Guidance

Schools operational guide: 2022 to 2023

Updated 16 December 2021

This guidance was withdrawn on 29 December 2023

This page has been withdrawn as it is now out of date.

Find the latest information on pre-16 funding from ESFA on GOV.UK.

Applies to England

Introduction

1: This guide helps local authorities and their schools forums, to plan the local implementation of the funding system for the 2022 to 2023 financial year.

2: As the country moves through the coronavirus (COVID-19) pandemic, the Department for Education (DfE) acknowledges the essential role those local authorities are playing to support education. To ensure that funding can be delivered as smoothly as possible to schools, the department has made limited changes to funding arrangements in 2022 to 2023.

Expiry or review date

3: This guidance is current for the 2022 to 2023 funding year.

Who is this publication for?

4: This guidance is for:

• local authorities
• schools forums

Updates to the guidance

5: We have updated the July 2021 version of the guidance to reflect current policy and to finalise funding arrangements in 2022 to 2023. The updates in the guidance additionally include changes in tense for activities which have already passed or where new information has been released following the July 2021 version of this guidance.

6: Confirmation of the DSG allocations.

7: Confirmation of CSSB allocations in 2022 to 2023.

8: We’ve published the high needs funding arrangements: 2022 to 2023

9: We’ve published the early years entitlements: local authority funding of providers operational guide 2022 to 2023 that local authorities should follow when funding providers to deliver the early years entitlements in 2022 to 2023.

10: We’ll shortly issue the final authority proforma tool (APT) with data updated from the October census for local authorities to submit their funding formula.

Changes in 2022 to 2023

11: The department has published National Funding Formula (NFF) provisional allocations for 2022 to 2023 with new factor values and made some technical changes. These are detailed in the NFF technical notes and the NFF policy document. Where these affect local formula arrangements, we also cover them in this guidance.

12: Key changes to the schools NFF in 2022 to 2023 are:

• NFF factor values have increased by:

  • £10,000 to the maximum sparsity values
  • 3% to basic entitlement, free school meals at any time in the last 6 years (FSM6), income deprivation affecting children index (IDACI), lower prior attainment (LPA), English as an additional language (EAL) and the lump sum
  • 2% to the floor, the minimum per pupil levels and free schools meals (FSM)
  • 0% on the premises factors, except for PFI which has increased by RPIX

13: As announced in the department’s response to the sparsity consultation, we have made two changes. Schools sparsity distances are now based on road distances, instead of straight-line distances, and a sparsity distance taper has been introduced, in addition to the existing year group size taper.

14: Data on pupils who have been eligible for FSM6 is now taken from the October 2020 school census instead of the January 2020 census, to make the factor more up to date and bring it in line with arrangements for other NFF factors as well as the pupil premium.

15: In calculating low prior attainment proportions, data from the 2019 early years foundation stage profile (EYFSP) and key stage 2 (KS2) tests is used as a proxy for the 2020 tests, following the cancellation of assessment due to coronavirus (COVID-19).

16: Pupils who joined a school between January 2020 and May 2020 attract funding for mobility on the basis of their entry date, rather than by virtue of the May school census being their first census at the current school (the May 2020 census did not take place due to coronavirus (COVID-19)).

17: Further to the consultation on changes to the payment process of schools business rates, ESFA will pay business rates directly to billing authorities on behalf of all state funded schools from 2022 to 2023 onwards. We have issued further details on these changes in our consultation response changes to the payment process of schools’ business rates document.

18: The department has confirmed the following aspects of the high needs NFF:

• the funding floor is set at 8% so each local authority will see an increase of at least 8% per head of their 2 to 18 population (as estimated by the Office of National Statistics)
• the gains cap is set at 11%, allowing local authorities to see gains up to this percentage increase under the formula, again calculated on a per head basis of their 2 to 18 population
• it should be noted, however, that further high needs funding allocations were announced in December 2021, in addition to the NFF allocations, following the autumn 2021 spending review

19: A reminder that the following requirements have been removed from appendix 3 as they no longer need schools forum approval, following the consultation on changing the dedicated schools grant:

• any deficit from the previous funding period that is being brought forward and is to be funded from the new financial year’s schools budget
• any brought forward deficit on de-delegated services which is to be met by the overall schools budget

20: In 2022 to 2023, as in previous years, each local authority will continue to set a local schools funding formula, in consultation with local schools. In July 2021, the department published a consultation on proposals for completing our reforms of the funding system, whereby individual schools budgets would be set directly through one single national formula, rather than local funding formulae. This consultation proposes that, from 2023 to 2024, local authorities will be required to bring their own formulae closer to the schools NFF, to smooth the transition. These requirements do not apply in 2022 to 2023, but local authorities may choose to move their local formulae closer to the NFF in advance of these requirements.

21: Key features of local authority formulae arrangements in 2022 to 2023 are:

Teachers pay grant (TPG) and Teachers pension employers contribution grant (TPECG)

22: TPG and TPECG are now fully rolled in to the NFF, no separate adjustments are needed in the local formulae- beyond what was already done in 2021 to 2022, to account for these grants in 2022 to 2023.

Minimum per pupil levels (MPPLs)

23: The MPPLs will remain mandatory, at the new NFF values.

Minimum funding guarantee (MFG)

24: Local authorities have the freedom to set the MFG in local formulae between +0.5% and +2% per pupil

Dedicated Schools Grant (DSG) transfers

25: Local authorities continue to be able to transfer up to 0.5% of their schools block to other blocks of the DSG, with schools forum approval. As the TPG and TPECG are now fully incorporated into the NFF – unlike last year – no adjustment needs to be made from the total schools block to account for these grants when calculating the funding to be transferred.

26: A disapplication is required for any transfers above 0.5%, or any amount without schools forum approval; this applies to any transfers even if the minister agreed an amount in previous years. Local authorities with safety valve agreements will have this handled as part of safety valve monitoring.

Deficit management

27: The department recognises that there may well be some local authorities which, despite their best efforts and the increased funding for the high needs block, will still not be able to pay off their historic deficit from the DSG over the next few years. In these cases, the department expects to work together with the local authority to agree a plan of action to enable the local authority to pay off its deficit over time. The department will need convincing evidence from the local authority that it would be impracticable to pay off a historic deficit from the DSG it would expect to receive in future years. The department will discuss the evidence requirement with selected local authorities and has provided a template to assist all local authorities report their plans for managing the DSG.

28: The department will continue to approach selected local authorities to begin discussions with them during 2021. These discussions are detailed, and to make this process manageable it will be necessary to limit discussions during 2021 to 2022 to a small number of authorities, as was the case in 2020 to 2021. The department expects to expand the discussions to other local authorities in later years.

Lower prior attainment assessment data

29: Following the cancellation of assessments in summer 2020 and 2021 due to coronavirus (COVID-19), local authorities will use 2019 assessment data as a proxy in the low prior attainment factor in local funding formulae for the 2020 and 2021 reception and year 6 cohorts.

School improvement

30: Local authorities currently receive the school improvement monitoring and brokering grant to support them in delivering their school improvement functions in maintained schools – to monitor the performance of maintained schools, broker school improvement provision, and exercise their statutory intervention powers. Between 29 October and 26 November 2021, we consulted on reforming how this activity is funded, proposing that the grant be phased out and local authorities be enabled to deduct from maintained school budgets to support the costs of this activity instead. We are aiming to publish our government response confirming our approach for financial year 2022 to 2023 in early January 2022.

Reviewing and consulting on the pre-16 formula

31: The department appreciates that there may be limitations in the way local authorities are currently able to work due to the coronavirus (COVID-19) situation, although we expect a continued easing of restrictions.

32: However, local authorities must continue to do their best, within the circumstances, to engage in open and transparent consultation with all maintained schools and academies in their area, as well as with their schools forums, about any proposed changes to the local funding formula, including the principles adopted and any movement of funds between blocks.

33: Any consultation should include a demonstration of the effect of modelling such changes on individual maintained schools and academies.

34: Local authorities also need to be setting out whether changes would bring their local formula closer to, or further from, the NFF.

35: Local authorities should communicate proposed formula changes to all bodies affected by the changes.

36: The local authority is responsible for making the final decisions on the formula; however, each local authority’s process should have ensured that there was sufficient time to gain political approval before the APT deadline in January 2022.

37: Political approval means approval in line with the local authority’s local scheme of delegation, so this may be decisions made by the council cabinet, cabinet member or full council. The schools forum does not decide on the formula.

38: Local authorities should, as much as is possible, ensure that they allow sufficient time for wider consultation with schools, agreement by their schools’ forum, and political approval if they wish to transfer funding out of the schools block, or submit a disapplication request.

39: Further information is included in the movement between blocks section of this guidance.

40: Schools forums can meet remotely. This includes, but is not limited to, telephone conferencing, video conferencing, live webcast, and live interactive streaming.

Delegated funding

Local authority funding formula factors for 2022 to 2023

41: There are 14 funding factors in 2022 to 2023:

• Basic entitlement – compulsory
• Deprivation – compulsory
• Minimum level of per-pupil funding for primary and secondary schools –compulsory
• Prior attainment – optional
• Looked after children (LAC) – optional
• English as an additional language (EAL) – optional
• Pupil mobility – optional
• Sparsity – optional
• Lump sum – optional
• London fringe (only for eligible authorities) – optional
• Split sites – optional
• Rates – optional
• Private finance initiative (PFI) contracts – optional
• Exceptional circumstances (with ESFA agreement) – optional

Required proportion of funding allocated through pupil-led factors

42: DfE has provided an updated schools block dataset through the APT. Local authorities should use this dataset when setting their local funding formulae; this will ensure maintained schools and academies are funded on the same basis.

Basic entitlement

43: This compulsory factor assigns funding on the basis of individual pupils, with the number of pupils for each maintained school or academy based on the October 2021 pupil census.

44: Funding is allocated according to a basic per-pupil rate.

45: There is a single rate for primary age pupils, which must be at least £2,000.

46: There can be different rates for KS3 and KS4, with a minimum of £3,000 for each.

47: In many cases, local authorities added in the rolled-in pay and pensions amounts to their basic per-pupil rates in 2021 to 2022. As set out in the guide no separate adjustments are needed in the local formulae- beyond what was already done in 2021 to 2022, to account for these grants in 2022 to 2023.

48: Local authorities can choose to increase the pupil number count for schools with higher reception pupil numbers in the January 2021 census, rather than the October 2020 census.

49: The department does not include reception uplift in the NFF. Local authorities currently using a reception uplift factor should consider whether to do so in 2022 to 2023.

Deprivation

50: This is a compulsory factor.

51: Local authorities can use one, two or all FSM, FSM6, and the income deprivation affecting IDACI to calculate the deprivation factor.

52: The department measures eligibility for current FSM using the previous October census. In a change for the 2022 to 2023 NFF, for FSM6 (pupils recorded as eligible for free school meals at any time in the last 6 years) we now also use the October 2020 census (rather than the January census, as in previous years). The FSM6 in the APT is based on January 2021 census.

53: For schools not open in October 2020, which are included in the 2021 to 2022 APT, the APT FSM6 data is used for the 2022 to 2023 NFF.

54: The IDACI measure uses 6 bands. Different values can be attached to each band and different unit values can be used for primary and secondary within each band. The Ministry for Housing, Communities and Local Government (MHCLG) published new IDACI data on 26 September 2019.

55: The 2022 to 2023 NFF, as in the previous year, uses IDACI 2019 ranks to group each lower super output area (LSOAs, an area with typically about 1,500 residents) into one of six bands of decreasing deprivation. The table below shows how the bands are defined in the 2022 to 2023 NFF:

IDACI data	Ranks	Band
Pupils in the most deprived 2.5% of LSOAs	1 to 821	A
Pupils in the next 5% most deprived LSOAs	822 to 2463	B
Pupils in the next 5% most deprived LSOAs	2464 to 4105	C
Pupils in the next 5% most deprived LSOAs	4106 to 5747	D
Pupils in the next 10% most deprived LSOAs	5748 to 9032	E
Pupils in the next 10% most deprived LSOAs	9033 to 12316	F

MPPL for primary and secondary schools

56: This is a compulsory factor. It must be used in local funding formulae, at the NFF cash values.

57: The purpose of this factor is for local authorities to provide the NFF MPPLs to every school. All local authorities must implement the MPPLs by following the same methodology used in the NFF, summarised below and detailed in the NFF technical notes

58: To ensure consistency for all schools, including those with non-standard year groups, DfE has simplified the calculation for a schools individual minimum per-pupil levels within the NFF. For all schools, the department now applies the calculation below:

(number of primary year groups × £4,265) + (number of KS3 year groups × £5,321) + (number of KS4 year groups × £5,831)

divided by

Total number of year groups

59: This provides per-pupil funding of at least £4,265 for each primary school, and £5,525 for each secondary school with standard structures of seven and five year groups respectively. For middle schools, all-through schools, and other schools with a non-standard year group structure, this will produce a specific minimum per-pupil value that relates to the number of year groups in each phase.

60: When calculating the MPPLs for individual schools, local authorities should take the number of year groups from the APT, which is the approach taken in the NFF. When completing the APT, local authorities should only list the number of year groups in each Key Stage which have pupils in them at present or will do so in the upcoming year. Where a school will have empty year groups in the upcoming year, for example a school which has recently opened, these should not be included in the APT.

61: The only factors not included in per-pupil funding for the purpose of the MPPL calculation are premises and growth funding. Any prior year adjustments local authorities have made should also be excluded from the calculation.

62: Any capping and scaling cannot take a school’s per-pupil funding, defined above, below the MPPLs. The only further calculation that local authorities can make once their formula has provided the minimum levels is, for maintained schools only, to deduct funding for de-delegated central services if the schools forum has agreed this can be taken from their budget shares in 2022 to 2023. It should also be noted the risk protection arrangement (RPA) factor is also exempt from the MPPLs

63: Local authorities have the option, as with other aspects of the school funding regulations, to request to disapply the use of the full NFF MPPL values. Such requests should be exceptional and only made on the grounds of affordability.

64: While the department will consider any individual request on its merits, it expects the commitment to MPPLs to be implemented in full, locally and both local authorities and schools should work on that basis. The department will scrutinise any disapplication requests in this context.

