation to—

(a) functions of the Chief Education Officer or director of children's services and his personal staff;

(b) planning for the education service as a whole;

(c) functions of the authority under Part I of the Local Government Act 1999[47] (Best Value) and the provision of advice to assist governing bodies in procuring goods and services with a view to securing continuous improvement in the way the functions of those governing bodies are exercised, having regard to a combination of economy, efficiency and effectiveness;

(d) revenue budget preparation; the preparation of information on income and expenditure relating to education, for incorporation into the authority's annual statement of accounts; and the external audit of grant claims and returns relating to education;

(e) administration of grants to the authority (including preparation of applications), functions imposed by or under Chapter IV of Part II of the 1998 Act and, where it is the authority's duty to do so, ensuring payments are made in respect of taxation, national insurance and superannuation contributions;

(f) authorisation and monitoring of—


(i) expenditure which is not met from schools' budget shares; and

(ii) expenditure in respect of schools which do not have delegated budgets,



and all financial administration relating thereto;

(g) the authority's monitoring of compliance with the requirements of their financial scheme prepared under section 48 of the 1998 Act[48], and any other requirements in relation to the provision of community facilities by governing bodies under section 27 of the 2002 Act;

(h) internal audit and other tasks necessary for the discharge of the authority's chief finance officer's responsibilities under section 151 of the Local Government Act 1972[49];

(i) the authority's functions under regulations made under section 44 of the 2002 Act[50];

(j) recruitment, training, continuing professional development, performance management and personnel management of staff who are funded by expenditure not met from schools' budget shares and who are paid for services carried out in relation to those of the authority's functions and services which are referred to in other paragraphs of this Schedule;

(k) investigations which the authority carry out of employees, or potential employees, of the authority, or of governing bodies of schools, or of persons otherwise engaged, or to be engaged, with or without remuneration to work at or for schools;

(l) functions of the authority in relation to local government superannuation which it is not reasonably practicable for another person to carry out, and functions of the authority in relation to the administration of teachers' pensions;

(m) retrospective membership of pension schemes and retrospective elections made in respect of pensions where it would not be appropriate to expect the governing body of a school to meet the cost from the school's budget share;

(n) advice, in accordance with the authority's statutory functions, to governing bodies in relation to staff paid, or to be paid, to work at a school, and advice in relation to the management of all such staff collectively at any individual school ("the school workforce"), including in particular advice with reference to alterations in remuneration, conditions of service and the collective composition and organisation of such school workforce;

(o) determination of conditions of service for non-teaching staff, and advice to schools on the grading of such staff;

(p) the authority's functions regarding the appointment or dismissal of employees;

(q) consultation and functions preparatory to consultation with or by governing bodies, pupils and persons employed at schools or their representatives, or with other interested bodies;

(r) compliance with the authority's duties under the Health and Safety at Work etc. Act 1974[51] and the relevant statutory provisions as defined in section 53(1) of that Act, in so far as compliance cannot reasonably be achieved through tasks delegated to the governing bodies of schools; but including expenditure incurred by the authority in monitoring the performance of such tasks by governing bodies, and where necessary the giving of advice to them;

(s) the investigation and resolution of complaints;

(t) legal services relating to the statutory functions of the authority;

(u) the preparation and review of plans involving collaboration with other local authority services or with public or voluntary bodies;

(v) the preparation, publication, consultation upon and review of a children and young people's plan under the Children and Young People's Plan (England) Regulations 2005 and the provision of (but not the expenditure authorised by), an early years development and childcare partnership under section 119 of the 1998 Act[52];

(w) provision of information to or at the request of the Crown and the provision of other information which the authority are under a duty to make available;

(x) the authority's duties under article 4(2) and (5) of the Race Relations Act 1976 (Statutory Duties) Order 2001[53];

(y) the remittance of fees payable to the General Teaching Council for England by virtue of section 4(4) of the Teaching and Higher Education Act 1998 and the provision of information required by the Council pursuant to regulations[54] made under section 12 of that Act;

(z) the authority's functions pursuant to regulations made under section 12 of the 2002 Act (supervising authorities of companies formed by governing bodies); and

(aa) the authority's functions under the Disability Discrimination Act 1995[55] in so far as compliance cannot reasonably be achieved through tasks delegated to the governing bodies of schools; but including expenditure incurred by the authority in monitoring the performance of such tasks by governing bodies and, where necessary, the giving of advice to them.

     21. Expenditure in pursuance of a binding agreement, where the other party is a local authority, or the other parties include one or more local authorities, in relation to the operation of a facility provided partly but not solely for the use of schools.

