The School and Early Years Finance (England) Regulations 2013

PART 1 Introduction

Citation, commencement, application and interpretation

1.—(1) These Regulations may be cited as the School and Early Years Finance (England) Regulations 2013 and come into force on 1st January 2014.

(2) These Regulations apply in relation to the financial year beginning on 1st April 2014.

(3) These Regulations apply only in relation to England.

(4) In these Regulations—

“the 1996 Act” means the Education Act 1996(1);

“the 1998 Act” means the School Standards and Framework Act 1998;

“the 2002 Act” means the Education Act 2002;

“the 2005 Act” means the Education Act 2005(2);

“the 2006 Act” means the Education and Inspections Act 2006(3);

“the 2009 Act” means the Apprenticeships, Skills, Children and Learning Act 2009(4);

“the 2012 Regulations” means the School and Early Years Finance (England) Regulations 2012(5);

“the 2008 Document” means the document entitled “Statutory Framework for the Early Years Foundation Stage” published by the Secretary of State on 19th May 2008(6);

“the 2012 Document” means the document entitled “Statutory Framework for the Early Years Foundation Stage” published by the Secretary of State on 27th March 2012(7);

“the 2013 Document” means the document entitled “2013 Key Stage 2 Assessment and Reporting Arrangements”(8) containing provisions made pursuant to Article 11 of the Education (National Curriculum) (Key Stage 2 Assessment Arrangements) (England) Order 2003(9), made under section 87(3) of the Education Act 2002;

“academic year” means any period commencing with 1st August and ending with the next 31st July;

“all-through schools” means those primary or secondary schools known by this title where pupils may join the school at an age of between three and five years and remain at the school until the age of between 16 and 19 years;

“capital expenditure” means expenditure of a local authority which falls to be capitalised in accordance with proper accounting practices, or expenditure treated as capital expenditure by virtue of any regulations or directions made under section 16 of the Local Government Act 2003(10);

“central expenditure” means, in respect of the funding period, the total amount deducted by a local authority from their schools budget in accordance with regulation 8, or in respect of the previous funding period, the total amount deducted by a local authority from their schools budget in accordance with regulation 8 of the 2012 Regulations;

“CERA” means capital expenditure which a local authority expect to charge to a revenue account of the authority within the meaning of section 22 of the Local Government Act 2003;

“community early years provision” means prescribed early years provision provided by the governing body of a maintained school under section 27(1) of the 2002 Act to children other than pupils at the school, where the local authority have chosen to fund such provision;

“the Early Years Foundation Stage Profile” has the meaning given in section 2 of the 2008 Document or the 2012 Document, as the context specifies more particularly;

“early years provision” has the meaning given in section 20 of the Childcare Act 2006(11);

“eligibility for free school meals” means eligibility for free lunches under section 512ZB of the 1996 Act(12);

“exempt early years provider” means a provider of exempt early years provision;

“exempt early years provision” means early years provision which is not included in prescribed early years provision for the purposes of section 7(1) of the 2006 Act by virtue of regulation 2(2) of the Local Authority (Duty to Secure Early Years Provision Free of Charge) Regulations 2012(13);

“expenditure on the schools specific contingency” is central expenditure deducted for the purpose of ensuring that monies are available to enable an increase in a school’s budget share after it has been allocated and where it subsequently becomes apparent that a governing body have incurred expenditure which it would be unreasonable to expect them to meet from the school’s budget share which may include expenditure in relation to—

(i)

schools in financial difficulty,

(ii)

the writing-off of deficits of schools which are discontinued, excluding any associated costs and overheads,

(iii)

new, amalgamating or closing schools, or

(iv)

other expenditure where the circumstances were unforeseen when initially determining the school’s budget share;

“funding period” means the financial year beginning on 1st April 2014;

“home school” means, in respect of a pupil, a school which is the shortest distance in a straight line from the pupil’s home and which admits pupils of the pupil’s age and sex, other than—

(i)

a selective school,

(ii)

a special school, or

(iii)

an independent school which is not an Academy;

“hospital education” means education provided at a community special school or foundation special school established in a hospital, or under any arrangements made by the local authority under section 19 of the 1996 Act (exceptional provision of education), where the child is being provided with such education by reason of a decision made by a medical practitioner and “hospital education places” shall be read accordingly;

“IDACI” means the Income Deprivation Affecting Children Index referred to in the document named “English Indices of Deprivation 2010” published by the Department for Communities and Local Government(14);