65: Disapplication requests may also be submitted to alter the NFF methodology, for specific schools only, where the local authority can show that the relevant MPPL value for that school is skewed significantly by unusual year group sizes. For example, a local authority may want to provide a higher minimum per pupil level for an all-through school with significantly larger secondary than primary year group sizes.

Lower prior attainment

66: This is an optional factor used by most local authorities. Local authorities can apply this factor for: - primary pupils identified as not achieving the expected level of development in the early years foundation stage profile (EYFSP) - secondary pupils not reaching the expected standard in KS2 at either reading or writing or maths

67: Since 2017 to 2018, the department has weighted the LPA factor for some secondary year groups so that year-on-year fluctuations in pass-rates following the introduction of the more challenging KS2 tests in the 2015 to 2016 academic year do not disproportionately affect the distribution of funding through the LPA factor in the mainstream formula.

68: In 2022 to 2023, the department has carried forward the weightings it used in 2021 to 2022 for the year 7 to year 10 cohorts, so they will apply to the year 8 to year 11 cohorts respectively.

69: For the financial year 2022 to 2023, the weightings are:^{[footnote 1]}

• pupils in year 7 to 9 inclusive in October 2021: 65%
• pupils in year 10 in October 2021: 64%
• pupils in year 11 in October 2021: 58%

70: This is included under Schedule 3, paragraph 4 of the 2021 Regulations..

71: Following the cancellation or incompleteness of assessments in summer 2020 and summer 2021 due to coronavirus (COVID-19), local authorities will not be able to use this data as part of setting a low prior attainment factor in local funding formulae. Instead, local authorities will use 2019 assessment data as a proxy for assessments which would have taken place in 2020 to 2021. This will be reflected in the APT. The same national weighting of 65%^{[footnote 2]} for pupils in year 9 should therefore also be used for those who are years 7 and 8 in the academic year 2022 to 2023.

72: The weightings will operate in the same way as in 2020: the number of pupils identified as having LPA in the data will be multiplied by the relevant weighting to determine the number of pupils eligible for the factor for funding purposes.

73: Local authorities will not be able to change the weighting but will be able to adjust their secondary LPA unit value as in previous years. This will enable local authorities, in most cases, to maintain their LPA factor at previous levels without significant turbulence.

74: LPA funding has been allocated to all pupils identified as not reaching the expected standard at the previous phase, regardless of their year group. It does not only apply to those pupils in their first year of schooling.

75: As with current funding arrangements, pupils who have not undertaken the assessment are given the overall average attainment score of their year group, so are taken into account when calculating a school’s LPA rate.

Looked after children (LAC)

76: This is an optional factor.

77: Local authorities can apply a single unit value for any child who has been looked after for one day or more, as recorded on the LA SSDA903 return at 31 March 2021.

78: The department maps this data to schools using the January school census to identify the number of LAC in each school or academy.

79: The department does not use a LAC factor in the NFF. Instead, the department increased the pupil premium plus rate from 2019 to 2020 from £1,900 to £2,410. Local authorities currently using this factor should consider whether to do so in 2022 to 2023.

English as an additional language (EAL)

80: This is an optional factor.

81: Pupils identified in the October census with a first language other than English may attract funding for up to three years after they enter the statutory school system. Local authorities can choose to use indicators based on one, two, or three years, and there can be separate unit values for primary and secondary.

82: The department has used three years in the NFF. Local authorities should consider this when setting their local formula.

Pupil mobility

83: This is an optional factor.

84: The mobility factor allocates funding to schools with a high proportion of pupils with an entry date in the last 3 years which is not typical. For year groups 1 to 11, ‘typical’ means that the first census on which a pupil is recorded as attending the school (or its predecessors) is the October census. ‘Not typical’ means that the first census a pupil is recorded as attending the school is a January or May census. For the reception year, ‘typical’ means the first census in October or January.

85: This mobility methodology involves tracking individual pupils using their unique pupil ID through censuses from the past 3 years. If the first census when the pupil was in the school was a spring or summer census, they are a mobile pupil. This excludes reception pupils who start in January. This methodology also excludes pupils who joined in the summer term after the summer census, or pupils who joined in October before the autumn census.

86: In light of the cancellation of the May 2020 census, pupils who joined a school between January 2020 and May 2020 attract funding for mobility based on their entry date, rather than by virtue of the May school census being their first census at the current school. This change will be reflected in the APT and ensures that the factor continues to operate in as similar a way as possible to what it would have done if the May census had not been cancelled. To be eligible for mobility funding, the proportion of mobile pupils in a school must be above the threshold of 6%. The department has allocated a per pupil amount in respect of all mobile pupils above that threshold. The department has published the NFF factor values for mobility as part of the 2022 to 2023 NFF publication.

87: Mobility will continue to be an optional factor for local authorities’ formulae. The department has supplied local authorities with mobility data in the APT.

88: Further information is available in the NFF technical note

Sparsity

89: This is an optional factor.

90: The sparsity factor allocates funding to schools that are remote, measured by sparsity distances, and are small, based on average year group size.

91: There is a change to the way that sparsity distances have been measured this year, by road distances instead of straight-line distances. To calculate a school’s sparsity distance, we take all the pupils for whom it is the nearest compatible school and find the average shortest road distance from these pupils’ home postcodes to their second nearest compatible schools. Further details are provided in the NFF technical note.

92: In addition, the factor includes a new distance threshold taper this year. This means that where schools’ sparsity distances are marginally below the main distance thresholds for sparsity funding, they will still attract some allocation through the NFF. The distance threshold taper has been set 20% below the main distance thresholds.

93: A school is eligible for sparsity funding in the NFF if:

• it’s sparsity distance is equal to or above the main distance threshold, or above the tapered distance threshold, and
• the average year group size (calculated as the APT-adjusted pupil count divided by number of year groups present at the school) is below the relevant size threshold

School phase	Size threshold: Maximum average number of pupils per year group	Main distance threshold: Minimum average distance to second nearest compatible school	Distance taper threshold: Minimum average distance to second nearest compatible school
Primary	21.4	2 miles	1.6 miles
Secondary	120	3 miles	2.4 miles
Middle	69.2	2 miles	1.6 miles
All-through	62.5	2 miles	1.6 miles
	[footnote 3]

94: Local authorities can reduce the average year group size threshold or increase the distance threshold in local funding formulae. The distance taper threshold is optional in local funding formulae for 2022 to 2023.

The amount that sparse schools receive

95: The maximum sparsity values in the 2022 to 2023 NFF are £55,000 for primary schools and £80,000 for secondary, middle, and all-through schools. Different values can be set in local funding formulae across all phases. The maximum permissible value is £100,000 (including the London fringe uplift).

96: In the NFF, schools’ allocations are tapered according to average year group size ^{[footnote 4]} , so that the smaller the school the greater the allocation. Schools with a sparsity distance equal to or greater than the main distance threshold (2 or 3 miles) and an average year group size of less than half the year group threshold receive 100% of the sparsity funding for their phase. More information on the calculation of schools’ sparsity weightings and allocations is available in the NFF technical note. Examples are provided below.

97: Example 1: School A’s sparsity allocation through the NFF.

School phase	Average number of pupils per year group	Average distance to second nearest compatible school	Eligible for sparsity funding?
Primary	16.05	2.2 miles	Yes

98: School A is small and remote enough to be eligible for sparsity funding. If the sparsity value is the maximum NFF's value of £55,000, using the NFF average year group size taper calculation, the school will receive £27,500, (1 – ((16.05 – 10.7) / 10.7)) * 55,000 (allowing for rounding). ^{[footnote 5]}:

99: Example 2: School B's sparsity allocation through the NFF.

School phase	Average number of pupils per year group	Average distance to second nearest compatible school	Eligible for sparsity funding?
Primary	10.70	2.2 miles	Yes

100: School B is small and remote enough to be eligible for sparsity funding. If the sparsity value is the maximum NFF’s value of £55,000, applied using the NFF average year group size taper calculation, the school will receive £55,000 (1 – ((10.7 – 10.7) / 10.7)) * 55,000 (allowing for rounding). ^{[footnote 5]}. This is the maximum sparsity allocation through the NFF for primary schools, which all primary schools with a sparsity distance of 2 miles or more, and with 10.7 or fewer pupils on average per year group attract.

101: These examples assume that the year group size threshold and distance threshold are as set out in the paragraph above, although local authorities can amend the thresholds in local funding formulae also as outlined above if they wish.

102: These examples also assume that allocations are determined by the NFF's average year group size taper calculation. Local authorities can instead determine schools’ allocations by a ‘continuous taper’ ^{[footnote 5]} or a fixed sum. Unlike in the NFF methodology, the continuous taper means schools with an average year group size of less than half the year group threshold will not receive 100% of the sparsity funding for their phase. Instead, they will receive half the maximum. The fixed sum means all eligible schools will receive the exact same sparsity amount irrespective of their size.

103: For example, with a continuous taper, school A would receive £13,750 ((21.4 – 16.05) / 21.4) * 55,000 and school B would receive £27,500 ((21.4 – 10.07) / 21.4) * 55,000 ^{[footnote 6]}. With a fixed sum, each school would receive the same amount, depending on the factor value that is adopted in local funding formulae. Any one of these methods of calculation (the NFF taper, the continuous taper, or the fixed sum) can be selected in local funding formulae.

Distance taper threshold

104: Schools with a sparsity distance between the distance taper threshold and the main threshold will attract some sparsity funding through the NFF. This is a change that has been introduced for 2022 to 2023. The amount depends on both their size and how far away their sparsity distance is from the main threshold. The closer the school’s sparsity distance to the main distance threshold, the greater their allocation and vice versa. Schools with a sparsity distance half-way between the distance taper threshold and the main threshold will receive half as much as they would were they equal to or above the main threshold.

105: The distance taper threshold is optional in local funding formulae for 2022 to 2023. Where used, it must be set 20% below the main distance thresholds used in the local funding formula, as in the NFF. It can be used irrespective of whether the NFF year group taper, the continuous taper, or the fixed sum is used. The same principle applies across these methodologies, that the further away the school is from the main threshold, the smaller their allocation. ^{[footnote 7]}

106: Example 3: School C’s sparsity allocation through the NFF.

School phase	Average number of pupils per year group	Average distance to second nearest compatible school	Eligible for sparsity funding?
Primary	16.05	1.9 miles	Yes

107: School C is eligible for sparsity funding through the distance taper threshold, as its average number of pupils per year group is less than the size threshold for its phase and its sparsity distance is greater than the distance taper threshold but less than the main distance threshold.

108: The distance taper threshold is applied after the NFF average year group size taper has been applied. If the sparsity value is the maximum NFF's value of £55,000, the sparsity value applying the average year group size taper is £27,500 (just as it was in in example 1). Then the distance taper methodology is applied as (1 – ((2 – 1.9) / (2 – 1.6)))*27,500 ^{[footnote 8]}. In this example, the school will therefore receive £20,625. This is 75% of the amount the school would have received had its sparsity distance been equal to or greater than the main distance threshold.

109: Example 4: School D’s sparsity allocation through the NFF.

School phase	Average number of pupils per year group	Average distance to second nearest compatible school	Eligible for sparsity funding?
Primary	16.05	1.7 miles	Yes

110: School D is eligible for sparsity funding through the distance taper threshold, as its average number of pupils per year group is less than the size threshold for its phase and its sparsity distance is greater than the distance taper threshold but less than the main distance threshold.

111: As above, the distance threshold is applied after the NFF average year group size methodology. If the sparsity value is the maximum NFF's value of £55,000, the sparsity value applying the average year group size taper is £27,500, as shown in examples 1 and 3. The distance taper threshold is applied as (1 – ((2 – 1.7) / (2 – 1.6)))* 27,500 ^{[footnote 8]}. In this example, the school will therefore receive £6,875. This is 25% of the amount the school would have received had its sparsity distance been equal to or greater than the main distance threshold. School D would receive less than School C due to being further away from the main distance threshold.

Local flexibilities and applications

112: As mentioned, local authorities have some flexibility over the design of the sparsity factor in 2022 to 2023. Any changes can be made in the APT, and updates would be recalculated automatically. In addition, local authorities can make applications to the ESFA about schools sparsity distances and very small, sparse secondary schools, as follows.

• local authorities can make exceptional applications for schools not meeting the distance criterion where there is evidence that the average shortest road distance for a school’s nearest pupils to their second nearest school should be materially different to the one supplied by us. We are not expecting this to be the case given we have applied the same methodology to all schools nationally and quality assured distances. We will not consider applications which seek to apply an alternative policy or design for measuring remoteness.

• local authorities can make an application to ESFA to include an exceptional circumstance of up to £50,000 for very small sparse secondary schools, which would otherwise be unable to attract sufficient funding to remain viable. Local authorities can only make an application for this where schools have:

  • pupils in years 10 and 11
  • 350 pupils or fewer
  • a sparsity distance of 5 miles or more
• where approval was given in 2021 to 2022 to use an exceptional circumstance for very small sparse secondary schools, that approval can carry forward to 2022 to 2023 if the latest pupil data has not changed significantly and include the above criteria.

113: The department produces sparsity distances for all schools in the schools block dataset and makes them available to local authorities.

114: If a school opens after the sparsity distances have been calculated, the local authority can make an exceptional application for the school. The process is the same for schools that are affected by neighbouring schools closing. The department will not recalculate figures during the year in these situations.

115: An existing school, qualifying for sparsity funding, would not lose the funding in year if a new school opened nearby.

116: Local authorities should agree exceptional applications with their schools forum before submitting to ESFA for consideration.

Lump sum

117: This is an optional factor used by most local authorities.

118: Local authorities can set a flat lump sum for all phases or differentiate the sums for primary and secondary.

119: Local authorities should give middle schools a weighted average, based on the number of year groups in each phase.

120: The maximum lump sum is £175,000, even for schools that receive a London fringe uplift.

121: The lump sum may be different for primary and secondary schools, and the maximum permitted value for either phase in local formulae continues to be £175,000 (including the London fringe uplift).

122: All-through schools will receive the secondary lump sum value and middle schools will receive an average lump sum value based on the number of primary and secondary year groups in the school.

