The Forum considered a report of the Directorate Finance Lead – Children and Schools which discussed the intention to change the way the budget allocation for a school (be that maintained, Academy or Free School) that has permanently excluded a pupil is redetermined in accordance with the Schools Finance (England) Regulations 2018 (‘The Regulations’).  The proposal to change the mechanism would bring the Authority in line with Department for Education’s (DfE) operational guidance, a copy of which was appended to the report.

The changes centred on an intention that, from 2019/20, the calculation for re-determining the excluding school’s budget allocation for that particular pupil will be based on the funding that a pupil of the same age and personal circumstances would have received through the Council’s Local Funding Formula and Pupil Premium for the applicable financial year. The calculation for re-determining the budget allocation would be based on the individual school’s per pupil unit value as opposed to the basic entitlement and the number of weeks left in the financial year.  The report also stated that the Regulations clearly stipulated that these arrangements were applicable to Academies and it was asserted that the basis on which the Education Skills and Funding Agency (ESFA) funds an individual Academy would not be taken into account when determining exclusion charges. It went on to say that if an Academy did not restore funding through the exclusion charge, all Dedicated Schools Grant funding to support the education of the excluded pupil in the following financial year would be lost.

The Forum was asked to note that the changes would lead to increased exclusion charges of an average of £4,110 for primary sector pupils and £5736 for secondary sector pupils.  The amount that the pupil would have attracted as a result of Pupil Premium would also be deducted, if indicated.  Charges would be calculated on a pro rata basis from the point in the academic year that they were permanently excluded.  

There was a discussion about the exclusion of pupils from out of area schools and the extent to which other school’s followed the same guidance. The Directorate Finance Lead - Children and Schools confirmed that currently deductions were calculated on the basic amount per pupil but, in future, greater clarity would be sought around pupil characteristics.  She also said that a benchmarking exercise had revealed that the majority of other North West Education Authorities were deducting more than the basic amount per pupil although it was as yet unclear whether this applied to Manchester pupils who had been given an Out of Area placements.

There was also a discussion around deductions for pupils that had been excluded from an Academy and whether appropriate levels of funding were successfully being deducted. The Directorate Finance Lead - Children and Schools said that, for some earlier established Academies, funding withdrawals pertaining to exclusions sat outside of their funding agreements with the ESFA.  However, changes were subsequently made to those funding agreements to enable deductions to be facilitated.  She also said that she understood that most, if not all, of Manchester’s academies particularly those in the secondary sector were paying their exclusion charges.

The Forum held mixed views on the new methodology, some members felt it felt unfair to deduct funding irrespective of whether the pupil had not been included in the school’s census figures, although it was subsequently acknowledged that whilst it was a now a higher average figure in principle it remained broadly in line with existing practices.  A member highlighted that the cost to school that had permanently excluded a pupil was high since it was also subject to an additional one-off charge (‘the exclusion levy’) by the PRU.  This meant that the financial penalty of an exclusion was far greater than the amount of funding that had been allocated for the pupil.  However, other members gave their support for the revised practice, acknowledging that the Authority was simply aligning itself with DfE guidance.

Discussions then moved to what happens to the funding once it had been withdrawn.  The Directorate Finance Lead - Children and Schools explained that, in Manchester where a child is permanently excluded, they are almost without exception moved to either a primary or secondary Pupil Referral Unit. (PRU).  The deduction is then allocated to the HNB where the majority of the allocated fund is then directed to the PRU to support funding for the needs of that child. However, where a pupil is excluded and moves on to another Academy or maintained school, the Regulations stipulate that the money must follow the child.  She added that, where a pupil is excluded from a special school and the child moves to another special school, no charge is made.  She explained that this was due to funding adjustments being made on a termly basis with regard to pupil numbers in that particular sector, meaning that the process that is in place for special schools sat outside of the arrangements under discussion today.

The Chair then spoke about the prevalence of home education being used as an alternative to permanent exclusion, which he asserted frequently left parents poorly placed to undertake such a significant responsibility for anything more than a short term measure and ultimately leaving the child to seek a new school place. This, he said, placed the responsibility to permanently exclude with another school, as well as placing the associated financial penalty on another school and left some pupils unaccounted for in the education system.

Decisions

1.            To note the intention to reduce an excluding school’s budget share by the amount of funding that that is attributable to a pupil with a similar characteristic to the excluded pupil. 

2.            To also note that schools will be notified of this planned change and will be asked for comments that will be reported to a future meeting of the Schools Forum.