“IDACI bands” means the groupings of IDACI scores as published by the Department for Education in the document named “Schools Block Dataset Technical Specification: 2014 to 2015”(15);

“IDACI score” means the score allocated to a child under IDACI;

“key stage” means the key stage of the National Curriculum for England comprising the requirements and entitlements described in sections 84, 85 and 85A of the 2002 Act(16) and “key stage 1”, “key stage 2”, “key stage 3” and “key stage 4” mean the first, second, third and fourth key stages referred to in those sections respectively;

“learning difficulty” means difficulty in learning that a person has that is significantly greater than the majority of persons of his or her age, or a disability which either prevents or hinders the person from making use of facilities of a kind generally provided for further education to persons of his or her age;

“learning difficulty assessment” has the meaning given in section 13(5) of the 1996 Act(17), and a reference to a person being subject to learning difficulty assessment has the meaning given in section 13(4) of the 1996 Act(18);

“looked after child” means a person who, for the purposes of the Children Act 1989, is a child looked after by a local authority, and references to the authority looking after the child are to be read accordingly;

“middle school single sum formula” is where—

(i)

A is the amount allocated per school by the authority under paragraph 1(a) of Schedule 3 (primary single sum),

(ii)

B is the number of primary-age year groups in the school,

(iii)

C is the number of year groups in the school,

(iv)

D is the amount allocated per school by the authority under paragraph 2(a) of Schedule 3 (secondary single sum),

(v)

E is the number of secondary-age year groups in the school;

“non-domestic rate” has the meaning given in section 54 of the Local Government Finance Act 1988(19);

“prescribed early years provision” means early years provision prescribed for the purposes of section 7(1) of the Childcare Act 2006;

“previous funding period” means the financial year beginning on 1st April 2013 and “previous funding periods” means such financial years as the context specifies more particularly;

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

“provider”, in relation to prescribed early years provision, includes a governing body of a maintained school or a relevant early years provider;

“prudential borrowing” means borrowing money for the purpose of facilitating the modernisation and rationalisation of the school estate, where the revenue savings expected to be achieved as a result are equal to or more than the expenditure expected to be incurred in borrowing the money;

“pupil premium” means the amount allocated by a local authority from the pupil premium grant to a school under the terms and conditions of the grant;

“pupil premium grant” is a grant of that name paid to a local authority by the Secretary of State under section 14 of the 2002 Act in respect of pupils who are entitled to a pupil premium;

“relevant early learning goals” means the early learning goals in the prime areas in section 1 of the 2012 Document and also the early learning goals of reading, writing, numbers and shape, space and measures in section 1 of that document;

“relevant early years provider” means a provider of prescribed early years provision, other than the governing body of a maintained school;

“relevant early years provision” means prescribed early years provision provided by a relevant early years provider;

“school census” means the record of individual pupil information supplied by local authorities to the Secretary of State under section 537A of the 1996 Act(21);

“second closest school” means, in respect of a pupil, a school which is the second shortest distance in a straight line from the pupil’s home and which admits pupils of the pupil’s age and sex, other than—

(i)

a selective school,

(ii)

a special school, or

(iii)

an independent school which is not an Academy;

“sixth form grant” means a grant of that name paid to a local authority by the Secretary of State under section 14 of the 2002 Act in respect of sixth form pupils, on condition that it is passed on to a particular school;

“special Academy” means an Academy which meets the requirements of section 1A(2) of the Academies Act 2010(22);

“specific grant” means any grant paid to a local authority under conditions which impose restrictions on the particular purposes for which the grant may be used other than—

(i)

a grant named “Dedicated Schools Grant”, paid to a local authority by the Secretary of State under section 14 of the 2002 Act, or

(ii)

any sixth form grant;

“teaching assessment of English writing” means the assessment referred to as such in the 2013 Document;

“unavoidable costs” means costs which must be incurred by virtue of a statutory requirement;

“selective school” means a school where all the pupils in the school are selected by ability or by aptitude;

“Year 1” means the school year in which the majority of pupils attain the age of six;

“Year 2” means the school year in which the majority of pupils attain the age of seven;

“Year 3” means the school year in which the majority of pupils attain the age of eight;

“Year 4” means the school year in which the majority of pupils attain the age of nine;

“Year 5” means the school year in which the majority of pupils attain the age of ten;

(5) In these Regulations—

(a) a reference to a determination or redetermination of a budget share or amount to be allocated is a reference to such a determination or redetermination for the funding period, unless otherwise stated;