123: This worked example shows how the lump sum amount for a middle school is calculated. In this example, the primary lump sum is set at £100,000, and the secondary lump sum is set at £120,000.

School phase rate	Lump sum amount
3 year groups at primary rate ((3/5) x £100,000)	£60,000
2 year groups at secondary rate ((2/5) x £120,000)	£48,000
Total rate for all 5 year groups	£108,000

124: This middle school has a total of 5 year groups: 3 year groups (years 4 to 6) attracting the primary rate, and 2 year groups (years 7 to 8) attracting the secondary rate.

125: Where schools have amalgamated during the financial year 2021 to 2022, or on 1 April 2021, they will retain the equivalent of 85% of the predecessor schools’ lump sums for the financial year 2022 to 2023.

126: For example, assuming a lump sum of £100,000, the additional payment would be £70,000 calculated as ((100,000 x 2) x 85% - 100,000).

127: Local authorities can apply to ESFA to reduce this in exceptional circumstances.

128: Where schools amalgamate after 1 April 2022, the new school will receive funding equivalent to the formula funding of the closing schools added together for the appropriate proportion of the year. This means that they receive the combined lump sum for the remainder of the year and 85% in the following year, as outlined above.

129: Local authorities may apply to provide a second year of protection.

130: Applications must specify the level of protection sought, although in general the department would not expect the additional protection to exceed 70% of the combined lump sums. The department will consider applications on a case-by-case basis.

London fringe

131: This is an optional factor applicable only to Buckinghamshire, Essex, Hertfordshire, Kent, and West Sussex.

132: The purpose of this factor is to support schools that have higher costs because they are in the London fringe area, and only part of the local authority is in this area. The multiplier is applied to the 7 pupil-led factors, the lump sum factor, and the sparsity factor.

133: The factor can be applied as a multiplier of 1.0156, or as a multiplier of the differential of the area cost adjustment of London fringe and non-London fringe zones within the local authority.

134: The differentials are:

• Buckinghamshire: 1.0176
• Essex: 1.0339
• Hertfordshire: 1.0306
• Kent: 1.0368
• West Sussex: 1.0569

Split sites

135: This is an optional factor.

136: The purpose of this factor is to support schools that have unavoidable extra costs because the school buildings are on separate sites. Allocations must be based on objective criteria for the definition of a split site, and for how much is paid.

137: A local authority’s formula can include a factor to provide additional funding to schools that operate on more than one site.

138: Criteria for providing extra funding should be clear and transparent, incorporating clear and objective trigger points, and a clear formula for allocating additional funding. All schools and academies that meet the criteria will be eligible for split site funding.

139: Examples of clear trigger points are:

• the sites are a minimum distance apart, as the crow flies, and the sites are separated by a public highway
• the provision on the additional site does not qualify for an individual school budget share through the DSG
• the school has remote playing fields, separated from the school by a minimum distance, and there is no safe walking route for the pupils
• a percentage of staff are required to teach on both sites on a daily basis, to support the principle of a whole school policy, and to maintain the integrity of the delivery of the national curriculum
• a minimum percentage of pupils are taught on each site on a daily basis

140: Examples of a clear formula for funding schools with split sites are:

• a lump sum payment
• a per-pupil rate
• a rate per square metre of the additional site

141: Values for primary and secondary schools may be different. There may be one rate of payment for the first additional site, and a separate rate for each additional site. Payment rates may be stepped, for example as the distance between sites increases.

142: Schools sharing facilities, federated schools, and schools with remote sixth forms or remote early years provision are not eligible for split site funding.

Rates

143: This factor is optional.

144: Rates will be paid by the ESFA directly to billing authorities on behalf of all maintained schools and academies from April 2022. As ESFA will be making business rates payments directly to billing authorities, less cash will need to be moved to schools. Schools’ budgets will continue to include the rates funding, even though ESFA will no longer pay over physical cash.

145: Local authorities no longer need to make additional allocations to schools during the financial year 2022 to 2023 (outside of the funding formula).

146: Local authorities are required to enter the 2022 to 2023 NFF NNDR values in the APT. Both the local authorities and schools budgets will include this indicative NFF NNDR figure but the APT will also show the cash position i.e the total DSG SB allocation after the deduction of the 2022 to 2023 NFF NNDR figure. Further information will be available in the APT guidance.

147: Local authorities can claim for any adjustments to schools’ rates bills for 2021 to 2022 for the final time in the 2022 to 2023 APT. Final adjustments will be received by local authorities in the 2023 to 2024 NFF allocations, with payments reflected in their DSG from April 2023. This is to ensure local authorities that wish to claim back money for historic adjustments arising in 2021 to 2022, are correctly funded.

148: After this point, all adjustments will be required to be submitted by billing authorities using the ESFA portal, with reconciliation payments made directly to billing authorities in year.

149: Local authorities should provide estimates of their 2022 to 2023 rates figures based on the known changes to rateable values and taking into account the 2022 to 2023 multiplier in the 2022 to 2023 APT. This information will be used to aid the new process by providing useful estimates for comparisons for future years.

150: Local authorities do not need to record rates data via the APT after 2022 to 2023.

151: Rates should continue to be reflected in the Section 251 outturn statement, and in each school’s accounts. From April 2022 onwards billing authorities will communicate the cost of schools’ rates to the ESFA by uploading rates bill data to an online billing portal. Local authorities and schools will have observer access to the online rates billing portal and the information it holds, to inform their accounting figures.

152: All state funded schools will retain liability for their own business rates, except for community and voluntary controlled schools for which liability will continue to rest with the local authority. Liable parties will continue to retain responsibility for the payment of any penalty charges incurred because of late or non-payment in instances where they are at fault, for example, if an academy converter fails to inform their billing authority of their conversion.

153: For any instances where a late or missed payment arises because of an ESFA error, the responsibility of schools (or local authorities for community or voluntary controlled schools), for payment of any resulting penalty charges is waived and the ESFA will cover any penalty charges incurred. Examples of such cases could include late payment due to processing delays or data upload failure.

Private finance initiative (PFI) contracts

154: This is an optional factor.

155: The purpose of this factor is to support schools that have unavoidable extra premises costs, because they are a PFI school, and to cover situations where the PFI ‘affordability gap’ is delegated and paid back to the local authority.

156: Methodologies for funding PFI schools must be objective and clear, and capable of being replicated for academies. The purpose of the factor is to fund the additional costs to a school of being in a PFI contract, not necessarily the full cost, as some costs may be covered within other factors.

157: An acceptable methodology would generally contain some of the features set out below.

158: These examples are intended to help local authorities formulate a clear process for funding; it is unlikely that a local authority would need to incorporate all of the features into its own policy.

159: If a PFI factor is used, all PFI schools should receive it; there may be different arrangements between contracts but, within a contract, all PFI schools should receive funding on an equivalent basis.

160: This does not necessarily mean all schools should receive the same amount per pupil, but they should be treated on a consistent basis.

161: Examples of a clear formula for funding PFI schools are:

• allocations are in accordance with an original governors’ agreement
• allocations reflect the difference between the PFI contractual cost, and the grant received by the local authority, less any local authority contribution

162: Methodologies for calculating allocations could include:

• a percentage of the school’s budget share
• a per pupil rate
• a rate per square metre of floor area
• a historical lump sum previously agreed, and indexed by a percentage per year

163: Agreements can refer to proportions or elements of the schools budget share, which, due to changes in funding arrangements, may have changed significantly. Where this situation occurs, the department would expect schools and local authorities to work together to agree an alternative arrangement, so that neither party is significantly disadvantaged.

164: If an authority considers that there are circumstances which may have a significant impact on an existing PFI contract, (including potential grounds for termination arising), please contact DfE Private Finance Team (Private.FINANCE@education.gov.uk) to discuss this in the first instance as such matters can impact your funding.

Exceptional circumstances

165: This is an optional factor.

166: Local authorities can apply to ESFA to use exceptional circumstances relating to school premises. These may be for rents, or joint-use sports facilities, for example.

167: Exceptional circumstances must relate to premises costs.

168: Local authorities should only submit applications where the value of the factor is more than 1% of a school’s budget and applies to fewer than 5% of the schools in the local authority’s area.

169: Local authorities can use exceptional circumstances used in 2021 to 2022 (for pre-existing, and newly qualifying schools) in 2022 to 2023, if the qualification criteria are still met.

170: Where local authorities have already received approval for exceptional circumstances from 2017 to 2018 onwards, they can continue to use the approved factors if the criteria is still being met. Where the latest approval was prior to 2017 to 2018 the local authority will need to submit a new disapplication request for consideration.

171: Where an exceptional circumstance has already been approved for particular schools, it’s permissible for a further school or schools to receive the factor where a change in circumstances meets the existing approved criteria, providing that the cost to the additional school exceeds 1% of its budget share (as calculated through the APT), and that the factor still applies to fewer than 5% of schools in the local authority area.

172: Local authorities should have applied for any new exceptional circumstances in 2022 to 2023 by the disapplication deadline dates, setting out the rationale for the factor, and demonstrating that the criteria are met.

173: The deadline date for local authorities to submit any application for exceptional circumstances was 19 November 2021. This is for the department to ensure decisions were communicated back to local authorities prior to the APT submission deadline.

174: Exceptional circumstances previously approved include:

• rents
• joint use of leisure facilities by contractual agreement
• building schools for the future (BSF) schemes (additional contribution to lifecycle maintenance costs)
• hire of PE facilities
• listed buildings
• school with a farm included as part of its educational provision

175: Each application is considered on its own merits and it should not be assumed that a future application would be successful simply because it falls into one of the categories shown above.

176: Local authorities are not obliged to request additional factors, but in considering whether to do so, they should look at the circumstances of academies and free schools as well as maintained schools.

177: Local authorities can apply for an exceptional circumstance by sending the disapplication proforma to LA.Disapplications@education.gov.uk.

178: The department continues in 2022 to 2023 to use two different disapplication proformas, one for block movement requests and another for all other requests. These two proformas are published alongside this guidance.

179: These specific proformas will enable ESFA to process and understand the details of each request more quickly.

Variations to pupil numbers

180: Local authorities are no longer expected to request approval to increase the pupil numbers used for calculating funding for specific schools where:

• there has been, or is going to be, a reorganisation
• a school has changed, or is going to change, its admission limit

181: However, the department expects local authorities to present any pupil variations to their schools’ forum, to illustrate the impact to overall funding, and on specific schools’ budgets.

182: In general terms, the department would wish to continue to provide protection for all schools, including those with downward trends in pupil numbers, so any request for a negative adjustment would still require a disapplication, and need to include compelling evidence as to why this should be approved. Other increases not falling within the categories above would require a disapplication.

183: Where a new school is due to open, the regulations require that local authorities must estimate the pupil numbers expected to join the school in September and fund, accordingly, again explaining the rationale underpinning the estimates.

184: Under these regulations, local authorities must estimate pupil numbers for all schools and academies, including free schools, where they have opened in the previous seven years, and are still adding year groups. Local authorities can adjust estimates each year, to take account of the actual pupil numbers in the previous funding period. The department has included more information in the treatment in the APT of new and growing schools section of this guidance.

185: All mainstream free schools are recoupable from the first year of opening. This means ESFA will provide funding directly to the free schools opening, and recoup the funding from local authorities from the estimated pupil numbers in the APT.

186: Whilst the growth fund is a suitable route for short-term increases in pupil numbers and bulge classes, local authorities should vary pupil numbers in situations where the scale of change in numbers is sufficiently great and permanent that it should be applied to all factors in the formula.

187: If pupil numbers are not adjusted upwards to reflect actual intake, DfE will adjust amounts recouped to enable the department to properly fund academies and free schools affected by this.

188: The department has included more information in the flowchart at Annex 1 about when to request a variation, and when to use the growth fund. A text version of the flowchart is at Annex 1a.

Minimum funding guarantee (MFG)

189: Local authorities will continue to set a pre-16 MFG in their local formulae, to protect schools from excessive year-on-year changes and to allow changes in pupil characteristics (for example, reducing levels of deprivation in a school) to flow through.

190: Local authorities will be able to set an MFG between +0.5% and +2% per pupil. Any local authorities wanting to set an MFG outside of these parameters must apply for exceptional permission using the disapplication proforma.

191: Local authorities need to consult on any changes to the level of the MFG, as with the rest of the formula.

192: The MFG applies to pupils in reception to year 11. Early years pupils and post-16 pupils are excluded from the calculation.

193: The following elements of funding need to be added to schools’ budget shares before the MFG calculation:

• funding deducted through the negative factor for schools entered into the risk protection arrangement under regulation 19 of the Schools and Early Years Finance (England) Regulations
• funding for de-delegated services that have been agreed with the schools forum under regulations 11(5) and 11(6)
• negative adjustments for excluded pupils during the year under regulation 29

194: The following elements of funding are automatically excluded from the MFG calculation, as not doing so would result in excessive protection, or would be inconsistent with other policies:

• the 2022 to 2023 lump sum: this is excluded from both the baseline and 2022 to 2023 funding so that schools are protected against significant change in the lump sum between years
• any higher lump sum paid under the regulations in 2021 to 2022 for amalgamated schools: this is excluded from the baseline only
• any higher lump sum to be paid under the regulations in 2022 to 2023 for amalgamating schools: this is excluded from the 2022 to 2023 funding only
• the 2022 to 2023 sparsity factor: this is excluded from both the baseline and 2022 to 2023 funding so that schools are protected against significant change in the sparsity value between years
• rates: these are excluded from both the baseline and 2022 to 2023 funding, at their respective values for each year
• any positive adjustments for excluded pupils during the year under regulation 29

195: The school funding regulations set out requirements for the MFG calculation in detail, under schedule 4.

196: The regulations relating to the MFG allow for technical adjustments. These do not need approval from the Secretary of State but will need to be shown and explained in the tables contained within the APT. They include:

• where a budget was held centrally in the previous financial year and has now been delegated. This could include services that were previously funded centrally but have now been delegated, or additional funding released to schools as historic commitments have ended
• movement of funding from the schools block to the high needs block, but only where the high needs block is now responsible for funding amounts that had previously been met by a school's delegated budget; in other words, there is a transfer of funding responsibility, not just a transfer of funding between blocks to meet cost pressures

197: All other funding will be in the MFG baseline and there will be no other automatic adjustments. Local authorities can, however, exclude other premises factors from the MFG without a disapplication, if they wish to mirror the NFF.

