Statutory Instruments
EDUCATION, ENGLAND
Made
5th February 2008
Laid before Parliament
7th February 2008
Coming into force
29th February 2008
ACTION TO BE TAKEN BY A LOCAL EDUCATION AUTHORITY
FURTHER DEDUCTIONS AND VARIATIONS TO LIMITS AUTHORISED BY SCHOOLS FORUMS OR THE SECRETARY OF STATE
FORMULAE FOR DETERMINATION OF BUDGET SHARES
The Secretary of State for Children, Schools and Families makes the following Regulations in exercise of powers conferred by sections 45(1B)(1), 45A(2), 45AA(3), 47(4), 47A(4)(5), 48(1) and (2)(6), 49(2) and (2A)(7) and 138(7) of, and paragraph 2B of Schedule 14(8) to, the School Standards and Framework Act 1998(9).
1.—(1) These Regulations may be cited as the School Finance (England) Regulations 2008 and come into force on 29th February 2008.
(2) These Regulations apply in relation to the financial years beginning on 1st April 2008, 1st April 2009 and 1st April 2010.
(3) These Regulations apply only in relation to England.
(4) In these Regulations—
“the 1996 Act” means the Education Act 1996(10);
“the 1998 Act” means the School Standards and Framework Act 1998;
“the 2000 Act” means the Learning and Skills Act 2000(11);
“the 2002 Act” means the Education Act 2002(12);
“the 2005 Act” means the Education Act 2005(13);
“the 2006 Act” means the Education and Inspections Act 2006(14);
“the 2006 Regulations” means the School Finance (England) Regulations 2006(15);
“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(16);
“capital expenditure” means expenditure of a local authority which falls to be capitalised in accordance with proper practices, or expenditure treated as capital expenditure by virtue of any regulations or directions made under section 16 of the Local Government Act 2003(17);
“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;
a “combined service” is a service funded partly from central expenditure, and partly from other budgets of the authority or contributions from other bodies;
“Dedicated Schools Grant” is a 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 schools specific contingency” is central expenditure deducted for the purpose of ensuring that monies are available to enable increases in a school’s budget share after it has been allocated where it subsequently becomes apparent that—
a governing body has incurred expenditure which it would be unreasonable to expect them to meet from the school’s budget share,
an increase in the school’s budget share is due in accordance with the local education authority’s formula,
a determination or redetermination of the school’s budget share authorised by the schools forum or the Secretary of State has led to such an increase, or
such an increase is necessary for the purpose of correction of errors,
and where such circumstances were unforeseen when initially determining the school’s budget share;
“funding period 1” is the financial year beginning on 1st April 2008;
“funding period 2” is the financial year beginning on 1st April 2009;
“funding period 3” is the financial year beginning on 1st April 2010;
“gifted and talented pupils” means pupils in primary or secondary schools identified as such by a local education authority by virtue of the fact that they are demonstrating, or have the potential to develop, ability in one or more subjects, leadership skills, or organisational skills at a level significantly ahead of other children in their year group;
“key stage 4” means the fourth key stage of the National Curriculum for England comprising the requirements and entitlements described in sections 85 and 85A of the 2002 Act(18);
a “local education authority’s formula” has the meaning in regulation 9;
“LSC” is the Learning and Skills Council for England(19);
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 includes any expenditure of that class or description as the authority may incur in relation to Academies(20), and to pupils registered at Academies;
“Performance Reward Grant” is a grant of that name paid to a local authority under section 31 of the Local Government Act 2003 to reward the authority 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(21);
“practical and applied learning” means education provided to pupils at key stage 4 in a secondary school or elsewhere which prepares them for employment or for a qualification related to a particular employment sector;
“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(22);
“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;
“PVI providers” means persons other than governing bodies of primary schools, local education authorities or the proprietors of Academies who provide nursery education for three and four year olds for which no charge is made;
“School Standards Grant” is a grant of that name paid to a local education authority by the Secretary of State under section 14 of the 2002 Act;
“school year” has the meaning given to that expression in section 579(1) of the 1996 Act(23);
a reference to “special educational needs transport costs”, for the purposes of paragraph 36(e) of Schedule 2, is a reference to the costs of home to school transport for pupils with special educational needs in schools maintained by a local education authority where the authority is meeting such costs because the revenue savings that will be achieved by placing such children in a school maintained by them are equal to, or greater than, the cost of such transport;
“specific grant” means any 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 where a school has three terms, or the fifth and sixth terms where a school has six terms;
a reference to “termination of employment costs”, for the purposes of paragraph 36(b) of Schedule 2, is a reference to expenditure relating to the dismissal or premature retirement of, or for the purpose of securing the resignation of, any person employed in a maintained school where—
the dismissal, premature retirement or resignation occurs after 1st April 2008; and
the revenue savings achieved by any termination of employment are equal to or greater than the costs incurred.