(b) a reference to an Academy school’s “predecessor school” is a reference to—

(i) the school that was discontinued and which that Academy school replaced, or

(ii) the maintained school which converted into that Academy school in accordance with section 4 of the 2010 Act;

(c) a reference to a “governing body” of a school includes the management committee of a pupil referral unit;

(d) a reference to an inspection under section 5 of the 2005 Act includes a reference to an inspection under section 8 of that Act (other inspections) which has been treated by the Chief Inspector as an inspection under section 5;

(e) a reference to the number of pupils at a particular key stage is a reference to the number on 3rd October 2013, unless otherwise stated;

(f) a reference to “pupils or children” in regulations 15 and 16 is a reference to—

(i) in respect of a nursery school, the pupils at the school,

(ii) in respect of a nursery class, the pupils in the class,

(iii) in respect of a prescribed early years provider, the children receiving prescribed early years provision from the provider,

(iv) in respect of a relevant early years provider, the children receiving relevant early years provision from the provider,

(v) in respect of an exempt early years provider, the children receiving exempt early years provision from the provider, and

(vi) in respect of community early years provision, the children receiving such provision at the school;

(g) a reference to “pupils” includes only those pupils who are recorded on the school census as either—

(i) registered solely at that school, or

(ii) registered at more than one school, but attending that school for the majority of their time,

except in regulations 15(5), 15(6) and 16 where “pupil” means a registered pupil(23);

(h) a reference to “schools” in Schedules 1 and 2 includes maintained schools and Academies except where the context requires otherwise;

(i) a reference to “special educational needs transport costs”, for the purposes of paragraph 4(d) of Schedule 2, is a reference to the costs of home to school transport for pupils with special educational needs in schools maintained by a local authority where the authority are meeting such costs because the revenue savings that will be achieved by placing such children in a school maintained by them are equal to, or greater than, the costs of such transport; and

(j) a reference to “termination of employment costs”, for the purposes of paragraph 4(b) of Schedule 2, is a reference to expenditure relating to the dismissal or premature retirement of, or for the purpose of securing the resignation of, any person employed in a maintained school.

Revocation

2.  The School Finance (England) Regulations 2012(24) are revoked on 1st April 2014.

Amendments

3.—(1) The Schools Forums (England) Regulations 2012(25) are amended as follows.

(2) In regulation 1(3), after “In these Regulations—”, insert—

““16 to 19 provider” means—

(a)

an institution within the further education sector, or

(b)

an educational institution other than one referred to in subparagraph (a) that is principally concerned with providing further education suitable for persons over compulsory school age who have special educational needs or learning difficulties or are subject to learning difficulty assessment,

where 20% or more of the students at the institution reside in the authority’s area;.”.

(3) In regulation 1(3), in the definition of “representative”, after “save for in”, insert—

• “regulation 7(1)(a) and”.

(4) In regulation 4(2)(c), after “non-schools members appointed” insert—

• “or elected”.

(5) For regulation 4(3), substitute—

“(3) If, for any reason, an election for a schools member under regulation 5(1), an Academies member under regulation 6(1), or person to represent 16 to 19 providers under regulation 7(1)(a) either does not take place by the date (if any) set by an authority or results in a tie between two or more candidates, the authority must appoint the schools member, Academies member or person to represent 16 to 19 providers to their schools forum instead.”

(6) In regulation 7, for paragraph (1), substitute—

“(1) The schools forum must include—

(a) where there is at least one 16 to 19 provider, at least one person to represent 16 to 19 providers, that person to be elected by representatives of the 16 to 19 providers, or if there is only one 16 to 19 provider, by the representatives of that provider; and

(b) one or more persons appointed by the authority to represent early years providers.”

(7) In regulation 8, for paragraphs (9A) and (9B), substitute—

“(9A) Only the schools members of the schools forum who are representatives of primary schools may vote to decide whether or not to authorise the matters referred to in regulation 12(1)(d) of the School and Early Years Finance (England) Regulations 2013 where they relate to primary schools.

(9B) Only the schools members of the schools forum who are representatives of secondary schools may vote to decide whether or not to authorise the matters referred to in regulation 12(1)(d) of the School and Early Years Finance (England) Regulations 2013 where they relate to secondary schools.”.