198: Most approvals to disapply the MFG for 2021 to 2022 were specific to that year, and DfE does not expect these to be repeated. The department will not carry forward any previous approvals.

199: The deadline for local authorities to submit any applications to disapply the MFG for 2022 to 2023 was 11 October 2021. The purpose of this deadline was to get decisions back to local authorities before the APT is issued in December. Any later requests should have been submitted by 19 November 2021 for them to be considered to meet the APT submission deadline.

200: There are two separate proformas for block movement requests and general requests. It is important for local authorities to use the specific proformas and send them to LA.Disapplications@education.gov.uk, This will enable the department to process and understand the details of each request more quickly.

201: Local authorities should provide information on the equality impact assessment for any disapplication request.

202: Exceptional requests to disapply the MFG will only be considered if there is a significant change in a school’s circumstances or pupil numbers. The department will only consider applications where the inclusion of a factor in the MFG will lead to significant inappropriate levels of protection. Local authorities should provide detailed information on the financial impact of any request.

203: Examples of MFG disapplication requests that have been approved previously include:

• schools that previously qualified for a split site, PFI or exceptional circumstance but are no longer eligible (or vice versa)
• where the normal operation of the MFG would produce perverse results for very small schools with falling or rising rolls
• secondary schools that are admitting primary age pupils who would otherwise be over protected at the secondary age weighted pupil unit of funding
• where over protection would otherwise occur, for example where additional funding has been distributed in the previous year and the local authority can demonstrate that the funding is genuinely one-off

204: The worked example below shows how the MFG will be calculated (based on an MFG of a positive 0.5%):

Line	Description	Items and calculation	Amount
1	School budget share (SBS) 2021 to 2022 (inclusive of any MFG and capping)	N/A	£2,115,000
2	2021 to 2022 rates	N/A	£90,000
3	2022 to 2023 additional lump sum for amalgamating schools	N/A	£70,000
4	2022 to 2023 lump sum	N/A	£100,000
5	2022 to 2023 sparsity value (including any additional sparsity funding for very small secondary schools)	N/A	£30,000
6	Agreed MFG exclusions and technical adjustments	N/A	£0
7	2021 to 2022 MFG baseline (including TPG and TPECG funding provided in the APT)	1 - (2 + 3 + 4 + 5 + 6)	£1,825,000
8	Funded number on roll at October 2020	N/A	500
9	MFG baseline value per pupil	N/A	£3,650
Line	Description	Items and calculation	Amount
10	MFG protected value per pupil	9 x 100.5% [footnote 8]	£3,668.25
11	Formula funding 2022 to 2023	N/A	£1,983,200
12	2022 to 2023 rates	N/A	£95,600
13	2022 to 2023 lump sum	N/A	£100,000
14	2022 to 2023 sparsity value (including any additional sparsity funding for very small secondary schools)	N/A	£30,000
15	Agreed MFG exclusions and technical adjustments	N/A	£0
16	2022 to 2023 base funding	11 - (12 + 13 + 14 + 15)	£1,757,600
17	Funded number on roll October 2021	N/A	490
18	2022 to 2023 base funding per pupil	16 / 17	£3,586.94
19	Guaranteed level of funding	10 x 17	£1,797,442.50
20	MFG adjustment	19 – 16	£39,842.50
21	Final 2022 to 2023 SBS	11 + 20	£2,023,042.50

205: The MFG calculation for mainstream schools applies only to schools block funding. Funding from the early years block, high needs block or from ESFA for post-16 pupils is excluded from the calculation, so has not been shown here as it does not form part of the schools block formula funding.

206: The department will provide a consistent methodology to those local authorities that have received approval to disapply the MFG because the profile of primary and secondary age pupils in a school is changing.

Capping and scaling

207: It is likely that protection will still be required in some areas because of changes to formulae, so the department will again allow overall gains for individual schools to be capped as well as scaled back to ensure that the formula is affordable.

208: It is worth noting that the schools NFF will not include a gains cap or alternative gains cap in 2022 to 2023. Therefore, the department will not be accepting disapplication’s to use the alternative gains cap, as local authorities wishing to mirror the NFF will not need to use it.

209: Local authorities can continue to choose to cap any gains schools receive through the 2022 to 2023 local formula, unlike the NFF where no gains cap is applied. Capping and scaling must be applied on the same basis to all schools.

210: Local authorities and their schools forums will therefore need, as part of their formula modelling, to determine whether and how to limit gains. This remains a local decision.

211: The department applies caps and scales to academy budgets on the same basis as for maintained schools, although the values may differ from those shown in the APT since the actual baseline position for the academy may not be the same as that shown in the dataset.

212: Capping and scaling factors must not be applied to schools that have opened in the last seven years and have not reached their full number of year groups. This definition of new and growing schools does not include existing schools that are extending to include a new phase and have empty year groups in the new phase.

213: Capping and scaling cannot take a school below the MPPLs.

214: Should local authorities elect to apply a gains cap in 2022 to 2023, the cap must be set at least as high as the MFG threshold. This ensures all schools retain any gains up to the MFG threshold even where a cap is applied.

Redetermination of budget shares

215: It’s not permissible to make an in-year redetermination of schools budget shares other than in the explicit circumstances allowed for within the schools and early years finance (England) regulations 2021 which relate to:

• sixth form funding
• early years funding
• reallocation of funding for excluded pupils
• rates
• risk protection arrangements

216: Therefore, any in-year underspends that are not covered by the clauses above should be carried forward to the next funding year.

217: Any DSG underspend brought forward from the previous year can be used to support the growth or falling rolls fund in the schools block, the central school services block, the high needs block, or the early years block.

218: The local authority will need to consult its schools forum and will have to approve allocations from the underspend to any central budgets, where amounts have to be approved by the forum.

219: Alternatively, local authorities can carry forward an underspend to the next funding period and allocate it to schools via the funding formula. In this situation, the local authority will again need to consult with its schools forum. In-year reallocations to schools cannot be made as these do not comply with the schools and early years finance (England) regulations 2021.

Risk protection

220: From April 2020 local authority-maintained schools have been able to join the risk protection arrangement (RPA), which has previously only been available to academies.

221: Local authorities may de-delegate funding to primary and/or secondary schools for schools entered into the RPA.

222: Local authorities are alternatively able to opt schools into the RPA on a school by school basis, and will need to do this for special schools and pupil referral units (PRUs).

223: The department is operating a process whereby a deduction is made for the appropriate value, from the local authorities' DSG, as membership becomes known through an online form. Further guidance can be found in the Risk protection arrangement (RPA) for schools.

224: If local authorities are signing up any or all their maintained schools for a particular phase to become RPA members from the start of the new financial year 2022 to 2023, they must enrol schools through the link above to ensure the correct schools are assigned the correct RPA scheme rules. Appropriate deductions will then be made to DSG payments to local authorities to reflect the RPA membership.

225: In this situation, local authorities must include a factor that enables them (for their maintained schools) to determine and, if necessary, re-determine the schools budgets to take account of the cost of the RPA.

226: The cost of the risk protection arrangement (RPA) is reviewed annually to ensure breadth of cover and value for money are balanced. The department can confirm that the RPA deduction will be £21 per pupil:

• from 1 April 2022 to 31 March 2023 for local authority maintained schools (LAMS)
• from 1 September 2022 to 31 August 2023 for academies

227: While this year’s price considers recent increases in the cost of meeting claims and the additional introduction of cyber related cover, the RPA continues to provide value for money for schools.

Redetermination of budgets where pupils have been excluded

228: Where pupils are excluded, funding should flow in-year from the school that has excluded the pupil to the provision that takes responsibility for the pupil. If a school subsequently admits a pupil who has been permanently excluded during that financial year, it should then receive additional funding.

229: The provisions here also apply to pupils who leave a mainstream school for reasons other than permanent exclusion and are receiving education funded by the local authority other than at a school.

230: The provisions also act independently of whether a particular pupil has been on the census in the first place, and whether the school has received funding for them.

Deductions from the excluding school's budget

231: The finance regulations apply specifically to mainstream maintained schools.

232: When a pupil is excluded from a mainstream maintained school, the local authority must deduct from the school's budget in-year the amount within the formula relating to the age and personal circumstances of that pupil, pro rata to the number of complete weeks remaining in the financial year from the 'relevant date'. This means the deduction should cover not just the basic entitlement but also the relevant amounts for pupil-led factors, such as free school meals or English as an additional language, where the pupil would attract funding through those criteria.

233: Where the pupil is funded according to the post-16 formula, the amount attributable to the pupil will be the relevant national funding rate. Therefore, this national funding rate per pupil can be deducted from the excluding school’s budget. The finance regulations, however, only apply to mainstream maintained schools. The local authority can have an agreement with another type of 14 to 16 provider to pass funding from an excluded pupil to a new provider.

234: The ‘relevant date’ is the sixth school day following the date of permanent exclusion.

235: The following worked example demonstrates how the deduction from the excluding school's budget should be calculated, where the ‘relevant date’ is 1 October, with 26 weeks remaining in the financial year.

Funding formula factor	Amount
Basic entitlement	£4,000
Free school meals	£500
English as an additional language	£300
Sub-total	£4,800
Pro-rata total for 26 weeks	£2,400
Deduction from excluding school's budget	£2,400

236: The only exception to using the number of weeks remaining in the financial year is where the exclusion takes place after 1 April, in a school year where the pupil would normally have left at the end of that school year. In that case, the calculation is based just on the number of weeks left until the end of the school year.

237: Where the excluded pupil is eligible for the pupil premium, the pupil premium itself cannot be recovered from the school from which a pupil is excluded, but the budget share must be adjusted for the pupil premium on the same basis as the calculations above.

238: The deduction should also include the amount of a financial adjustment order as made under regulation 25(5)(b) of the School Discipline (Pupil Exclusions and Reviews (England) Regulations 2012 where this is relevant.

239: The adjustment for a particular exclusion relates only to the current financial year and cannot be applied to subsequent years. Under regulation 22 of the School and Early Years Finance (England) Regulations 2021, any deductions or increases relating to pupil exclusions are not included in the MFG. A deduction can be made even if it reduces the budget share below the MFG and an increase will be in addition to the MFG.

240: The funding deducted should then be used by the local authority to add funding to the receiving schools budget share (see below) and/or to help with the costs of making alternative provision (AP) for the excluded child. Further information on the funding of AP is contained in the high needs funding operational guide.

Additions to the admitting schools budget

241: Where a mainstream maintained school admits a pupil who has previously been permanently excluded, the local authority must increase the school’s budget in-year.

242: The increase must be at least the amount of the deduction taken off the excluding school, multiplied by the number of complete weeks remaining in the financial year, and divided by the number of complete weeks remaining in the financial year from the 'relevant date'.

243: In the example above, if a school then admitted the pupil from 1 January, this is with 13 weeks of the financial year remaining. As this is half the 26 weeks originally remaining, the admitting school should have its budget increased by at least £1,200.

244: Where the pupil is eligible for the pupil premium, the same principles apply as set out above. The principles also apply where the school’s governing body subsequently reinstates a permanently excluded pupil. The increase can also include an amount up to the amount of the financial adjustment order where this was applied to the excluding school.

Academies

245: Most academies have provisions in their funding agreement that require the same adjustments to their budgets if requested to do so by their local authority. The wording in model funding agreements states:

” If asked to by a local authority, the academy trust must enter into an agreement with that local authority that has the effect that where:

• the academy admits a pupil who has been permanently excluded from a maintained school, the academy itself, or another academy with which the local authority has a similar agreement; or
• the academy trust permanently excludes a pupil from the academy the arrangements for payment will be the same as if the academy were a maintained school, under regulations made under section 47 of the School Standards and Framework Act 1998.”

246: The adjustments should also relate to the local authority financial year. Local authorities can change this to the academy financial year, by local agreement.

247: The schools forum may also agree to make adjustments in line with the school or academy's funding period, with academy adjustments being made on an academic year and maintained schools adjustments being made on a financial year, and these amounts are no greater than those specified in the operational guide, this would constitute a local agreement and would need to be agreed with individual academies.

248: Some of the oldest academies do not have any provisions in their funding agreement. In these situations, any adjustments would have to be by agreement between the local authority and academy.

Inter-authority funding transfers

249: There are regulations covering the movement of excluded pupils across local authority boundaries:

• Education (Amount to Follow Permanently Excluded Pupil) Regulations 1999
• Education (Amount to Follow Permanently Excluded Pupil) (Amendment)(England) Regulations 2001

250: These regulations cover situations where a pupil is excluded from a maintained school in one local authority, and is either:

• subsequently provided with education in the same financial year at a maintained school, or otherwise than at school (for example, in AP) in a second local authority
• subsequently provided with education in the same financial year at a pupil referral unit (AP), or otherwise than at school in a second local authority, and then at a maintained school or otherwise than at school in a third local authority

251: 251. The calculation is on the same basis described in the deductions from the excluding school’s budget section, using the number of weeks remaining in the financial year from the ‘relevant date’, but the payments are between the authorities concerned.

252: There would also be a proportional repayment if the pupil were subsequently reinstated by the governing body. Please see the high needs funding operational guide for further information on the funding of AP for excluded pupils by local authorities.

Growth funding

253: Growth funding is within local authorities’ schools block DSG allocations.

254: For 2022 to 2023, it will be calculated using the same methodology as in 2021 to 2022, based on the growth in pupil numbers between the October 2020 and October 2021 censuses. This is detailed in the schools NFF technical note.

255: To support local authorities to plan ahead of their growth allocation in the DSG settlement, the department has sent information allowing local authorities to input their own forecast of pupil numbers in the October 2021 census and estimate the growth funding they could expect to receive in 2022 to 2023. Growth allocations have been communicated to each local authority within their DSG settlement.

256: Local authorities that received growth funding protection in 2021 to 2022 have continued to receive protection in 2022 to 2023, meaning the maximum reduction in growth funding for these local authorities will be set at -0.5% of their total DSG schools block allocation in 2021 to 2022.

257: As it is within the schools block, a movement of funding from the schools formula into the growth fund would not be treated as a transfer between blocks. The schools forum still needs to be consulted on the total growth fund.