2. The Financing of Maintained Schools (England) 2004(24),The LEA Budget, Schools Budget and Individual Schools Budget Regulations 2004(25), and The LEA Budget, Schools Budget and Individual Schools Budget (Amendment) (England) Regulations 2005(26) are revoked on 1st April 2008.
3.—(1) The following classes or descriptions of local education authority expenditure are prescribed for the purposes of section 45A(1) of the 1998 Act and the determination of a local education authority’s LEA budget, subject to the exceptions in regulation 6—
(a) those specified in Schedule 1; and
(b) any expenditure which falls outside the classes or descriptions of expenditure specified in regulation 5 and Schedule 2 (the schools budget).
(2) Expenditure which falls within the classes or descriptions of expenditure specified in regulation 5 or Schedule 2 is not expenditure prescribed for the purposes of section 45A(1) of the 1998 Act.
4. A local education authority must not later than 31st March 2008—
(a) make an initial determination of their schools budgets for funding periods 1, 2 and 3; and
(b) give notice of any such determination to the governing bodies of the schools they maintain.
5.—(1) The classes or descriptions of local education authority expenditure specified in sub-paragraphs (a) to (c) and Schedule 2 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 paragraph (2) and 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;
(b) expenditure on the education of pupils at independent schools, non-maintained special schools(27), 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; and
(c) all other expenditure incurred in connection with the authority’s functions in relation to the provision of primary and secondary education, insofar as that expenditure does not fall within paragraphs (a) or (b).
(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 36(c) of Schedule 2 is only 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 is incurred in providing an educational benefit to those pupils.
6. A local education authority’s LEA budget or schools budget must not include the following classes or descriptions of expenditure—
(a) capital expenditure, other than
(i) CERA,
(ii) capital expenditure appropriated to the schools budget for the purpose of funding pay arrears due to staff whose salaries are met from the schools budget;
(b) expenditure on capital financing, other than expenditure incurred
(i) on prudential borrowing, or
(ii) for the purpose of meeting the costs of financing the payment of pay arrears referred to in paragraph 6(a)(ii);
(c) expenditure for the purposes of section 26 of the Road Traffic Regulation Act 1984(28) (arrangements for patrolling school crossings); and
(d) expenditure met by the local education authority under section 51A of the 1998 Act(29) (community purposes).
7.—(1) Subject to paragraphs (2) to (4), not later than 31st March 2008, a local education authority must deduct from their schools budgets such of the classes or descriptions of planned expenditure set out in Schedule 2 (“the central expenditure”) as they propose to deduct, in order to determine their individual schools budgets for funding periods 1, 2, and 3.
(2) In deducting central expenditure under paragraph (1), a local education authority must limit any increase in deductions, from one funding period to the next, by ensuring that it does not exceed the percentage of any increase in the authority’s schools budget for the relevant funding period, unless they obtain the approval of their schools forum under regulation 14(1)(b) or the Secretary of State under regulation 14(3) to vary this limit on any such increase.
(3) For the purpose of calculating the limit referred to in paragraph (2) only, the amount of any funding deducted under paragraph 26 of Schedule 2 (funding for PVI providers) must be treated as though it were part of the individual schools budget.
(4) In deducting the central expenditure referred to in paragraph 36 of Schedule 2, a local education authority must not exceed the limit referred to in that paragraph, unless they have obtained the approval of their schools forum under regulation 14(1)(b) or the Secretary of State under regulation 14(3) to do so.
(5) 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.
8.—(1) A local education authority may make changes to the formulae they have used in the financial years beginning 1st April 2006 and 1st April 2007.
(2) Subject to paragraph (3), 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) does not apply to changes made relating to matters referred to in regulation 21 (sixth form funding) or 23 (excluded pupils).