     22. Expenditure on establishing and maintaining those electronic computer systems, including data storage, which are intended primarily to maintain linkage between the authority and its schools.

     23. Expenditure on monitoring National Curriculum assessment arrangements required by orders made under section 87 of the 2002 Act.

     24. Expenditure in connection with the authority's functions in relation to the standing advisory council on religious education constituted by the authority under section 390 of the 1996 Act or in the reconsideration and preparation of an agreed syllabus of religious education in accordance with Schedule 31 to the 1996 Act.

     25. Expenditure in respect of the dismissal or premature retirement of, or for the purpose of securing the resignation of, or in respect of acts of discrimination against, any person except to the extent that these costs are chargeable to schools' budget shares or fall within paragraph 35(b) of Schedule 2.

     26. Expenditure in respect of a teacher's emoluments under section 19(9) of the Teaching and Higher Education Act 1998.

     27. Expenditure in respect of the functions of an appropriate body under regulations pursuant to section 19(2)(g) of the Teaching and Higher Education Act 1998[56].

     28. Expenditure on the appointment of governors, the making of instruments of government, the payment of expenses to which governors are entitled and which are not payable from a school's budget share and the provision of information to governors.

     29. Expenditure on making pension payments, other than in respect of staff employed in schools.

     30. Any expenditure on insurance, other than for liability arising in connection with schools or school premises.

     5. Where a pupil falls within paragraph 4(a) or (b), and the cost of the provision specified in the pupil's statement of special educational needs is significantly greater than that for the generality of pupils at the special school, or the cost of pupils in places at the primary or secondary school in question, the amount by which the expenditure incurred in making the provision specified in his statement of special educational needs is greater than that incurred in making provision for a pupil who falls within such generality of pupils.

     6. Expenditure in making the provision specified in a pupil's statement of special educational needs where the pupil falls within paragraph 4(b) but the places which are recognised by the authority as being reserved for children with special educational needs are for such pupils with visual, hearing, speech or language impairments or other communication disorder.

     7. Expenditure in respect of specialist support provided to assist the governing bodies of schools in meeting the particular needs of pupils with statements of special educational needs, or who are within the scope of School Action Plus as described in the Code of Practice[57] issued under section 313 of the 1996 Act (such expenditure that it would be inappropriate to expect to be met from the school's budget share).

     8. Expenditure for purposes connected with the encouragement of—

(a) collaboration between special schools and primary and secondary schools to enable children with special educational needs to engage in activities at primary and secondary schools;

(b) the education of children with special educational needs at primary and secondary schools; and

(c) the engagement of children with special educational needs at primary and secondary schools in activities at the school with children who do not have special educational needs (being expenditure that the authority deem inappropriate to be met from the school's budget share).

     9. Expenditure in relation to education otherwise than at school under section 19 of the 1996 Act or in relation to a pupil referral unit as defined in that section.

     10. Expenditure (other than expenditure referred to in Schedule 1 or any other paragraph of this Schedule) incurred on services relating to the education of children with behavioural difficulties, and on other activities for the purpose of avoiding the exclusion of pupils from schools[58].

     11. Expenditure on the payment of fees in respect of pupils with special educational needs—

(a) at independent schools or at special schools which are not maintained by a local education authority under section 348 of the 1996 Act; or

(b) at an institution outside England and Wales under section 320 of the 1996 Act.

     12. Expenditure on payments to another local education authority pursuant to section 493 or 494 of the 1996 Act, or section 207 of the 2002 Act (recoupment between authorities).

Access to education
     13. Expenditure on the administration of the system of admissions of pupils to schools (including expenditure incurred in carrying out consultations under section 89(2) of the 1998 Act, and in establishing, maintaining and consulting representative bodies for the purposes of admissions), and in relation to appeals, provided that, except where the governing body have agreed with the authority that this proviso should not apply to them, or where the authority are satisfied that factors or criteria in their formula already make suitable provision, the authority must—

(a) allocate to each governing body who are an admission authority, as defined in section 88(1) of the 1998 Act, an amount determined by the authority as that reasonably required by the governing body to meet expenditure incurred in connection with the system of admissions of pupils to the school and any appeals, taking into account any factors or criteria in their formula which relate to admission arrangements, and

(b) allow the governing body to determine how such amount should be spent for that purpose.

     14. Expenditure incurred in connection with the authority's functions under section 85A of the 1998 Act (the establishment and maintenance of, and consultation with, admission forums).