258: The growth fund can only be used to:

• support growth in pre-16 pupil numbers to meet basic need
• support additional classes needed to meet the infant class size regulation
• meet the costs of new schools

259: Local authorities are responsible for funding these growth needs for all schools in their area, for new and existing maintained schools and academies. Local authorities should fund all schools on the same criteria, discussed below. Where growth occurs in academies that are funded on estimates, the department will use the pupil number adjustment process to ensure the academy is only funded for the growth once.

260: The costs of new schools will include the lead-in costs, for example to fund the appointment of staff and the purchase of any goods or services necessary to admit pupils. They will also include post start-up and diseconomy of scale costs. These pre and post start-up costs should be provided for academies where they are created to meet basic need.

261: The department will continue to fund start-up and diseconomy costs for new free schools where they are not being opened to meet the need for a new school as referred to in section 6A of the Education and Inspections Act 2006.

262: The growth fund must not be used to support:

• schools in financial difficulty: any such support for maintained schools should be provided from a de-delegated contingency
• general growth due to popularity; this is managed through lagged funding

263: The growth fund may not be the most appropriate source of funding for growing schools, and the department expects local authorities to use varying pupil numbers where there is a more permanent and significant change to numbers, and where it’s appropriate for the change to be reflected in the funding formula.

264: Local authorities will not need to submit a disapplication request for an increase to numbers where this is due to a change to the admission limit or a local reorganisation. Local authorities are required to produce criteria on which any growth funding is to be allocated, which must be agreed by the schools forum.

265: The schools forum must also be consulted on the total size of the growth fund and criteria for use and should receive regular updates on the use of the funding. Any in-year reduction to the growth fund needs to be agreed with the schools forum or Secretary of State if appropriate.

266: The department will check the criteria for compliance with the School and Early Years Finance (England) Regulations 2021, and future regulations for which compliance applies. The criteria should provide a transparent and consistent basis for the allocation of funding, which may be different for each phase.

267: Criteria for allocating growth funds should contain clear objective trigger points for qualification, and a clear formula for calculating allocations with these criteria applying to all schools on the same basis. Compliant criteria would generally contain some of the features set out below:

• support where a school or academy has agreed with the local authority to provide an extra class to meet basic need in the area (either as a bulge class or as an ongoing commitment)
• additional support where a school has extended its age range (the majority of funding would be paid through the funding formula, where the local authority should seek a variation in pupil numbers)
• support where a school has temporarily increased its pupil admission numbers (PAN), by a minimum number of pupils, in agreement with the local authority
• support for KS1 classes where overall pupil numbers exceed a multiple of 30, by a minimum number of pupils
• pre-opening costs, initial equipping allowance, or diseconomy of scale allowance, for new maintained schools and academies; including new academies where the school is opening in response to basic need

268: Methodologies for distributing funding could include:

• a lump sum payment with clear parameters for calculation (usually based on the estimated cost of making additional provision for a new class, or the estimated start-up costs)
• a per-pupil rate (usually based on age-weighted pupil unit (AWPU), and reflecting the proportion of the year which is not funded within the school’s budget share)
• a per-pupil rate, with a maximum ceiling

269: The department has published further guidance for local authorities setting up funds for growth, including examples of approved growth fund criteria from 2020 to 2021. Where growth funding is payable to academies, the local authority should fund the increase for the period from the additional September intake through until the following August. Local authorities should enter the cost of growth funding for the April to August period, along with appropriate justification, on the recoupment tab of the APT so that the recoupment calculation can be adjusted accordingly.

270: The department will not make growth fund recoupment adjustments for diseconomy of scale, or start-up funding; local authorities should not enter these on the recoupment tab of the APT. This funding will continue to be met from the local authority’s growth fund.

271: Where schools have agreed an expansion in pupil numbers with the local authority, the school should ensure that they understand the methodology for funding the increase and are content that the expansion is deliverable within the funding available.

272: Local authorities should report any unspent growth funding remaining at the yearend to the schools forum. Funding may be carried forward to the following funding period, as with any other centrally retained budget, and local authorities can choose to use it specifically for growth. Any overspent growth funding will form part of the overall DSG surplus or deficit balance.

Falling rolls fund

273: Local authorities may set aside schools block funding to create a small fund to support good schools with falling rolls, where local planning data shows that the surplus places will be needed within the next three financial years.

274: The schools forum should agree both the value of the fund and the criteria for allocation, and the local authority should regularly update the schools forum on the use of the funding. As with the growth fund, the falling rolls fund is also within the NFF schools block. Any in-year reduction to the falling rolls fund needs to be agreed with the schools forum or Secretary of State if appropriate.

275: Criteria for allocating falling rolls funding should contain clear objective trigger points for qualification, and a clear formula for calculating allocations. Differences in allocation methodology are permitted between phases.

276: Compliant criteria would generally contain some of the features set out below:

• support is available only for schools judged good or outstanding at their last Ofsted inspection (this is a mandatory requirement)
• surplus capacity exceeds a minimum number of pupils, or a percentage of the published admission number
• local planning data shows a requirement for a minimum percentage of the surplus places within the next three years
• formula funding available to the school will not support provision of an appropriate curriculum for the existing cohort
• the school will need to make redundancies in order to contain spending within its formula budget

277: Methodologies for distributing funding could include:

• a rate per vacant place, up to a specified maximum number of places (place value likely to be based on basic per pupil funding
• a lump sum payment with clear parameters for calculation (for example, the estimated cost of providing an appropriate curriculum, or estimated salary costs equivalent to the number of staff who would otherwise be made redundant)

278: Where falling rolls funding is payable to academies, the local authority should fund the increase for the period from the additional September intake through until the following August.

279: Local authorities should report any falling rolls funds remaining at the end of the financial year to the schools forum.

280: Funding may be carried forward to the following funding period, as with any other centrally retained budget, and local authorities can choose to use it specifically for falling rolls.

281: The department has published guidance detailing best practice examples of falling rolls (and growth funding) criteria.

Movements between blocks

282: Local authorities’ DSG consists of 4 blocks of funding:

• schools block
• central school services block (CSSB)
• high needs block
• early years block

283: The schools block is ring-fenced in 2022 to 2023, however local authorities can transfer up to 0.5% of their schools block funding into another block, with the approval of their schools forum. In view of the significant increases in funding the DfE has provided, there are a number of important constraints on movements away from the schools block.

284: In 2021 to 2022 the teachers pay, and pensions grant was rolled into the NFF and is therefore included in the 2021 to 2022 baseline and the 2022 to 2023 allocation. Further calculations to ensure this grant was fully realised at a school/academy level, as required last year, are no longer needed. If local authorities wish to transfer any funding out of the schools block in 2022 to 2023, the department expects to see evidence of recent discussion and the schools forum vote. This includes cases where schools forums have already agreed DSG recovery/management plans that assume future year transfers.

285: Local authorities wishing to make a transfer should also consult local maintained schools and academies, and the schools forum should take these views into account before making their decision. It is important that any consultation sets out the full amount of the proposed transfer, not just further proposed transfers in addition to 0.5% or previous years’ transfers. For example, if a local authority wants to move 1%, the consultation documents must clearly state this. A document showing 0.5% on top of the 0.5% the schools forum can approve is not acceptable.

286: Most proposals by local authorities to move funding from their schools block arise because of pressures on their high needs budgets. The department expects local authorities to take the significant increase in high needs funding in 2022 to 2023, on top of increases in the previous two years, into consideration when making decisions on block movements, and for these to have been appropriately discussed at schools forum meetings.

287: All local authorities are expected to keep their local offer of special provision under review, and to have a plan to ensure good quality provision can be developed and sustained in line with available resources.

288: The department therefore expects to see DSG management plans, in light of additional high needs funding, when proposing block movement transfers. If the department has met the local authority and reviewed their DSG management plan during the 2021 to 2022 funding year we would expect to see either an updated plan or narrative setting out any changes to the plan since we last reviewed it. It is important that the local authority provide details of how the transfer from the schools block will decrease the pressure on the high needs block. Local authorities may wish to use the department’s high needs benchmarking tool to compare their patterns of provision and expenditure with similar authorities.

289: It is particularly important that mainstream schools are clear about how they contribute to the local offer, and how that can affect the need for more specialist provision and the costs that local authorities consequently have to meet from their high needs budgets.

290: The department also expects schools forum discussions to include appropriate representation from special schools and other specialist providers. The department has made a DSG management plan template available to assist local authorities in reporting to forums and consulting with schools.

291: Local authorities must submit disapplication requests to the Secretary of State, using the proforma provided by the ESFA, in cases where:

• the local authority wishes to move more than 0.5% of the schools block, regardless of any previously agreed transfer amounts
• the schools forum has turned down a proposal from the local authority to move any amount of funding out of the schools block, but the local authority wishes to proceed with the transfer

292: The deadline for local authorities to submit a block movement disapplication request was 19 November 2021. This deadline enables the department to communicate decisions back in time for local authorities to submit the APT and provide maintained schools with their budget shares.

293: Schools forum meetings should be arranged so that requests for block movements have been considered prior to the disapplication deadline. Incomplete applications may lead to a delay in the block movement consideration which will have an impact on local authorities’ ability to set school budgets on time.

294: The department recognises there may be exceptional situations where local authorities need to amend their request, where circumstances change significantly. For example:

• the demand for high needs provision has changed significantly and unexpectedly
• the final pupil numbers in the October census are significantly different from the expected numbers

295: In these circumstances, local authorities should submit the amended disapplication request by 14 January 2022 at the latest. The department will included more information on the implications for APT submissions in the completing the authority proforma tool guidance which will be published shortly.

296: In such circumstances, local authorities should also have considered how they manage the timetable for setting their school budgets so that the notifications to schools of their budget shares, and the parallel ESFA process for notification of academy allocations, are not delayed. The department suggests timetabling schools forum meetings to discuss budgets in November and December, to agree the process should any amendments to disapplications need to be made. This allows for schools forum to be informed and vote on proposed changes. Further to this, arrangements for political approval should be timetabled to take account of this later date for amended requests.

297: When submitting disapplication requests for transfers from the schools block, local authorities should provide the evidence detailed in the proforma provided by the ESFA. This includes evidence of:

• previous block movements, including those that did not require a disapplication request, and the pressures those movements were designed to address
• DSG management plan. We would expect this to include a forecast position for at least the next three years. It should include details of predicted growth, sufficiency, and the actions the local authority are taking to mitigate the risk of overspending. We would expect to see a plan detailing both the financial and SEND interventions, with detailed narrative explaining how the figures have been derived. If your authority has had a management plan considered by the department within the 2021 to 2022 funding year, we do not expect this plan to be produced again, we would expect to see updates or changes to the plan since we last met
• breakdown of specific budget pressures justifying a transfer, including changes in demand for special provision over the last 3 years, and how the local authority has met that demand by commissioning places in all sectors. This information should be quantified where possible
• assessment of why the high needs costs are exceeding funding levels, and plans to change the pattern of provision where necessary
• assessment of the need to seek schools forum approval for further transfers, and consideration of plans to avoid this if possible
• partnership between the local authority, those institutions offering special and alternative provision (including mainstream schools), and parents; and between the local authority and neighbouring authorities
• any contributions coming from the health and social care budgets towards the cost of specialist places
• consideration of how additional high needs funding would be targeted to good and outstanding mainstream schools that provide an excellent education for a larger than average number of pupils with high needs, or to support the inclusion of children with SEND in mainstream schools
• details of the effect that any transfer would have on individual schools’ budgets funded from the schools block
• information presented to the schools forum, and to all schools through consultation, and details of responses to the transfer proposal

298: The above information should be as presented in published papers considered by the schools forum, alongside the published minutes of relevant schools forum meetings, recording the discussion at the meetings, and details of the vote leading to the forum decision.

299: Each request will be considered on a case-by-case basis; however, the department will look at the following criteria in determining whether the local authority has a strong case:

• strong evidence that, in addition to the significant increases to high needs funding in 2022 to 2023 and any past transfers, a further transfer remains necessary to address significant cost pressures
• specific and detailed plans which demonstrate that the transferred funding would contribute to addressing cost pressures in a sustainable way, such as ‘invest to save’ options
• strong evidence of a marked and recent transfer of financial responsibility for children with high needs from the schools block to the high needs block, for example through a significant increase in permanent exclusions requiring the local authority to make more alternative provision, or a significant increase in the proportion of children with education, health, and care plans placed in specialist settings rather than mainstream schools
• a strong special educational needs and disabilities (SEND) Sufficiency Plan outlining the actions that the local authority will take to ensure a sustainable SEND sector, and how the transfer will impact this work
• good level of support from local schools and the schools forum for a transfer, including a breakdown of local consultations
• mitigated impact on local mainstream schools, and in particular the local authority’s ability to implement the NFF where possible

300: Local authorities are required to comply with the duty under section 149 of the Equality Act 2010 when making decisions about disapplication proposals. Section 149 places a duty on local authorities to have due regard to how their proposal will have the impacts specified in section 149. The department expects local authorities to have considered, consulted, and explained the specific impacts their proposals might have in the disapplication request.

301: If no Equality Impact Assessment has been completed or provided to support the disapplication proforma, the disapplication request will remain on hold until such information has been made available.

Movement from other blocks

302: Movements from the central school services block or high needs block to any other block, are not subject to any limit and can be made in consultation with the schools forum.

303: Movement from the early years block can be made in compliance with the early years pass through rate conditions, and in consultation with the schools forum.

304: Any local authority considering a transfer of funding out of the high needs block should have ensured adequate consultation, both with the relevant representatives on the schools forum (including any relevant sub-groups), and with any providers likely to be affected by the transfer.

DSG deficits and high needs exceptional funding

305: Following the consultation in 2019, the department made changes to the regulations, now incorporated into the school and early years finance (England) regulations 2021 in regulation 8, regulation 31 and schedule 2, to give statutory backing to a new process for handling DSG deficits.

306: A local authority must now:

• carry all of the deficit forward to set against the schools budget in the next financial year; or
• carry part of the deficit forward to set against the schools budget in the next financial year and carry the rest of it forward to the following financial year; or
• not set any of the deficit against the schools budget in the next financial year, but carry all of the deficit forward to the following financial year

307: These provisions will be repeated in future regulations so that part or all of the deficit can be carried forward further a year at a time, to be dealt with through DSG that will be received in future years.