9.—(1) A local education authority must, before the beginning of funding period 1 and after the consultation referred to in regulation 8, decide upon the formulae which they will use to determine and redetermine schools’ budget shares in funding periods 1, 2 and 3, having regard to the factors, criteria and requirements set out in Part 3 of these Regulations.
(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 or 3 before the beginning of the funding period to which the changes relate where any such changes have been 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) A local education authority must use the formulae determined under paragraph (1), subject to any changes made under paragraph (3) and regulation 25 (Additional arrangements), in all determinations and redeterminations of budget shares in respect of funding periods 1, 2 and 3.
10. Not later than 31st March 2008, a local education authority must—
(a) initially determine the allocation of their individual schools budget for funding periods 1, 2 and 3 as the budget shares of the schools which they maintain for each of those funding periods in accordance with Part 3 of these Regulations; and
(b) give notice of schools’ budget shares for funding periods 2 and 3 to the governing bodies of each of the schools they maintain.
11.—(1) A new school must have a delegated budget from the appropriate date.
(2) Subject to paragraphs (3) and (6), the appropriate date is either—
(a) the date which is fifteen calendar months before the opening date of the new school; or
(b) the date upon which a temporary governing body is constituted for that school,
whichever is the later.
(3) On the application of a local education authority, their schools forum may—
(a) vary the appropriate date to a date proposed by the authority;
(b) vary the appropriate date to a different date; or
(c) refuse to vary the appropriate date.
(4) Where—
(a) a schools forum
(i) vary the appropriate date to a different date, or
(ii) refuse to vary the appropriate date; or
(b) a local education authority are not required to establish a schools forum for their area(30),
the authority may make an application to the Secretary of State for variation of the appropriate date.
(5) On the application of a local education authority, the Secretary of State may—
(a) vary the appropriate date to a date proposed by the authority;
(b) vary the appropriate date to a different date; or
(c) refuse to vary the appropriate date.
(6) A local education authority must determine the amount of a new school’s delegated budget for the period from the appropriate date to the opening date as an amount which is sufficient to fund the appointment of staff and to enable the purchase of any goods and services necessary in order to admit pupils.
(7) After the opening date, a school’s delegated budget must be determined in accordance with the local education authority’s formula for the relevant funding period.
12.—(1) A local education authority may make a redetermination of their schools budgets and individual schools budgets for funding period 1, 2 or 3 at any time before or during the funding period to which those budgets relate.
(2) In making any such redetermination, a local education authority—
(a) may only reduce the amount of their schools budgets where they receive an amount of Dedicated Schools Grant which is lower than the amount on which they based their determinations under regulation 7;
(b) may not reduce their individual schools budget for funding period 1, 2 or 3 by making further deductions of central expenditure from their schools budgets unless they have obtained authorisation to do so from their schools forum or the Secretary of State under regulation 14(2) or (4); and
(c) must comply with the limits imposed by paragraph 36 of Schedule 2 and regulation 7(2) unless their schools forum or the Secretary of State authorise the variation those limits under regulation 14(2) or (4).
(3) Before the beginning of funding period 1, a local education authority must advise schools of any circumstances they are aware of which will make it likely that a redetermination will be made in respect of funding periods 1, 2 and 3, and the nature of any redetermination likely to be made in particular circumstances.
(4) 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 within 28 days of making the redetermination.
13. Not later than 31st March 2009 for funding period 2 or 31st March 2010 for funding period 3, a local education authority must redetermine any allocation of schools’ budget shares which they have made under regulation 10(a), in accordance with Part 3 of these Regulations.
14.—(1) Subject to paragraph (2), on the application of a local education authority, their schools forum may authorise—
(a) the making of further deductions from their schools budget of any central expenditure exceeding the amount of any deductions made previously under regulations 7(1) or 12(1); or
(b) the varying of any limit imposed by paragraph 36 of Schedule 2, or regulation 7(2).
(2) Where—
(a) a schools forum does not authorise the making of further deductions or enable the limits referred to in paragraph (1) to be varied; or
(b) a local education authority is not required to establish a schools forum for their area,
the authority may make an application to the Secretary of State for such authorisation or variation.
(3) On the application of a local education authority under paragraph (2), the Secretary of State may authorise the making of further deductions or variation of the limits referred to in paragraph (1).