PART 2 Action to be Taken by a Local Authority

CHAPTER 1 Determination of the Non-Schools Education Budget, Schools Budget, Individual Schools Budget, and Budget Shares

The non-schools education budget

4.  The following classes or descriptions of local authority expenditure are prescribed for the purposes of section 45A(1) of the 1998 Act and the determination of a local authority’s non-schools education budget, subject to the exceptions in regulation 7—

(a) those specified in Schedule 1, including expenditure on associated administrative costs and overheads; and

(b) any expenditure which falls outside the classes or descriptions of expenditure specified in regulation 6 and Schedule 2 (the schools budget).

Initial determination of a local authority’s schools budget

5.  A local authority must not later than 28th February 2014—

(a) make an initial determination of their schools budget; and

(b) give notice of that determination to the governing bodies of the schools they maintain.

The schools budget

6.—(1) The classes or descriptions of local authority expenditure specified in paragraph (2) and Schedule 2 are prescribed for the purposes of section 45A(2) of the 1998 Act and the determination of a local authority’s schools budget, subject to the exceptions in regulation 7.

(2) The classes or descriptions of local authority expenditure are—

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

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

(c) all other expenditure incurred in connection with the authority’s functions in relation to the provision of primary and secondary education, in so far as that expenditure does not fall within sub-paragraphs (a) or (b);

(d) expenditure on the education of—

(i) children or students up to the age of 25 with special educational needs;

(ii) persons provided with further education who are aged under 19 and have a learning difficulty; and

(iii) persons provided with further education who are aged 19 or over but under 25 and are subject to learning difficulty assessment,

in so far as that expenditure does not fall within sub-paragraphs (a) to (c); and

(e) expenditure on early years provision, in so far as that expenditure does not fall within sub-paragraphs (a) to (d).

Exceptions

7.  A local authority’s non-schools education budget or schools budget must not include the following classes or descriptions of expenditure—

(a) capital expenditure, other than—

(i) CERA,

(ii) capital expenditure appropriated to the schools budget for the purpose of funding pay arrears due to staff whose salaries are met from the schools budget;

(b) expenditure on capital financing, other than expenditure incurred—

(i) on prudential borrowing,

(ii) for the purpose of meeting the costs of financing the payment of pay arrears referred to in paragraph (a)(ii); and

(c) expenditure for the purposes of section 26 of the Road Traffic Regulation Act 1984(26) (arrangements for patrolling school crossings).

Determination of the individual schools budget for the funding period and limit on increase in central expenditure

8.—(1) Subject to paragraphs (2) to (10), not later than 28th February 2014, a local authority must deduct from their schools budget such of the classes or descriptions of planned expenditure set out in Schedule 2 as they propose to deduct, in order to determine their individual schools budget.

(2) Expenditure referred to in paragraphs 3 and 4 of Part 1 (Central Services) of Schedule 2 may only be deducted by the local authority where the expenditure is to be incurred as a result of decisions taken prior to 1st April 2013 that commit the authority to incur expenditure in the funding period.

(3) In deducting the expenditure referred to in Part 1 (Central Services) of Schedule 2, a local authority must not exceed the limits referred to in paragraph 5 of Schedule 2, unless they are authorised to do so under regulation 25(1)(a).

(4) A local authority must not deduct the expenditure referred to in paragraphs 8 to 10 of Schedule 2 without authorisation of the criteria for determining the expenditure from their schools forum under regulation 12(1), or from the Secretary of State under regulation 12(3).

(5) A local authority must not deduct the expenditure referred to in Part 1 (Central Services), Part 2 (Central Schools Expenditure), Part 3 (Central Early Years Expenditure) or Part 5 (Items That May Be Removed From Maintained Schools’ Budget Shares) of Schedule 2 without authorisation from their schools forum under regulation 12(1), or from the Secretary of State under regulation 12(3).

(6) Where a local authority carries forward a deficit from the previous funding period to the funding period which reduces the amount of the schools budget available, the funding of this deficit from the schools budget must be authorised by their schools forum under regulation 12(1), or the Secretary of State under regulation 12(3).

(7) Any amount of expenditure which was deducted under paragraphs 8 (growth fund) and 10 (extra infant classes) of Schedule 2 to the 2012 Regulations for the previous funding period and which remains unspent may be used by the local authority in the funding period for the purposes listed in paragraphs 8 and 10 of Schedule 2 of the 2012 Regulations that applied to such expenditure.

(8) Where a local authority treated any expenditure described in Part 5 of Schedule 2 to the 2012 Regulations (Items That May Be Removed From Maintained Schools’ Budget Shares) as central expenditure under regulation 11(3) of the 2012 Regulations for the previous funding period and any such amounts remain unspent, such amounts may be used by the local authority in the funding period for the purposes listed in Part 5 of Schedule 2 to the 2012 Regulations that applied to such expenditure.