308: If the local authority sets any part of the deficit against the schools budget for the next financial year, it must plan to eliminate that part of the deficit through funding from the DSG that it will receive during that financial year.

309: If the local authority carries any part of the deficit forward to the following financial year, that means it is not planning to eliminate that part of the deficit from DSG received in the next financial year but will need to eliminate it from DSG received in future years.

310: Beginning in 2020 to 2021 financial year, if a local authority with a DSG deficit wishes to use general funds to eliminate any part of the deficit, or otherwise to add general funds to its schools budget, it must apply to the Secretary of State under regulation 31(1)(b) to disregard the requirement to carry deficits forward under regulation 8(7), to the extent of the amount of general funds that it wishes to use.

311:Disapplication requests should be sent to LA.DISAPPLICATIONS@education.gov.uk.

312: The Department for Levelling Up, Housing and Communities (DLUHC) laid the Local Authorities (Capital Finance and Accounting) (England) (Amendment) Regulations 2020 on 6 November 2020, which then came into force on 29 November 2020. The regulations provide that any DSG deficit at the end of 2020 to 2021 must not be charged to a general fund but must be charged to a separate fund established, charged, and used solely for the purpose of recognising deficits in respect of the schools budget. This has the effect of separating any such deficit from a local authority’s general fund. The same arrangements will apply in 2021 to 2022 and 2022 to 2023. You can read the Chartered Institute of Public Finance & Accountancy (CIPFA) guidance on their website.

313: In 2021 to 2022 the overall high needs block of the DSG increased by 10%, and in 2022 to 2023 it will increase further, by 13%. .

314: The government response to the consultation indicated that DfE recognises that there may well be some authorities which, despite their best efforts, will still not be able to pay off their historic deficit from the DSG over the next few years. In these cases, DfE expects to work together with the local authority to agree a plan of action to enable the local authority to pay off its deficit over time. The department will need convincing evidence from the local authority that it would be impracticable to pay off a historic deficit from the DSG it would expect to receive in future years.

315: The agreed action plan would be designed to secure the most efficient use of resources, and depending on the situation and context could include for example:

• changes to local SEND policy or practice
• additional challenge and support to the local authority in its management of high needs and/or management change
• sign off of budget plans by DfE
• additional conditions of grant

316:. It would also cover any movement of DSG from the schools block. As part of an appropriate agreed package of measures, the department will, if necessary, make funds available from within the overall total of DSG so that the local authority can pay off its deficit over time.

317: The department approached selected local authorities to begin discussions with them during 2020 and reached five agreements. The department expects to expand the discussions to other local authorities and will do so further in 2022 to 2023.

318: The government response also acknowledged that local authorities could experience cash flow difficulties in financing in-year spending because of a DSG deficit. By this, the department means that the local authority has actual difficulty in accessing cash, not that it has incurred loss of interest because it has had to make use of the cash. If a local authority is able to prove that it is facing such cash flow problems, specifically because of the DSG deficit, the department will consider providing funding which would then be subtracted from future years’ DSG allocations. Again, this would be subject to appropriate additional conditions of grant to secure the most efficient use of resources. Adjusting the timing of funding in this way would not improve the local authority’s accounting position since it would have to make provision for the future reduction in DSG. If a local authority thinks it may be eligible for this kind of arrangement, it should contact Financial.MANAGEMENT@education.gov.uk.

DSG management plans

319: An increasing number of local authorities have been incurring a deficit on their overall DSG account, largely because of overspends on the high needs block.

320: Starting in 2020 to 2021, DfE extended the rules under the DSG conditions of grant, they now provide, that any local authority with an overall deficit on its DSG account at the end of the 2020 to 2021 financial year, or whose DSG surplus has substantially reduced during the year, must cooperate with the department in handling that situation by:

• providing information as and when requested by the department about its plans for managing its DSG account in the 2021 to 2022 financial year and subsequently
• providing information as and when requested by the department about pressures and potential savings on its high needs budget
• meeting with officials of the department as and when they request to discuss the local authority's plans and financial situation
• keeping the schools forum updated regularly about the local authority's DSG account and plans for handling it, including high needs pressures and potential savings

321: DfE expects a range of evidence to support local authority management plans. The department will continue to review the management plan process and has provided a template DSG deficit management plan for local authorities to use.

322: DSG management plans should be discussed with the schools forum on a regular basis and should set out the local authority’s plans for bringing the DSG spend back into balance.

323: The department expects the DSG management plan to be co-produced. Relevant leads in the finance and special education needs (SEN) areas should sign off each version, (with sign off to be at least at assistant director level).

324: Where a local authority has a substantial in-year overspend or cumulative DSG deficit balance at the end of the financial year, its management plan should look to bring the overall DSG account into balance within a timely period.

325: The department recognises that this may prove difficult for some local authorities, particularly where they are accelerating moving their schools to mirror the NFF allocations in full.

326: Where this is the case, the department would be open to receipt of evidence explaining the pressures and will consider management plans that leave some or all of the deficit accumulated to date outstanding.

327: In all cases, the department expects local authorities’ management plans to focus on how they will bring in-year spending in line with in-year resources.

328: The department expects a range of evidence to support local authority management plans. The department will continue to review the management plan process and has provided a template DSG deficit management plan for local authorities to use. The department expects all evidence to have been presented to schools forums.

329: The department is aware that DSG deficits are usually caused by high needs pressures, and in these cases the evidence required in the management plans will typically include what the department already looks for in block movement disapplication requests.

330: Local authorities will, however, need to address whatever the main causes of overspending on the DSG have been.

331: The evidence should include:

• a full breakdown of specific budget pressures locally that have led to the local authority’s current DSG position. Where this has resulted from high needs pressures, information should include the changes in demand for special provision over the last 3 years, how the local authority has met that demand by commissioning places in different sectors (mainstream and special schools, further education and sixth form colleges, independent specialist provision and alternative provision), and if there have been any reductions in the provision for mainstream school pupils with high needs
• an assessment and understanding of the specific local factors that have caused an increase in high needs costs to a level that has exceeded the local authority’s high needs funding allocations; and a plan to change the pattern of provision where this is necessary, as well as to achieve greater efficiency and better value for money in other ways; together with evidence of the extent to which the plan is supported by schools and other stakeholders
• evidence of how the local authority intends to bring its DSG account back into balance within a timely period, clearly showing clearly how expenditure will be contained within future funding levels. This should also show how the additional funding provided in 2022 to 2023 is intended to be spent to support the local authority to balance its in year spend
• details of any previous movements between blocks and any proposed block movements. A detailed explanation of why these have not been sufficient in the past and why they will be needed going forward to meet the local authority’s high needs pressures is required. Further information is included in the movements between blocks section of this guidance

Central school services block (CSSB)

332: The CSSB continues to provide funding for local authorities to carry out central functions on behalf of maintained schools and academies, comprising 2 distinct elements:

• ongoing responsibilities
• historic commitments

333: Further details on the methodology used for the CSSB are set out in the 2022 to 2023 NFF technical note.

334.: The total funding for ongoing responsibilities is £284m in 2022 to 2023. This funds all local authorities for the functions they have a statutory duty to deliver for all pupils in maintained schools and academies.

335: Local authorities will continue to be protected so that the maximum per-pupil year on-year reduction in funding for ongoing responsibilities is -2.5%, while the year-on-year gains cap will be set at the highest affordable rate of 5.6%.

336: As previously stated, the department has reduced the element of funding within CSSB that some local authorities receive for historic commitments made prior to 2013 to 2014.

337: In 2022 to 2023, for those local authorities that receive it, historic commitments funding has been reduced by 20%.

338: The department has protected any local authority from having a reduction that takes their total historic commitments funding below the total value of their ongoing prudential borrowing and termination of employment costs, in recognition of the lead in times required for such costs to unwind. DfE will consider the evidence local authorities submitted for this same protection last year and invites any other local authority in this position to contact the department at FundingPolicy.QUERIES@education.gov.uk.

339: DfE has made the necessary adjustments for 2022 to 2023 in the DSG allocations. The department is not proposing any changes to the regulations, which require local authorities to have the approval of the schools forum for such expenditures, nor is DfE changing the requirement in regulations that local authorities spend no more on these commitments than they did in the previous year. With the approval of the schools forum, a local authority can maintain spending in this area using other funding sources if they wish to.

340: The duties included in the CSSB are set out in Annex 2, which also includes maintained school only functions.

341: Where local authorities hold duties in relation to all schools (as set out in schedule 2, parts 1 to 5 of the school and early years finance (England) regulations 2021, all schools must be treated on an equivalent basis.

342: Local authorities should not treat voluntary aided schools, foundation schools or academies differently from maintained schools in the services they provide to them. This is set out in the DSG conditions of grant.

343: Schools such as voluntary aided schools, foundation schools and academies cannot therefore be charged for services that are provided free of charge to community and voluntary controlled schools and paid for out of the centrally held DSG.

344: For example, although admissions appeals are not a duty that the local authority holds in relation to all schools, the department would still expect all schools to be treated fairly and equitably by the local authority.

345: This does not include funding that has been retained centrally from maintained school budgets only (as set out in schedule 2, parts 6 and 7), where some statutory duties relate to community and voluntary controlled schools only.

346: However, in these situations, local authorities should not charge voluntary aided and foundation schools if requested to provide services to these schools and where there is no charge to community and voluntary controlled schools for the same service.

Services for maintained schools

347: Local authorities can fund some services relating to maintained schools only from maintained school budget shares, with the agreement of maintained school members of the schools forum.

348: The relevant maintained schools members of the schools forum (primary, secondary, special, and pupil referral units (PRUs)) should agree the amount the local authority will retain.

349: If the local authority and schools forum are unable to reach a consensus on the amount to be retained by the local authority, the matter can be referred to the Secretary of State.

350: Local authorities should set a single rate per 5 to 16-year-old pupil for all mainstream maintained schools, both primary and secondary. In the interests of simplicity, this should be deducted from basic entitlement funding.

351: The department will not allow adjustments to other factors, and the rate will not include early years or post-16 pupils, who are funded through different formulas.

352: Local authorities can choose to establish differential rates for special schools and PRUs if the cost of fulfilling the duty is substantially different for these schools. The rate will be expressed per place rather than per pupil for special schools and PRUs. ^{[footnote 9]}

353: As with de-delegation, the amount to be held by the local authority will be determined after MFG has been applied. If a school converts to academy status, the department will recoup the amount retained for that school from the local authority’s DSG for the remaining months of the financial year that the school is an academy. The academy will be reimbursed in its monthly general annual grant payment from the point of conversion.

354: Unlike for de-delegated services, there will be no phased transfer of funding following conversion so there will be immediate recoupment of this part of the budget. For example, if a school converts on 1 January 2021 (3 months prior to the end of the financial year), the department will recoup three twelfths of the retained amount relating to that school.

355: Local authorities can fund some administrative functions, (as previously funded in the ESG), relating to maintained schools out of the DSG, with the agreement of either the Schools Forum or the Secretary of State. For expenditure to be funded out of the DSG, it has to be defined as part of the Schools Budget. This definition is set out in school and early years finance (England) regulations 2021, regulation 6(1) and includes the whole of schedule 2 to the regulations. From 2018 to 2019, some elements that used to be defined in schedule 1 (non-schools education budget) were transferred to schedule 2.

356: At the same time, local authorities may not wish to fund these administrative functions out of the DSG, but to fund them out of general funds.

357: There are now two routes for local authorities to follow, depending on whether they want to ask the Schools Forum to authorise funding of any part of these functions from the DSG, or whether they want to use general funds.

358: If they want to use the DSG, they apply to the Schools Forum under Regulation 11(6); and if the Schools Forum does not agree they can apply to the Secretary of State.

359: If a local authority wants to use general funds, it will make a deduction under Regulation 8(13) without approaching the schools forum. In that case the expenditure ceases to be part of the Schools Budget, and therefore cannot be funded out of the DSG. Instead, it is treated as part of the non-schools education budget and falls to be funded out of the authority’s general funds.

360: Local authorities should provide sufficient evidence to their schools forum to enable them to make an informed decision on the amount of funding to be held centrally. This could include:

• planned total spending for 2022 to 2023 on each of the headings set out in Annex 3, which also covers all central expenditure
• spending shown to at least the level of detail provided in the 2022 to 2023 section 251 budget statement
• comparable figures for previous years’ spending, split where relevant between those relating to all schools, and those for maintained schools only
• consequences for the funding and delivery of each of the services provided, if the request was not approved
• the impact on individual school budgets, and their overall financial position
• the impact on the local authority if the amount was not held centrally
• detail of the results of the equalities impact assessment carried out to assess the impact of the central retention/education functions of the funding on children or other people who have one or more of the protected characteristics under the Equality Act 2010

De-delegated services

361: De-delegated services are for maintained schools only. Funding for de-delegated services must be allocated through the formula but can be passed back, or de-delegated, for maintained mainstream primary and secondary schools with schools forum approval.

362: De-delegation does not apply to special schools, nursery schools, or pupil referral units (PRUs). Where de-delegation has been agreed for maintained primary and secondary schools, the department’s presumption is that the local authority will offer the service on a buyback basis to those schools and academies in their area which are not covered by the de-delegation.

363: In the case of special schools and PRUs, the funding to buy such services will be included in any top-up payments. Any decisions made to de-delegate in 2021 to 2022 related to that year only, new decisions will be required for any service to be de-delegated in 2022 to 2023.

364: From 2017 to 2018, schools forums have been able to agree to de-delegate further funding for additional school improvement provision for maintained schools.

365: This provision sits alongside the school improvement monitoring and brokering grant for statutory local authority intervention functions. This grant commenced in September 2017.

366: Schools forum members for primary maintained schools and secondary maintained schools must decide separately for each phase whether the service should be provided centrally; the decision will apply to all maintained mainstream schools in that phase.

367: They must decide on fixed contributions for these services so that funding can then be removed from the formula before school budgets are issued.