(4) Unless the contrary intention appears in any authorisations given by the schools forum or the Secretary of State under previous regulations, such authorisations continue to apply in relation to funding period 1.
(5) Unless the contrary intention appears in any authorisations given by the schools forum or the Secretary of State in relation to funding period 1, such authorisations continue to apply to funding periods 2 and 3, and, unless the contrary intention appears in any authorisation given by the schools forum or the Secretary of State in relation to funding period 2, such authorisations continue to apply to funding period 3.
15.—(1) Subject to regulation 17 (Special arrangements for maintained nursery schools and pupils in nursery classes) and paragraphs (2) and (5), in determining and redetermining budget shares for primary and secondary schools, a local education authority must take into account in their formulae for funding periods 1, 2 and 3 the number of registered pupils at those schools on the dates specified in paragraph (6), weighted, if the authority consider it appropriate, in accordance with paragraph (4).
(2) For the purposes of paragraph (1), the number of registered pupils does not include pupils—
(a) in places—
(i) in primary or secondary schools which the authority recognise as reserved for children with special educational needs, and
(ii) in boarding accommodation at boarding schools other than special schools
where the authority exercise their discretion to take these places into account under regulation 16(1)(b) or (c);
(b) in respect of whom grant is payable to the authority by the LSC (sixth form pupils); or
(c) in infant classes where the authority choose to take the class into account as an additional factor under paragraph 35 of Schedule 3.
(3) Where a local education authority exercise their discretion under regulation 16(1) to take into account places, they may also take into account in their formulae the number of registered pupils in special schools or schools with boarding accommodation, or in reserved places at primary or secondary schools, as referred to in that paragraph, on the dates specified in paragraph (6).
(4) A local education authority may weight pupil numbers according to any or all of the following factors—
(a) age, including weighting according to key stage or year group;
(b) in the case of pupils aged under five, their exact age when admitted to the school;
(c) in the case of pupils aged under five, whether they have been admitted to the school in excess of the admission number agreed with the authority;
(d) in the case of pupils aged under five, hours of attendance;
(e) whether a pupil has special educational needs;
(f) whether the pupil is attending a middle school;
(g) whether the pupil is at key stage 4, and is accessing practical and applied learning;
(h) whether the pupil, although registered at a school, is also attending a college of further education or a course delivered by any training provider; and
(i) whether the pupil is in an infant class (in cases where an infant class is not taken into account as an additional factor under paragraph 35 of Schedule 3).
(5) Subject to paragraphs (7) and (8), for the purpose of initially determining budget shares for funding periods 2 and 3 under regulation 10, a local education authority must estimate the number of pupils they will take into account under paragraph (1) for that funding period.
(6) The dates for ascertaining pupil numbers are—
(a) 17th January 2008 in respect of funding period 1;
(b) 15th January 2009 in respect of funding period 2; and
(c) 21st January 2010 in respect of funding period 3.
(7) Subject to paragraph (8), where a primary school—
(a) operates a policy of admitting children into reception classes in the summer term; and
(b) will admit pupils into such classes in the summer term immediately after any of the dates specified in paragraph (6),
a local education authority may determine a number representing the number of pupils who will be admitted in that summer term, and take such number into account in their formulae for funding period 1, 2 or 3.
(8) In determining the number of pupils they will take into account under paragraph (7), a local education authority—
(a) must not determine any number which exceeds the number of pupils admitted in the summer term immediately before any of the dates specified in paragraph (6); and
(b) must make any such determination before the beginning of the funding period during which the pupils will be admitted.
(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 to the school following his permanent exclusion from another school.
16.—(1) In determining and redetermining budget shares for funding periods 1, 2 and 3, a local education authority may take into account the number of places they wish to fund in—
(a) special schools;
(b) primary or secondary schools with places which the authority recognise as reserved for children with special educational needs; and
(c) schools with boarding accommodation.
(2) In determining and redetermining budget shares for funding periods 1, 2 and 3 a local education authority may take into account the nature of any special educational needs in question when funding places under paragraph (1)(a) or (b).
(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 15(6).
(4) For the purpose of initially determining budget shares for funding periods 2 and 3 under regulation 10(a), a local education authority must estimate the number of places they wish to fund under paragraph (1) for that funding period.