(9) A local authority may apply to the Secretary of State for authorisation under regulation 25(1) to—

(a) deduct from their schools budget any expenditure falling outside the classes or descriptions of planned expenditure set out in Schedule 2, in order to determine their individual schools budget; and

(b) alter the operation of regulation 11(3) (additional costs of pupils with special educational needs);

(10) References to planned expenditure in this regulation and Schedule 2 are references to that expenditure net of—

(a) all related specific grants;

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

(c) any funding received from the Secretary of State in respect of a charge payable by a local authority under a private finance transaction, as defined in regulation 16 of the Local Authorities (Capital Finance) Regulations 1997(27);

(11) The expenditure referred to in Schedule 2 includes expenditure on associated administrative costs and overheads.

Consultation

9.—(1) In determining the formulae under regulation 10 a local authority may make changes to the formulae they determined under regulation 10 of the 2012 Regulations.

(2) Subject to paragraph (4), a local authority must consult their schools forum and schools maintained by them about any proposed changes under paragraph (1), in relation to the factors and criteria taken into account, and the methods, principles and rules adopted.

(3) Where a local authority propose to make changes under paragraph (1) which will affect relevant early years providers or exempt early years providers in their area they must also consult those providers in relation to the factors and criteria taken into account, and the methods, principles and rules adopted.

(4) Paragraph (2) does not apply to changes made relating to matters referred to in regulation 20 (Sixth form funding) or 23 (Excluded pupils).

(5) A local authority must consult their schools forum before incurring any of the expenditure referred to in paragraphs 8 to 10 of Schedule 2.

Formulae for determination of budget shares etc for certain maintained schools and early years providers

10.—(1) A local authority must, before the beginning of the funding period and after carrying out any consultation required by regulation 9(2), decide upon the formula which they will use to determine the budget shares for schools maintained by them (other than special schools, pupil referral units, nursery schools and in relation to nursery classes in schools maintained by them).

(2) A local authority must use the formula determined under paragraph (1) in all determinations of school budget shares in respect of the funding period.

(3) A local authority must, before the beginning of the funding period and after carrying out any consultation required by regulation 9(2) or 9(3), decide upon the formula they will use to determine—

(a) the budget shares for nursery schools maintained by them;

(b) the amounts to be allocated in respect of nursery classes in schools maintained by them;

(c) the amounts to be allocated to relevant early years providers in their area;

(d) the amounts to be allocated to exempt early years providers in their area; and

(e) the amounts to be allocated in respect of community early years provision in schools maintained by them.

(4) A local authority must use the formula determined under paragraph (3) when making all of the determinations referred to in paragraph (3)(a) to (e) in respect of the funding period.

(5) A local authority may not make changes to their formulae after the funding period has commenced.

(6) The formulae must be determined in accordance with Part 3.

Determination of allocation of budget shares etc for the funding period

11.—(1) Except as provided for in paragraphs (2), (5) and (6), not later than 28th February 2014, a local authority must determine the budget share for each of the schools maintained by them (using the formula referred to in regulation 10(1) in accordance with Part 3 of these Regulations.

(2) Paragraph (1) does not apply to any determination of amounts to be included in budget shares under regulation 20 (Sixth form funding) and in relation to such determinations the local authority must make the determination and notify the school to which the determination relates within a reasonable period after the notification given by the Secretary of State under regulation 20(1).

(3) When making the determination under paragraph (1) the local authority must identify within each budget share an amount calculated by reference to the requirements, factors and criteria specified in Part 3 which are relevant to pupils with special educational needs, such amount must be calculated using a sum of £6,000 as the threshold below which school will be expected to meet the additional costs of pupils with special educational needs from its budget share.

(4) After the local authority have made a determination under paragraph (1) but before giving notice under paragraph (7), the authority may apply to their schools forum under regulation 12(1), or to the Secretary of State under regulation 12(2) for authorisation to redetermine schools’ budget shares by removing any of the expenditure referred to in Part 5 of Schedule 2 (Items That May Be Removed From Maintained Schools’ Budget Shares) from the budget shares of—

(a) all primary schools other than nursery schools;

(b) all secondary schools; or

(c) all primary schools other than nursery schools, and all secondary schools,

where the expenditure is instead to be treated as if it were part of central expenditure.

(5) Not later than 31st March 2014, a local authority must determine the budget share for each of the special schools and pupil referral units maintained by them in accordance with Part 3 of these Regulations.