     15. Expenditure on milk and meals pursuant to section 512, 512ZA, 512ZB or 513 of the 1996 Act falling within the following categories—

(a) expenditure in respect of meals at any primary or special school which is not a former grant-maintained or grant-maintained special school, unless the governing body have elected to receive funding for meals as part of their school's budget share;

(b) expenditure in respect of meals at any former grant-maintained primary or special school where the governing body have elected not to receive funding for meals as part of their school's budget share;

(c) expenditure in respect of milk at any school which is not a former grant-maintained or grant-maintained special school;

(d) expenditure in respect of milk at any former grant-maintained or grant-maintained special school where the provision of that milk attracts a subsidy from the European Union; and

(e) expenditure in respect of milk or meals at any pupil referral unit.

     16. Expenditure on the repair and maintenance of a school kitchen where expenditure on meals in relation to the school concerned is deducted from the authority's schools budget pursuant to paragraph 15.

     17. Expenditure on determining the eligibility of a pupil for free school meals.

     18. Expenditure pursuant to section 18 of the 1996 Act in making any grant or other payment in respect of fees or expenses (of whatever nature) which are payable in connection with the attendance of pupils at a school which is not maintained by any local education authority.

Staff
     19. Expenditure in making payments to, or in providing a temporary replacement for, a woman on maternity leave or to a person on adoption leave.

     20. Expenditure in making payments to, or in providing a temporary replacement for, persons—

(a) carrying out trade union duties or undergoing training under section 168 of the Trade Union and Labour Relations (Consolidation) Act 1992[59];

(b) taking part in trade union activities under section 170 of the Trade Union and Labour Relations (Consolidation) Act 1992;

(c) performing public duties under section 50 of the Employment Rights Act 1996[60];

(d) undertaking jury service;

(e) who are safety representatives under the Safety Representatives and Safety Committee Regulations 1977[61];

(f) who are representatives of employee safety under the Health and Safety (Consultation with Employees) Regulations 1996[62];

(g) who are employee representatives for the purposes of Chapter II of Part IV of the Trade Union and Labour Relations (Consolidation) Act 1992, as defined in section 196 of that Act or regulations 10 and 11 of the Transfer of Undertakings (Protection of Employment) Regulations 1981 as defined in regulation 11A of those Regulations[63];

(h) taking time off for ante-natal care under section 55 of the Employment Rights Act 1996;

(i) undertaking duties as members of the reserve forces as defined in section 1(2) of the Reserve Forces Act 1996[64];

(j) suspended from working at a school;

(k) who are members of the General Teaching Council for England or a committee thereof; or

(l) who are appointed learning representatives of trade unions, in order for them to analyse training requirements or to provide or promote training opportunities, and to carry out consultative or preparatory work in connection with such functions.

     21. Expenditure on Advanced Skills Teachers undertaking outreach work in schools other than that in which they are normally based[65].

     22. Expenditure in making payments to, or in providing a temporary replacement for, a person who is seconded on a full-time basis for a period of three months or more other than to a local education authority or the governing body of a school.

     23. Expenditure in making payments to, or in providing a temporary replacement for, persons who have been continuously absent from work because of illness for 21 days or more.

     24. Expenditure, not falling within Schedule 1, in relation to the recruitment, training, continuing professional development, performance management and personnel management of staff who are funded by expenditure not met from schools' budget shares.

Other Expenditure
     25. Expenditure in connection with the provision of nursery education, except where such provision is made at a maintained school.

     26. Expenditure on insurance in respect of liability arising in connection with schools and school premises except to the extent that governing bodies have elected to receive funding for insurance as part of their schools' budget shares.

     27. Expenditure on services to schools provided by museums and galleries.

     28. Expenditure on library services for primary and special schools, other than for schools which received funding for library services as part of their budget shares for the financial year beginning on 1st April 1999 to the extent that their governing bodies have elected to receive funding for those same library services as part of their schools' budget shares for the financial year beginning on 1st April 2006, and provided that the authority—

(a) notify the governing body of each school, which does not receive funding for library services in its budget share, of the share of the amount retained by the authority in respect of library services which is attributable to that school; and

(b) allow the governing body to determine whether expenditure retained by the authority in respect of their school is to be spent by the authority in providing library services to the school themselves or in procuring that library services are provided to the school by another local authority.

     29. Expenditure on licence fees or subscriptions paid on behalf of schools.

     30. Expenditure incurred in connection with the authority's functions under section 47A[66] of the 1998 Act (the establishment and maintenance of, and consultation with, schools forums).

     31. Expenditure on allocations to the governing body of a school in financial difficulty provided that the authority consult the schools forum on their arrangements for the implementation of such support.

     32. Expenditure for purposes not falling within any other paragraph of this Schedule, provided that the expenditure does not amount in total to more than 0.1 per cent. of the authority's schools budget.