17.—(1) For the purpose of initially determining budget shares for maintained nursery schools and other primary schools, a local education authority may take into account in their formulae for funding periods 1, 2, and 3 either—
(a) the number of registered pupils in maintained nursery schools or the number of registered pupils in nursery classes on the date specified in regulation 15(6) and their hours of attendance; or
(b) the number of places they wish to fund in those schools or those classes.
(2) For the purpose of initially determining budget shares for maintained nursery schools for funding periods 2 and 3, a local education authority must estimate the number of pupils or places they wish to fund under paragraph (1).
(3) In redetermining budget shares for maintained nursery schools and other primary schools, a local education authority must take into account in their formulae for funding periods 2 and 3—
(a) the number of registered pupils in maintained nursery schools and the number of registered pupils in nursery classes on the dates specified in regulation 15(6)(b) and (c); and
(b) the number of hours each of those registered pupils spends in school per week,
except where paragraph (4) applies, and except in the circumstances referred to in paragraph (5).
(4) Where it appears to a local education authority that it is necessary to fund places, as opposed to numbers of pupils, in order to ensure that a maintained nursery school remains open or, in the case of other primary schools, that they are able to continue to provide nursery classes, a local education authority may take into account in their formulae for funding periods 2 and 3 the number of places they wish to fund in those schools or classes.
(5) Subject to paragraph (6), where—
(a) a primary school operates a policy of admitting children into nursery classes in the summer term; and
(b) will admit pupils into such classes in the summer term immediately after any of the dates specified in regulation 15(5)(b) or (c),
a local education authority may determine a number representing the number of pupils who will be admitted in that summer term and the number of hours per week each pupil spends in school, and take such number into account in their formulae for funding periods 1, 2 or 3.
(6) In determining the number of pupils they will take into account under paragraph (5), a local education authority—
(a) must not determine any number which exceeds the number of pupils admitted in the summer term immediately before either of the dates specified in regulation 15(5)(b) or (c); and
(b) must make any such determination before the beginning of the funding period during which the pupils will be admitted.
(7) Where a local education authority take into account in their formulae the number of registered pupils in maintained nursery schools or the number of registered pupils in nursery classes under paragraph (1)(a) or (3)(a), they may weight pupil numbers according to any or all of the following factors—
(a) the age of pupils when admitted to the school;
(b) whether any pupils have been admitted to the school in excess of the admission number agreed with the authority; and
(c) the special educational needs of any such pupils.
18.—(1) For the purpose of initially determining budget shares in respect of funding periods 1, 2 and 3, a local education authority must use factors or criteria which differentiate between different categories or descriptions of schools insofar 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), 27 (insurance) or 29 (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.
19.—(1) Subject to regulation 18 (differential funding), a local education authority may, in determining budget shares in respect of funding periods 1, 2 and 3, take into account in their formulae any or all of the factors or criteria set out in Schedule 3.
(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 a local education authority’s formula pursuant to paragraph 17 of Schedule 3 (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 3 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 make changes to the factors or criteria taken into account in their formula from one funding period to the next, they may make such transitional provision as they consider reasonable.
20.—(1) Subject to paragraph (4), in determining and redetermining budget shares for all schools maintained by them in respect of funding periods 1, 2 and 3, a local education authority must ensure—
(a) in respect of primary and secondary schools (other than maintained nursery 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 4;
(b) in respect of special schools, that the formulae must provide for an increase in those schools’ budget shares for each of those funding periods, calculated in accordance with paragraph 5 of Schedule 4; 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 4, or
(ii) that the formula must provide for an increase in 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.
(2) For the purposes of determining budget shares in respect of funding periods 1, 2 and 3, paragraph (1) does not apply to any school—
(a) opening during any of these funding periods, except in the circumstances set out in paragraph 4 of Schedule 4; or
(b) closing during any of these funding periods in circumstances where a local education authority have redetermined that school’s budget share during the relevant funding period.
(3) For the purpose of initially determining budget shares for funding periods 2 and 3 under regulation 10(a), a local education authority must apply the relevant provisions in Schedule 4 using estimates of—
(a) the number of registered pupils in schools funded on the basis of pupil numbers in accordance with regulations 15(5) and 17(2); or
(b) the number of places they wish to fund in accordance with regulation 16(4).