368: There may be different decisions for each phase. The services which may be de-delegated are:

• additional school improvement services
• contingencies (including schools in financial difficulties and deficits of closing schools)
• behaviour support services
• support to underperforming ethnic groups and bilingual learners
• free school meals eligibility
• insurance
• RPA
• museum and library services
• staff costs supply cover (for example, long-term sickness, maternity, trade union and public duties)
• licences and subscriptions; except for the following, which are paid for by the department:
  • Christian Copyright Licensing International (CCLI)
  • Copyright Licensing Agency (CLA)
  • Education Recording Agency (ERA)
  • Filmbank Distributors Ltd. (for the PVSL)
  • Mechanical Copyright Protection Society (MCPS)
  • Motion Picture Licensing Company (MPLC)
  • Newspaper Licensing Authority (NLA)
  • Performing Rights Society (PRS)
  • Phonographic Performance Limited (PPL)
  • Schools Printed Music Licence (SPML)

369: Local authorities should make a clear statement of how the funding is being taken out of the formula for each de-delegated service. For example:

• primary insurance £20 per pupil
• secondary behaviour support services £30 per FSM pupil

370: There should be a clear statement of how contingencies and other resources will be allocated. Academies will continue to receive a share of funding for these services in their delegated budget.

371: Where de-delegation is agreed, middle schools will potentially be subject to 2 different decisions, and the unit value for de-delegation can be different for primary and secondary age pupils. For example, if the primary sector agreed to de-delegate a service but the secondary sector did not, middle schools in the local authority would have their formula allocation reduced only for their primary pupils at the agreed primary school rate.

372: 2022 to 2023 de-delegation arrangements for schools converting to academy status are as follows:

• conversion date on or before 1 April 2022 – no de-delegation
• conversion date between 2 April 2022 and 1 September 2022 – local authority retains any de-delegated funding until 1 September 2022
• conversion date between 2 September 2022 to 21 March 2023 – local authority retains any de-delegated funding until 31 March 2023

373: After the dates specified, the academy will receive the full formula allocation and the department will recoup this from the local authority.

374: The local authority should continue to provide the services to new academies where funding is de-delegated, if they are asked to do so. If the local authority is unable to provide the requested service, the department expects the local authority and the academy to come to an arrangement to pay the funding directly to the academy.

375: Exceptions to this would be in cases where contractual arrangement to pay services in advance have already been made, and the local authority does not have the ability to continue to provide this service.

376: Where there has been agreement that a school is entitled to receive an allocation from a de-delegated contingency fund, that agreement should be honoured if the school converts to an academy at any point in the year.

377: Where a school converts to an academy in the period 2 April 2022 to 1 September 2022, local authorities will have an opportunity to present an evidence-based case to request a recoupment adjustment for the period 2 September 2022 to 31 March 2023.

378: Local authorities should report any unspent de-delegated funding remaining at year-end to their schools forum.

379: Local authorities can carry funding forward to the following funding period as with any other centrally retained budget and can choose to use it specifically for de-delegated services.

Grants for 2022 to 2023

School improvement monitoring and brokering grant

380: Local authorities currently receive the school improvement monitoring and brokering grant, to support them in delivering their school improvement functions in maintained schools – to monitor the performance of maintained schools, broker school improvement provision, and exercise their statutory intervention powers.

381: Between 29 October and 26 November 2021, we consulted on reforming how this activity is funded, proposing that the grant be phased out and local authorities be enabled to deduct from maintained school budgets to support the costs of this activity instead. We are aiming to publish our government response confirming our approach for financial year 2022 to 2023 in early January 2022

382: Schools forums will continue to be able to agree to de-delegate further funding for additional school improvement provision in 2022 to 2023.

Pupil premium

383: The pupil premium will continue in the 2022 to 2023 financial year.

384: For 2022 to 2023 the October 2021 school census data will be used to allocate the pupil premium, just as the October 2020 census was used for the 2021 to 2022 pupil premium allocations.

Other non-DSG grants

Additional funding for 2022 to 2023

385: Schools will be allocated additional funding in 2022 to 2023, outside of the DSG, to reflect the costs of the health and social care levy, and other cost pressures.

386: The allocations methodology for the additional grant for schools and the allocations of additional high needs funding have been published. The department will confirm school-level allocations for the additional funding in spring 2022.

High needs funding

387: The high needs block supports provision for pupils and students with SEND, from ages 0 to 25, and alternative provision for pupils who, because of exclusion, illness, or other reasons, cannot receive their education in mainstream schools.

388: The department has confirmed the following aspects of the high needs NFF and additional funding:

• the funding floor has been set at 8% so each local authority will receive an increase of at least that percentage, considering changes in their 2 to 18 population (as estimated by the ONS)
• the gains cap has been set at 11%, allowing local authorities to see gains up to that percentage, also based on their 2 to 18 population as above
• however, additional funding is being allocated to all local authorities, following the autumn 2021 spending review, on top of their increases under the NFF

Details of the high needs allocations that form part of the DSG, including the additional allocations of high needs funding, are set out in the DSG publications. More detail on the high needs NFF is set out in the following documents:

• provisional high needs block allocations for 2022 to 2023 and supporting technical note explaining the calculations
• the NFF policy document, which provides more details of the changes

389: The operational aspects of high needs funding and the process for finalising local authority allocations of high needs funding and institutions’ allocations of place funding remain largely unchanged from 2021 to 2022. Details are available in the high needs operational guide.

Early years funding

390: The early years national funding formula operational guide published for 2022 to 2023, is current guidance which local authorities should follow when funding providers to deliver the early years entitlements.

391: The guidance covers funding for:

• the 15 hours entitlement for disadvantaged 2 year olds
• the universal 15 hours entitlement for all 3 and 4 year olds
• the additional 15 hours entitlement for eligible working parents of 3 and 4 year olds
• supplementary funding for maintained nursery schools
• the early years pupil premium
• the disability access fund

Completing the authority proforma tool (APT)

392: Local authorities must report their local funding formula to ESFA on a combined modelling tool and proforma, the APT. The department will calculate academy budgets based on the formula set out in the proforma.

393: While local authorities can use their own spreadsheet modelling for their formula, the department strongly recommends the APT is populated alongside their own models to ensure consistency between them and to avoid unnecessary delay in the submission process.

394: To help local authorities plan and model their funding formula, the department will provide a final APT with information from the October census, which includes the changes announced in the DSG settlement. Local authorities must submit their final APT by 21 January 2022.

395: Where in exceptional circumstances a local authority has made a significant change to a disapplication request for a movement from the schools block, the department recognises that it cannot finalise the APT until a decision on the disapplication has been reached.

396: The department will aim to make final decisions in time to allow the local authorities concerned to submit their final APT by 12 February 2022. Local authorities considering this should ensure that they have procedures in place to meet the requirement to calculate maintained school budgets by 28 February 2022. This includes gaining political approval of budgets.

397: The APT is an integrated tool which contains a range of information, including the underpinning data for school level allocations, details of how split site and PFI allocations have been calculated, and the methods used for de-delegation of services.

398: The APT contains a range of validation checks to identify inconsistencies in the data local authorities have entered, and to highlight where required data and information may be missing.

399: Local authorities should have ensured that all validation checks have passed before submitting the APT. The department will provide detailed guidance on how to use the APT shortly.

400: Local authorities must ensure they have built the relevant political approval into their planning, as the deadlines shown in the timetable below are critical to achieving the advantages of issuing earlier budgets. The department appreciates that formulas often have to be approved by the local authority’s cabinet or lead member, so it is important that the forward plan takes account of this.

401: To speed up the approval process, once the DSG and pupil numbers are known, the department strongly advises that local authorities obtain earlier approval for the principles they will use to balance the budget if pupil numbers turn out differently to the estimates they used. Examples could include scaling back the basic per pupil entitlement across all key stages or carrying forward any marginal shortfall on DSG to the following financial year.

Treatment in the APT of new and growing schools

402: Regulations require local authorities to provide estimated numbers on the APT for new schools and schools that have opened in the last 7 years that do not yet have pupils in every year group. This means it is not necessary for local authorities to apply for a pupil number variation in these situations.

403: As the APT covers the financial year, and year groups join at the start of an academic year, the department would generally expect the estimated numbers to reflect seven twelfths of the financial year.

404: The department needs to understand details of the academic year numbers as well so that relevant academies can be funded on that basis (this also applies to variations in pupil numbers where there are changes in age range).

405: Local authorities should work with the schools concerned to provide the most accurate and realistic estimate based on the latest admissions and demographic data. The regulations are not prescriptive about how future numbers on roll should be calculated however, methodologies could include:

[October 2021 NOR (from APT) x 5/12] + [October 2022 estimated NOR x 7/12]

[October 2021 NOR (from APT)] + [7/12 October 2022 estimated intake in new year group]

406: Where a school is filling many empty places in existing year groups, it may be more appropriate to consider the estimated number on roll of the whole school rather than simply considering the size of the new cohort.

407: The 2022 to 2023 APT will automatically convert the financial year estimated pupil numbers to pupil numbers expected in the academic year, and local authorities should assure themselves that these are correct.

408: For a school to be classed as a growing school, it has to have opened in the last 7 years, and not have all year groups present yet. Academies with predecessor schools are not considered as new schools for this purpose.

409: If a school has opened in the last 7 years and is already taking in pupils in all year groups, there is no requirement to estimate numbers.

410: Existing schools, which are extending their age range or becoming all-through are unlikely to be classed as growing, unless they also opened in the last 7 years.

411: The regulations allow retrospective adjustments in the following financial year so that schools are appropriately funded if actual numbers are different from the estimates. This is a matter for local decision, but the department would generally expect such a mechanism.

412: Local authorities can choose whether to use a threshold. All mainstream free schools are now recoupable from the first year of opening. Local authorities should estimate pupil numbers and characteristics for these schools, as was the case already for those opened under the presumption arrangements.

413: To help local authorities estimate the recoupment amounts for these schools, the department has included a dataset of free schools predicted to open in the next year, with expected pupil numbers, in the final APT sent out in December 2021.

414: DfE has asked local authorities, when submitting the APT, to combine the data provided with their own local knowledge to determine the most accurate estimate of the number of pupils for new free schools. The department will recoup for newly opening free schools based on the information local authorities have provided in their APT.

415: If the actual pupil numbers at newly opening free schools differed from the estimates provided in the 2021 to 2022 APT, local authorities should make a retrospective adjustment on the 2022 to 2023 APT, unless the local authority guaranteed the pupil numbers in the previous year.

416: If local authorities did not show a new free school in the 2021 to 2022 APT and it opens before March 2022, local authorities should show this as a retrospective adjustment in the 2022 to 2023 APT, and the department will recoup accordingly.

417: DfE will check for required amendments by cross-referring to October 2021 school census data when validating the 2022 to 2023 APT. The department will adjust recoupment in 2022 to 2023 for any new free schools where a local authority fails to show, or incorrectly shows, a retrospective adjustment.

418: The ‘New ISB’ worksheet in the APT should reflect funding for the period in the year that the new free schools are open, and DfE will therefore recoup the figure shown on the APT in full. The department will not pro-rate the calculation in respect of these academies.

Funding of academies

419: Most academies are funded on census in the same way that maintained schools are.

420: Academies that meet the definition of a new school will be funded on their estimates, rather than the census, because this is the provision in their funding agreements.

421: There is then a retrospective pupil number adjustment applied by ESFA in the following year.

422: Local authorities can choose how to estimate numbers for the APT, and whether and how to use a retrospective adjustment. It is therefore possible that the numbers the academy is funded on, and the subsequent adjustment, may differ.

423: This is essentially no different to other variations which may occur between the amount recouped and the amount funded because of different baselines being used.

424: However, where the academy is taking on basic need growth, such as through a bulge class, the local authority should allocate funding to the academy in the same way as it would for a maintained school, and according to the same criteria.

425: The department will adjust recoupment in 2022 to 2023 for any academy where a local authority fails to show, or incorrectly shows, basic need growth.

426: Where the local authority has agreed a guaranteed number of pupils to a new academy to ensure viability, this should be indicated in the APT. In this case, the department may use the APT estimate to fund the new academy, instead of the normal estimate process; the local authority should provide commentary on the APT to explain their rationale.

427: The APT guidance has been updated to cover the situation where there is a need to adjust pupil numbers for more than once in the year. If this is the case, the academic year calculation will be incorrect, as the APT cannot handle adjustments for more than once in the year.

428: In these circumstances, local authorities should add an additional spreadsheet to the commentary sheet providing a full breakdown of the calculation.

429: Several older academies will also be funded on estimates because of a clause in their funding agreement. Most of these academies will have all year groups present now (or may always have had them) so there would normally be no need for local authorities to vary pupil numbers on the APT, unless there was a change of age range, major restructuring, or the addition of extra classes to meet basic need.

430: In this case, the local authority should allocate funding to the academy according to its growth criteria in the same way as it would for a maintained school; this could be through amendments to the pupil numbers on the APT, or through specific funding from the growth fund.

431: DfE will ensure through the pupil number adjustments process that the academy is only funded for the growth once. The department will adjust recoupment in 2022 to 2023 for any academy where a local authority fails to show, or incorrectly shows, basic need growth.

432: Where academies are funded based on the census, the department will use any approved variations to pupil numbers submitted by the local authority, as with age range changes for established schools. It is imperative that local authorities make all maintained schools and academies aware of the consequences for their budget of any variations to pupil numbers. Details of the effect on individual schools should be sent out with a clear explanation.

433: Where academies are funded on estimates, and there is a variation to pupil numbers on the APT, local authorities need to be clear in their communications to them that their APT modelling is for their own budgeting purposes only and may not have the same effect on the academies’ budgets.

434: Where a local authority makes additional funding available to schools during the year from central funds outside the formula, for example, to settle equal pay liabilities, it must treat academies in the same way as maintained schools.

