Issue details

Proposed Decision:

To approve changes to the Kent County Council local funding formula for schools and early years providers that is used to calculate school budgets and early years rates from 1 April 2025. 

To approve the percentage uplift to Special Educational Need payments made by the Local Authority to State-Funded Schools and Post 16 providers (FE Colleges & Specialist Post 16 Providers) from 1 April 2025.

Delegate authority to the Corporate Director of Children, Young People and Education to make any necessary changes to the Local Funding Formula rates once final affordability is known.

Delegate authority to the Corporate Director of Children, Young People and Education, in consultation with the Cabinet Member for Education and Skills, to agree the distribution method for new school specific education grants during 2025-26 provided by the Department of Education, in line with grant conditions.  

Reason for the decision:

• In response to the Government confirming the additional funding for schools, Kent County Council is set to receive approximately £35m (2.6%) in 2025-26 to increases funding rates for primary and secondary school budgets. The Government has also indicated a further £21.5m (7%) for High Needs in 2025-26. Funding for the Early Years Free Entitlement has also been announced with funding from Government due to increase between 2.7% and 4.3% (dependent on age range). This decision will confirm how this additional funding will be distributed to schools and early years in line with Government guidelines. In addition, during the year, the Department of Education can sometimes announce additional grants that must be paid directly to schools (for example: contributions towards teachers’ pay award, pension increases or national insurance changes) to ensure these grants are paid to schools in a timely manner, the proposal extends the delegation to distribute these specific grants during the year.
• The final budget approach will be confirmed at the point the decision is taken.

Background:

• The Government has confirmed the Council continues to be responsible for operating a local funding formula for Kent maintained schools (and this formula is also used by the Education and Skills Funding Agency for calculating Kent academy budgets) during 2025-26 and legislation dictates that any changes to that formula is subject to an all school consultation which took place in December 2024 along with seeking views from the Schools Funding Forum. The consultation focuses on how we allocate any additional funding and a request to continue to transfer 1.2% from the schools to the high needs block to support SEN Support services in schools (the latter is also subject to Secretary of State approval).

·      The Council is responsible for setting the funding formula rates for High Needs funded school places including mainstream top-up funding, specialist resource provisions, maintained and academy special schools, post 16 providers. Proposals for the future SEN funding model for state-funded schools is being considered separately. These proposals are limited to the recommended percentage uplift to be applied to existing formulas for 2025-26.

·       The Council is also responsible for setting the Early Years Local Funding Formula which is used for setting the rates paid to early years providers for the Free Entitlement offer for children aged between 9 months and 4 years attending nurseries or childminders, for up to 30 hours of free childcare a week (dependent on eligibility).

Options (other options considered but discarded):

School Budgets: The options considered for setting the primary and secondary school budgets are outlined in the consultation document to schools and the preferred option will be set out at the point of decision. However, the option to deviate excessively from the National Funding Formula (NFF) used by Government to allocate school funding to local authorities for distribution to primary and secondary schools was discarded at an earlier stage.This is in line with previous recommendations from both schools & the Schools Funding Forum who have supported the general principle that “our Local Funding Formula should move towards the NFF, but at the same time continue to utilise local flexibility to address areas of local concern”.

• SEN Payments for state-funded schools and post 16 providers (Colleges & Specialist Post 16 Providers): Wider proposals for changes to the Special Education Needs Funding Model for state-funded schools were discarded at an early stage as proposed changes are being considered separately to this decision.  Therefore this decision is being limited to whether to apply a percentage uplift to SEN payments for state-funded schools and post 16 providers (Colleges & Specialist Post 16 Providers) in 2025-26.

• Early Years Payments: The option to change the basis of the  funding rates were discarded at an early stage with the decision being limited to whether to apply a percentage uplift to current rates.

Last year the Government announced a range of measures to support early education and help for parents with childcare so they can return to work more easily. This resulted in a number of changes to the sector including an expansion of the free entitlement offer from a universal/targeted offer for 3 & 4 year olds (& some eligible 2 year olds) to include free childcare up to 30 hours to working parents with children aged over 9 months. The Council implemented a number of new rates in response to this change and reviewed the current 3 & 4 year old formula relating to deprivation. Therefore, options to change the basis of the funding rates further were discarded, to provide stability to the sector, instead opting to consider a standard percentage uplift in line with Government funding announcements. 

Links to Framing Kents Future and Securing Kent’s Future:

·      The decision is linked to the key priority “Levelling up Kent” within the ‘Framing Kent’s Future (2022-26)’

·      Whilst the decision relates to the distribution of ring-fenced grant, this decision is linked to achieving the overall objectives of ‘Securing Kent’s Future – Budget Recovery Strategy’ whereby proposals will support the financial recovery of the High Needs Block of the Dedicated Schools Grant.