(4) A local education authority may make changes to the operation of this Regulation and to the operation of Schedule 4 in determining and redetermining budget shares where authorised to do so by the Secretary of State or their schools forum under regulation 25 (additional arrangements).
21.—(1) A local education authority must include in a secondary school’s budget share for funding periods 1, 2 and 3 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(31).
(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 formulae 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, 2 and 3 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).
22.—(1) A local education authority must include factors or criteria in their formulae which enable them to determine, or redetermine, a school’s budget share for funding periods 1, 2 and 3 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(32);
(c) a school which is the subject of a prescribed alteration within the meaning of regulations made under section 18 of the 2006 Act(33);
(d) a school which is to be discontinued; and
(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)(c), such factors or criteria may not be used for a period of more than seven years after the date of implementation of the relevant alteration.
(3) 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 either—
(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.
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 A x (B/52) where—
A is the amount, in the funding period in which the permanent exclusion takes effect, determined by the authority in accordance with this Part, to be attributable for the full funding period to a registered pupil of the same age and personal circumstances as the pupil in question at primary or secondary schools maintained by the authority:
for the purposes of this definition, the amount attributable to a registered pupil is the sum of the amounts determined in accordance with the authority’s formula as determined in accordance with these Regulations by reference to pupil numbers rather than by reference to the number of places at the school or any other factor or criterion not dependent on pupil numbers (except that, where the registered pupil in question is a pupil in respect of whom grant is payable to the authority by the LSC under section 7 of the 2000 Act, the amount attributable to that pupil is £3197 for funding period 1, £3264 for funding period 2 and £3332 for funding period 3); and
B is the number of complete weeks remaining in the funding period calculated from the relevant date:
except that where the permanent exclusion takes effect on or after 1st April in a school year at the end of which pupils of the same age, or age group, as the pupil in question normally leave that school before being admitted to another school with a different pupil age range, B is the number of complete weeks remaining in that school year calculated from the relevant date.
(3) Where a pupil is admitted to a school maintained by a local education authority (“the admitting school”) who has been permanently excluded from another maintained school in that financial year, the authority must redetermine the admitting school’s budget share in accordance with paragraph (4).
(4) The admitting school’s budget share must be increased by an amount which may not be less than the amount D x (E/F) where—
D is the amount by which the authority reduce the budget share of the school from which the pupil was permanently excluded, or would have reduced it had that school been maintained by the authority;
E is the number of complete weeks remaining in the funding period during which the pupil is a registered pupil at the admitting school; and
F is the number of complete weeks remaining in the funding period calculated from the relevant date.
(5) For the purposes of this regulation, the relevant date is the sixth school day following the date on which the pupil has been permanently excluded.
(6) Where a permanently excluded pupil is subsequently reinstated by the governing body of the school or by an appeal panel constituted under regulations made under section 52 of the 2002 Act, the school’s budget share must be increased by an amount which is no less than G x (H/I) where—
G is the amount by which the authority has reduced the school’s budget share;
H is the number of complete weeks remaining in the funding period during which the pupil is reinstated; and
I is the number of complete weeks remaining in the funding period calculated from the relevant date.
(7) Paragraphs (1) and (2) also apply where a pupil leaves a maintained school for reasons other than permanent exclusion, and is receiving education funded by a local education authority other than at a school which is maintained by that authority.
24.—(1) A local education authority may at any time during funding period 1, 2 or 3 redetermine a school’s budget share for a previous funding period, or the current funding period, in order to correct an error in a determination or redetermination under these, or previous Regulations, whether arising from a mistake as to the number of registered pupils at the school or otherwise, provided the error is of a kind not provided for by any specific error correction provision in the authority’s formula.
(2) A local education authority may redetermine a school’s budget share for funding period 1, 2 or 3 to take into account any changes in that school’s non-domestic rates liability in relation to a current funding period or previous funding period.
(3) Insofar as any redetermination under paragraph (1) would require the amount that would otherwise have been the budget share of a school to be reduced, it may not be reduced to a figure which is lower than that which could have been allocated to that school under the regulations in force during the funding period in which the error occurred.
25.—(1) Subject to paragraph (2), on application by a local education authority to the Secretary of State for any authorisation or authorisations to determine or redetermine budget shares, the Secretary of State may authorise the authority to determine or redetermine budget shares to such extent as he may specify in accordance with arrangements approved by him in place of the arrangements provided for by these Regulations.