Timetable

435: The provisional timetable for the data checking and calculation of the blocks is shown below:

Local authority activity

7 October 2021

• School census day

11 October 2021

Deadline for submitting disapplication requests (for response by December) for:

• MFG exclusions
• exceptional circumstances
• sparsity factors
• lump sum variations for amalgamating schools
• pupil number reductions

Mid-November 2021

• Closing date for submission of the 2022 to 2023 high needs place change workbooks

19 November 2021

Deadline for submitting disapplication requests (for response by the APT deadline) for:

• MFG exclusions
• exceptional circumstances
• sparsity factors
• lump sum variations for amalgamating schools
• pupil number reductions
• deadline for submitting disapplication requests if the local authority wishes to move more than 0.5% of the schools block
• a request must also be submitted if the schools forum has turned down a proposal from the local authority to move funding out of the schools block, but the local authority wishes to proceed with the transfer—the department aims to issue decisions before the APT deadline

November 2021

• school census database closed
• check and validate school census

Mid-January 2022

• schools forum consultation and political approval required for final 2022 to 2023 funding formula
• 14 January schools block disapplication submission amendment date

21 January 2022

• deadline for submission of final 2022 to 2023 APT to ESFA

28 February 2022

• deadline for confirmation of schools budget shares to mainstream maintained schools

DfE or ESFA activity

July to September 2021

• NFF arrangements for 2022 to 2023 for schools, central school services and high needs published (illustrative allocations, PUFs, SUFs, policy document, technical notes)
• operational guidance published setting out arrangements for 5 to 16 mainstream schools implementation for 2022 to 2023
• high needs funding operational guide for 2022 to 2023 published
• further information to illustrate 2022 to 2023 growth funding allocations has been provided to local authorities

October to November 2021

• publish 2022 to 2023 high needs place change notification: technical note.
• check and validate school census
• we have issued an early modelling version of the APT to help decision making

December 2021

• final APT issued to local authorities, containing October 2021 census-based pupil data and factors
• publication of 2022 to 2023 DSG schools block (prior to academies recoupment), central school services block, initial early years block allocations and updated high needs block allocations for 2022 to 2023

By 31 March 2022

• confirmation of 2022 to 2023 general annual grant for academies open by 9 January 2022
• 2022 to 2023 allocation statements issued to post-16 institutions, academies, and non-maintained special schools
• publication of 2022 to 2023 high needs place numbers at institution level

April 2022

• first DSG payments to local authorities based on 2022 to 2023 allocations, including academies recoupment (DSG allocations updated termly for in-year academy conversions), FE high needs place funding deductions, and other adjustments

Summer 2022

• early years block updated for January 2022 early years pupil numbers

Summer 2023

• early years block updated for January 2023 early years pupil numbers (pro rata seven twelfths, as this relates only to the period September 2021 to March 2022)

Additional support

436: The department will continue to offer support to local authorities, where possible, as they continue to implement the funding reforms. The department is interested in seeing local authority proposals as they are developed and is happy to offer advice through the process.

437: In most cases, local authorities should submit any questions about the detail and practical implications of implementation by using the ESFA enquiry form.

438: DfE values the regional meetings of local authority finance officers, which provide the opportunity to discuss practical issues and share best practice. Please make every effort to attend, and the department will ensure that officials continue to attend these meetings.

Annex 1 – Funding for growing schools

Where the growing school is a new school

If the growing school is a new school (so does not have all year groups), and is a nonS6a free school, the local authority should estimate pupil numbers on the APT. ESFA pays free schools using local formula, based on estimated pupil numbers. ESFA will also pay any agreed start up and diseconomy costs until the free school is deemed viable.

If the growing school is a new school (so does not have all year groups), and is a not a non-S6a free school, the local authority should estimate pupil numbers on the APT. Estimates should take account of actual intake in the previous funding period. The local authority may provide additional support from the growth fund.

Where the growing school is not a new school

If the growing school is not a new school but the age range is changing, the local authority should estimate pupil numbers on the APT. ESFA recoups formula funding for academies from the local authority and pays academies direct. The local authority may provide additional support from the growth fund.

If the growing school is not a new school and the age range is not changing but the increase is required to meet basic need, the local authority funds from the growth fund (if in place) for September to August. ESFA adjusts recoupment for academies for April to August to avoid double-counting.

If the growing school is not a new school, the age range is not changing and increase is not required to meet basic need, then:

• local authority maintained schools are paid by the local authority for formula funding based on lagged pupil numbers. Exceptional funding may be available if the schools forum has agreed a de-delegated contingency.
• non-local authority maintained schools are paid by ESFA for formula funding based on lagged pupil numbers. Exceptional funding may be available in certain circumstances.

Where the school is not a growing school

If the school is local authority maintained and not a growing school then ESFA pays formula funding based on lagged pupil numbers. Exceptional funding may be available in certain circumstances.

If the school is not local authority maintained, and not a growing school, then the local authority pays formula funding based on lagged pupil numbers. Exceptional funding may be available if the schools forum has agreed a de-delegated contingency.

Annex 2 – central services that may be funded with agreement of schools forums

The split of services between responsibilities that local authorities hold for all schools, and those that relate to maintained schools only are shown below.

Responsibilities held by local authorities for all schools are funded from the central school services block, with the agreement of schools forums.

Responsibilities held by local authorities for maintained schools only are funded from maintained schools budgets only, with agreement of the maintained schools members of schools forums.

The department has included references to the relevant schedules in the School and Early Years Finance (England) Regulations 2021.

Responsibilities held for all schools

Statutory and regulatory duties

• Director of children's services and personal staff for director (Sch 2, 15a)
• Planning for the education service as a whole (Sch 2, 15b)
• Revenue budget preparation, preparation of information on income and expenditure relating to education, and external audit relating to education (Sch 2, 22)
• Authorisation and monitoring of expenditure not met from schools' budget shares (Sch 2, 15c)
• Formulation and review of local authority schools funding formula (Sch 2, 15d)
• Internal audit and other tasks related to the local authority's chief finance officer's responsibilities under Section 151 of LGA 1972 except duties specifically related to maintained schools (Sch 2, 15e)
• Consultation costs relating to non-staffing issues (Sch 2, 19)
• Plans involving collaboration with other local authority services or public or voluntary bodies (Sch 2, 15f)
• Standing Advisory Committees for Religious Education (SACREs) (Sch 2, 17)
• Provision of information to or at the request of the Crown other than relating specifically to maintained schools (Sch 2, 21)

Education welfare

• Functions in relation to the exclusion of pupils from schools, excluding any provision of education to excluded pupils (Sch 2, 20)
• School attendance (Sch 2, 16)
• Responsibilities regarding the employment of children (Sch 2, 18)

Asset management

Management of the LA's capital programme including preparation and review of an asset management plan, and negotiation and management of private finance transactions (Sch 2, 14a)

• General landlord duties for all buildings owned by the local authority, including those leased to academies (Sch 2, 14b)

Other ongoing duties

• Licences negotiated centrally by the Secretary of State for all publicly funded schools (Sch 2, 8); this does not require schools forum approval
• Admissions (Sch 2, 9)
• Places in independent schools for non-SEN pupils (Sch 2, 10)
• Remission of boarding fees at maintained schools and academies (Sch 2, 11)
• Servicing of schools forums (Sch 2, 12)
• Back-pay for equal pay claims (Sch 2, 13)
• Writing to parents of year 9 pupils about schools with an atypical age of admission, such as UTCs and studio schools, within a reasonable travelling distance (Sch 2, 23)

Historic commitments

• Capital expenditure funded from revenue (Sch 2, 1)
• Prudential borrowing costs (Sch 2, 2(a))
• Termination of employment costs (Sch 2, 2(b))
• Contribution to combined budgets (Sch 2, 2(c))

Responsibilities held for maintained schools only

Statutory and regulatory duties

• Functions of local authority related to best value and provision of advice to governing bodies in procuring goods and services (Sch 2, 59)
• Budgeting and accounting functions relating to maintained schools (Sch 2, 75)
• Authorisation and monitoring of expenditure in respect of schools which do not have delegated budgets, and related financial administration (Sch 2, 60) Monitoring of compliance with requirements in relation to the scheme for financing schools and the provision of community facilities by governing bodies (Sch 2, 61)
• Internal audit and other tasks related to the local authority's chief finance officer's responsibilities under Section 151 of LGA 1972 for maintained schools (Sch 2, 62)
• Functions made under Section 44 of the 2002 Act (Consistent Financial Reporting) (Sch 2, 63)
• Investigations of employees or potential employees, with or without remuneration to work at or for schools under the direct management of the headteacher or governing body (Sch 2, 64)
• Functions related to local government pensions and administration of teachers' pensions in relation to staff working at maintained schools under the direct management of the headteacher or governing body (Sch 2, 65)
• Retrospective membership of pension schemes where it would not be appropriate to expect a school to meet the cost (Sch 2, 78)
• HR duties, including advice to schools on the management of staff, pay alterations, conditions of service and composition or organisation of staff (Sch 2, 67), determination of conditions of service for non-teaching staff
• (Sch 2, 67); appointment or dismissal of employee functions (Sch 2, 67)
• Consultation costs relating to staffing (Sch 2, 69)
• Compliance with duties under Health and Safety at Work Act (Sch 2, 70)
• Provision of information to or at the request of the Crown relating to schools (Sch 2, 71)
• School companies (Sch 2, 72)
• Functions under the Equality Act 2010 (Sch 2, 73)
• Establish and maintaining computer systems, including data storage (Sch 2, 74)
• Appointment of governors and payment of governor expenses (Sch 2, 75)

Education welfare

• Inspection of attendance registers (Sch 2, 81)

Asset management

• General landlord duties for all maintained schools (Sch 2, 79a & b (section 542(2)) Education Act 1996; School Premises Regulations 2012) to ensure that school buildings have:
• appropriate facilities for pupils and staff (including medical and accommodation)
• the ability to sustain appropriate loads
• reasonable weather resistance
• safe escape routes
• appropriate acoustic levels
• lighting, heating and ventilation which meets the required standards
• adequate water supplies and drainage
• playing fields of the appropriate standards
• General health and safety duty as an employer for employees and others who may be affected (Health and Safety at Work etc. Act 1974)
• Management of the risk from asbestos in community school buildings
• (Control of Asbestos Regulations 2012)

Central support services

• Clothing grants (Sch 2, 55)
• Provision of tuition in music, or on other music-related activities (Sch 2, 56)
• Visual, creative and performing arts (Sch 2, 57)
• Outdoor education centres (but not centres mainly for the provision of organised games, swimming or athletics) (Sch 2, 58)

Premature retirement and redundancy

• Dismissal or premature retirement when costs cannot be charged to maintained schools (Sch 2, 78)

Monitoring national curriculum assessment

• Monitoring of National Curriculum assessments (Sch 2, 77)

Therapies

• This is now covered in the high needs section of the regulations and does not require schools forum approval

Additional note on central services

Services set out above will also include administrative costs and overheads relating to these services (regulation 1(4)) for:

• expenditure related to functions imposed by or under chapter 4 of part 2 of the 1998 Act (financing of maintained schools), the administration of grants to the local authority (including preparation of applications) and, where it's the local authority's duty to do so, ensuring payments are made in respect of taxation, national insurance and superannuation contributions
• expenditure on 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
• expenditure in relation to the investigation and resolution of complaints
• expenditure on legal services

Annex 3 – schools forum approvals for centrally held funding

A number of the services that are covered by funding that is held centrally are subject to a limitation of no new commitments or increases in expenditure from 2021 to 2022.

This limit does not apply to admissions or the servicing of schools forums.

Schools forum approval is required each year to confirm the amounts on each line.

When using centrally held funding, local authorities must treat maintained schools and academies on an equivalent basis.

The following sections set out the level of approval required for each centrally retained service.

Schools forum approval is not required (although they should be consulted)

• high needs block provision
• central licences negotiated by the Secretary of State
• funding of brought forward deficits

Schools forum approval is required on a line-by-line basis

• funding to enable all schools to meet the infant class size requirement
• back pay for equal pay claims
• remission of boarding fees at maintained schools and academies
• places in independent schools for non-SEN pupils
• admissions
• servicing of schools forum
• contribution to responsibilities that local authorities hold for all schools
• contribution to responsibilities that local authorities hold for maintained schools

(voted on by relevant maintained school members of the forum only)

• de-delegated services from the schools block (voted on by the relevant maintained school members of the forum only)

Schools forum approval is required

• central early years block provision
• any movement of funding out of the schools block

Schools forum approval is required on a line-by-line basis – the budget cannot exceed the value agreed in the previous funding period, and no new commitments can be entered into

• capital expenditure funded from revenue
• projects must have been planned and decided on prior to April 2013; no new projects can be charged
• details of the remaining costs should be presented
• contribution to combined budgets
• where the schools forum agreed prior to April 2013 a contribution from the schools budget to services which would otherwise be funded from other sources
• existing termination of employment costs
• costs for specific individuals must have been approved prior to April 2013; no new redundancy costs can be charged
• prudential borrowing costs
• the commitment must have been approved prior to April 2013
• details of the remaining costs should be presented
• SEN transport where the schools forum agreed prior to April 2013 a contribution from the schools budget (this is now treated as part of the high needs block but still requires schools forum approval as a historic commitment)

Schools forum approval is required on a line-by-line basis, including approval of the criteria for allocating funds to schools

• funding for significant pre-16 pupil growth, including new schools set up to meet basic need, whether maintained or academy
• funding for good or outstanding schools with falling rolls where growth in pupil numbers is expected within 3 years

1. These weightings have been rounded. ↩

2. This figure has been rounded. ↩

3. Including pupils from Reception to Year 11, excluding nursery and sixth form pupils. ↩

4. Using the following calculation, illustrated in examples 1 and 2: (1 – ((school’s average year size – half of maximum average year size threshold) / half of maximum average year size threshold)) x maximum lump sum ↩

5. Calculated using the following formula, illustrated in paragraph 105: ((average year group threshold – school’s average year size) / average year group threshold) x maximum lump sum. ↩ ↩² ↩³

6. In the APT these are referred to as ‘NFF’, ‘Tapered’ or ‘Fixed’ on the Proforma sheet ↩

7. Calculated using the following formula, illustrated in examples 3 and 4: (1 – ((main distance threshold – school’s sparsity distance) / main distance threshold – tapered distance threshold))) x amount school would have received had their distance been above the main threshold (calculated according to footnote 5). ↩

8. Assuming the local authority sets an MFG of +0.5%. ↩ ↩² ↩³

9. The multipliers used in ESG previously were 3.75 for PRUs, and 4.25 for special schools. ↩