     33. CERA incurred for purposes not falling within any other paragraph of this Schedule or Schedule 1.

     34. Expenditure on vocational education of pupils at key stage 4 of the National Curriculum not met from maintained schools' budget shares.

     35. Expenditure on—

(a) prudential borrowing;

(b) termination of employment costs;

(c) combined services where the expenditure relates to classes or descriptions of expenditure falling outside those set out in this Schedule;

(d) the schools' specific contingency; and

(e) SEN transport costs

provided that any deductions under this paragraph are limited to the amount deducted by the authority in respect of such expenditure for the financial year beginning on 1st April 2005 under Schedule 3 to the Budget Regulations.

(a) A is the lower of either—


(i) the total amount initially deducted from the authority's schools budget for the financial year beginning on the 1st April 2005, or

(ii) the total amount that could have been deducted from the authority's schools budget under the Budget Regulations as if those regulations had not been amended[67],



excepting any amount deducted in accordance with paragraphs 1 to 4 (Expenditure to support grants, Excellence in Cities, Performance Reward and Threshold and Performance Pay Grants), 32 (Expenditure without which the education of pupils would be seriously prejudiced) and 34 (Expenditure authorised by the Secretary of State and for correction of errors) of Schedule 3 to the Budget Regulations;

(b) B is the total amount of the individual schools budget for funding period 1 as initially determined in accordance with regulation 7 of these Regulations;

(c) C is—



(i) the total amount of the individual schools budget for the financial year beginning on 1st April 2005 allocated in accordance with regulation 4 of the 2004 Regulations, except for any amount retained under regulation 5(2) for the purpose of redeterminations or correction of errors, plus

(ii) where the authority have not deducted expenditure under paragraph 3 of Schedule 2 to these Regulations in respect of funding period 1, any expenditure deducted under paragraph 4 of Schedule 3 to the 2004 Regulations, to the extent that this was devolved to schools;



save that any grant paid by the LSC to the authority under section 7 of the 2000 Act must be excluded from all the calculations.

     2. Where any maintained school in the authority's area is due to be discontinued and re-open as an Academy in funding period 1, an amount equal to D × (E/12) must be deducted from C, where—

(a) D is the number of months during funding period 1 in which the school is not to be maintained by the authority; and

(b) E is the total budget share of that school for the financial year beginning on 1st April 2005.

     3. In calculating the limit on central expenditure imposed by paragraph 1, expenditure deducted in accordance with the following paragraphs of Schedule 2 to these Regulations—

(a) paragraphs 1 and 2 (expenditure to support grants and Performance Reward Grant);

(b) paragraph 25 (nursery education) to the extent that this exceeds expenditure deducted in accordance with paragraph 26 (nursery education)of Schedule 3 to the Budget Regulations; and

(c) paragraph 35(d) (expenditure on the schools' specific contingency)

must be disregarded.

(a) F is the lower of either—


(i) the total amount deducted from the authority's schools budget for funding period 1, or

(ii) the total amount that could have been deducted from the authority's schools budget under these regulations before variation of any limit was authorised by the Schools Forum or Secretary of State under regulation 13 of these Regulations,



excepting any amount deducted in accordance with paragraph 1 (Expenditure to support grants), and paragraph 2 (Performance Reward Grant) of Schedule 2 to these Regulations;

(b) G is the total amount of the individual schools budget for funding period 2 as initially determined in accordance with regulation 7 of these Regulations,

(c) H is—



(i) the total amount of the individual schools budget for funding period 1 as initially determined in accordance with regulation 7 of these Regulations, plus

(ii) where the authority have not deducted expenditure under paragraph 3 of Schedule 2 to these Regulations in respect of funding period 2, any expenditure deducted under that paragraph in respect of funding period 1, to the extent that this expenditure has been devolved to schools;



save that any grant paid by the LSC to the authority under section 7 of the 2000 Act must be excluded from all of these calculations.

     5. Where any maintained school in the authority's area is due to be discontinued and re-open as an Academy in funding period 2 an amount equal to J × (K/12) must be deducted from H, where—

(a) J is the number of months during funding period 2 in which the school is not to be maintained by the authority; and

(b) K is the total budget share of that school for funding period 1.

     6. In calculating the limit on central expenditure imposed by paragraph 4, expenditure deducted in accordance with the following paragraphs of Schedule 2 to these Regulations—

(a) paragraphs 1 and 2 (expenditure to support grants and Performance Reward Grant); and

(b) paragraph 25 (nursery education) in respect of funding period 2, to the extent that this exceeds expenditure deducted in accordance with that paragraph in respect of funding period 1

must be disregarded.