(2) The Secretary of State may not authorise a local education authority to determine or redetermine budget shares in the cases referred to in paragraph (3) unless—
(a) the authority has first made an application to their schools forum for such authorisation which has been refused; or
(b) the authority is not required to establish a schools forum for their area.
(3) In cases where a local education authority seeks any authorisation, or authorisations, to determine or redetermine budget shares which—
(a) relate to the operation of regulation 20 and Schedule 4 (minimum funding guarantee) and which, either individually or when taken together in the funding period to which the application relates, will affect no more than 50% of pupils in schools maintained by the authority; or
(b) relate to a change to the formula determined under regulation 9(1) in respect of funding period 2 or 3,
their schools forum may authorise such determinations or redeterminations.
(4) Unless the contrary intention appears in any such authorisation or arrangements, authorisations given and arrangements approved by the Secretary of State or any schools forum under previous regulations continue to apply in relation to funding period 1.
(5) Unless the contrary intention appears in such authorisation or arrangements, authorisations given and arrangements approved by the Secretary of State or any schools forum in relation to funding period 1 continue to apply to funding periods 2 and 3, and authorisations given and arrangements approved by the Secretary of State or any schools forum in relation to funding period 2 continue to apply to funding period 3.
26. A scheme prepared by a local education authority under section 48(1) of the 1998 Act(34) must deal with the matters connected with the financing of schools maintained by the authority set out in Schedule 5.
27.—(1) Where a local education authority submit proposals for any revisions to their scheme to their schools forum for approval pursuant to paragraph 2A of Schedule 14 to the 1998 Act(35), the schools forum may—
(a) approve any such proposals;
(b) approve any such proposals subject to modifications; or
(c) refuse to approve any such proposals.
(2) Where the schools forum approve any revisions to the scheme, they may specify the date upon which any revised scheme is to come into force.
(3) Where—
(a) the schools forum refuse to approve proposals submitted under paragraph 2A of Schedule 14 to the 1998 Act, or approve any such proposals subject to modifications which are not acceptable to the local education authority; or
(b) the local education authority are not required to establish a schools forum for their area,
the authority may apply to the Secretary of State for approval of such proposals.
(4) The Secretary of State may—
(a) approve any such proposals;
(b) approve any such proposals subject to modifications; or
(c) refuse to approve any such proposals.
(5) Where the Secretary of State approves any revisions to the scheme, he may specify the date upon which any revised scheme is to come into force.
(6) No revised scheme is to come into force unless approved by the schools forum or the Secretary of State in accordance with this regulation.
28. A local education authority must publish their scheme in such manner as they see fit.
Jim Knight
Minister of State
Department for Children, Schools and Families
5th February 2008
Regulation 3
Expenditure of a class or description referred to in this Schedule includes expenditure on associated administrative costs and overheads.
1. Expenditure on services provided by educational psychologists.
2. Expenditure in connection with the authority’s functions under sections 321 to 331 of the 1996 Act (which functions relate to the identification and assessment of children with special educational needs and the making, maintaining and reviewing of statements for such children)(36).
3. Expenditure on monitoring the provision for pupils in schools (whether or not maintained by the authority) for the purposes of disseminating good practice in relation to, and improving the quality of educational provision for, children with special educational needs.
4. Expenditure on collaboration with other statutory and voluntary bodies to provide support for children with special educational needs.
5. Expenditure in connection with—
(a) the provision of parent partnership services (that is services provided under section 332A of the 1996 Act to give advice and information to parents of children with special educational needs), or other guidance and information to such parents which, in relation to pupils at a school maintained by the authority, are in addition to the information usually provided by the governing bodies of such schools; or
(b) arrangements made by the authority with a view to avoiding or resolving disagreements with the parents of children with special educational needs.
6. Expenditure on carrying out the authority’s child protection functions under the Children Act 1989(37), 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 or regulations made under section 75 of the National Health Service Act 2006(38).
8. Expenditure in providing special medical support for individual pupils insofar as such expenditure is not met by a Primary Care Trust(39), National Health Service Trust(40), NHS foundation trust(41) or Local Health Board(42).
9. Expenditure incurred by a local education authority in respect of action to support the improvement of standards in the authority’s schools, in particular—
(a) expenditure incurred in connection with functions under the following sections of the 2006 Act: sections 63 (power to require governing bodies of schools eligible for intervention to enter into arrangements), 64 (power to appoint additional governors), 65 and Schedule 6 (power to provide for governing bodies to consist of interim executive boards), and 66 (power to suspend right to delegated budget); and
(b) expenditure on school improvement partners(43).
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 in relation to the establishment, alteration or discontinuance of schools pursuant to Part 2 of, and Schedule 2 to, the 2006 Act;
(c) the authority’s functions in relation to the exclusion of pupils from schools, excluding any provision of education to such pupils, but including advice to the parents of such pupils;
(d) the authority’s functions under sections 508A, 508E and 509 (school travel) of the 1996 Act(44); and
(e) 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(45).
11. Expenditure on the Education Welfare Service(46) and other expenditure arising from the authority’s functions under Chapter 2 of Part 6 of the 1996 Act (School attendance).
12. Expenditure on the provision of support for students under regulations made under section 1(1) of the Education Act 1962(47) and under section 22 of the Teaching and Higher Education Act 1998.
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 education maintenance allowances(48).
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.
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(49).
19. Expenditure on the provision by the local education authority under sections 15A and 507A and 507B(50) 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.
20. Expenditure in their capacity as a local education authority in relation to—
(a) functions of the 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(51) (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, 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 4 of Part 2 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;
the authority’s monitoring of compliance with the requirements of their financial scheme prepared under section 48 of the 1998 Act(52), and any other requirements in relation to the provision of community facilities by governing bodies under section 27 of the 2002 Act;
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(53);
the authority’s functions under regulations made under section 44 of the 2002 Act(54);
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;
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;
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;
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;
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;
determination of conditions of service for non-teaching staff, and advice to schools on the grading of such staff;
the authority’s functions regarding the appointment or dismissal of employees;
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;
compliance with the authority’s duties under the Health and Safety at Work etc. Act 1974(55) and the relevant statutory provisions as defined in section 53(1) of that Act, insofar 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;
the investigation and resolution of complaints;
legal services relating to the statutory functions of the authority;
the preparation and review of plans involving collaboration with other local authority services or with public or voluntary bodies;
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;
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;
the authority’s duties under article 4(2) and (5) of the Race Relations Act 1976 (Statutory Duties) Order 2001(56);
the remittance of fees payable to the General Teaching Council for England by virtue of section 4(4) and 4(4A) of the Teaching and Higher Education Act 1998(57) and the provision of information required by the Council pursuant to regulations(58) made under section 12 of that Act;
the authority’s functions pursuant to regulations made under section 12 of the 2002 Act (supervising authorities of companies formed by governing bodies); and
the authority’s functions under the Disability Discrimination Act 1995(59) insofar 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 local education authorities and their 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(60).
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 36(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(61).
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. Expenditure on insurance, other than for liability arising in connection with schools or school premises.
31. Expenditure in connection with powers and duties performed under Part 2 of the Children and Young Persons Act 1933 (Enforcement of, and power to make byelaws in relation to, restrictions on the employment of children(62)).
Regulations 5 and 7
Expenditure of a class or description referred to in this Schedule includes expenditure on associated administrative costs and overheads.
1.—(1) Expenditure (other than expenditure incurred in connection with any other paragraph of this Schedule) which the authority is obliged to incur as a condition of a specific grant paid to the authority and which is taken into account in determining the amount of such specific grant.
(2) Any amount which the authority is obliged to make available as a condition of a grant paid under section 14 of the 2002 Act which is taken into account in determining the amount of such grant, decisions regarding the expenditure of which are delegated to the governing body of a maintained school.
2. Expenditure not falling within any other paragraph of this Schedule or any paragraph of Schedule 1 which the authority propose to meet from a Performance Reward Grant.
3. Expenditure on any threshold and performance pay element of teachers’ salaries.
4. Subject to paragraphs 5 and 6, expenditure in making the provision specified in a pupil’s statement of special educational needs except where the pupil is—
(a) a registered pupil at a special school maintained by the authority; or
(b) a registered pupil at a primary or secondary school maintained by the authority who occupies one of a number of places at that school which are recognised by the authority as being reserved for children with special educational needs.
5. Where a pupil falls within paragraph 4(a) or (b), and the cost of the provision specified i