(6) Not later than 31st March 2014, a local authority must determine the budget share for each of the nursery schools maintained by them, the amount to be allocated in respect of each nursery class in schools maintained by them, the amount to be allocated to each relevant early years provider in their area, the amount to be allocated to each exempt early years provider in their area and the amount to be allocated in respect of community early years provision, using the formula referred to in regulation 10(3) in accordance with Part 3 of these Regulations.

(7) Not later than 31st March 2014, a local authority must give notice of—

(a) each budget share or amount determined under paragraphs (1), (5) and (6); or

(b) the redetermined budget share, when the budget share has been redetermined under paragraph (4),

to the governing body of the school, the exempt early years provider or the relevant early years provider concerned.

(8) Save as provided in this regulation and in regulations 16 (Special arrangements for pupils in maintained nursery schools and nursery classes and children receiving relevant early years provision), 17 (Differential funding), 20 (Sixth form funding), 22 (Federated schools), 23 (Excluded pupils), 24 (Correction of errors and non-domestic rates) and 25 (Alternative arrangements), the authority must not redetermine a school’s budget share, or the amount allocated to a relevant early years provider or an exempt early years provider.

CHAPTER 2 Further Deductions and Variations to Limits Authorised by Schools Forums or the Secretary of State

Applications to the schools forum and the Secretary of State

12.—(1) Subject to paragraph (2), on the application of a local authority, their schools forum may authorise—

(a) the criteria for determining expenditure referred to in paragraphs 8, 9 or 10 of Schedule 2, under regulation 8(4);

(b) the making of deductions from the authority’s schools budget of expenditure under regulation 8(5);

(c) the funding of any deficit from the schools budget under regulation 8(6); or

(d) the redetermination of schools’ budget shares by removal of any of the expenditure referred to in Part 5 of Schedule 2 (Items That May Be Removed From Maintained Schools’ Budget Shares) from schools’ budget shares where it is instead to be treated by the authority as if it were part of central expenditure, under regulation 11(4).

(2) Where—

(a) a schools forum does not authorise any of the matters referred to in paragraph (1); or

(b) a local authority are not required to establish a schools forum for their area,

the authority may make an application to the Secretary of State for such authorisation.

(3) On the application of a local authority under paragraph (2), the Secretary of State may authorise the matters referred to in paragraph (1).

PART 3 Determination of Budget Shares etc

CHAPTER 1 Requirements, and Factors and Criteria Taken into Account

Pupil numbers

13.—(1) In determining budget shares for primary and secondary schools, except in respect of nursery classes a local authority must ascertain and take into account in their formula the number of pupils at those schools in accordance with paragraph (2) on the date specified in paragraph (3).

(2) For the purposes of paragraph (1), the number of pupils is where—

(a) A is the total number of pupils in the school;

(b) B is the number of places in the school which the authority have reserved for children with special educational needs;

(c) C is the number of children in places in the school which the authority have reserved for children with special educational needs where those places are occupied by a child in a nursery class, or by a child who is not a pupil at the school;

(d) D is the number of pupils in the school in respect of whom sixth form grant is payable.

(3) The date for ascertaining pupil numbers is 3rd October 2013.

(4) Where a primary school had more pupils in reception classes on 17th January 2013 than on 4th October 2012, the local authority may take into account in their formula the number of additional pupils, and where they do so this factor must be applied to all primary schools in the area.

(5) A local authority must include in their formula a single per pupil amount of at least—

(a) £2,000 for each of the pupils in reception classes and at key stages 1 and 2;

(b) £3,000 for each of the pupils at key stage 3; and

(c) £3,000 for each of the pupils at key stage 4;

where the number of pupils is calculated with reference to paragraphs (2) to (4).

Places

14.—(1) In determining budget shares for special schools, a local authority must include the sum of £10,000 for each place other than hospital education places and places for pupils in respect of whom sixth form grant is payable, but only where the sixth form grant is payable for a period up to 31st July 2014.

(2) In determining budget shares for primary or secondary schools maintained by the local authority, with places which the authority have reserved for children with special educational needs, a local authority must include the sum of £10,000 for each place other than places for pupils in respect of whom a sixth form grant is payable and hospital education places.

(3) In determining budget shares for pupil referral units, a local authority must include the sum of £8,000 for each place other than hospital education places.

(4) For each hospital education place referred to in paragraphs (1) to (3) the local authority must include the equivalent amount per hospital education place which the authority included in the budget share of the school or pupil referral unit, as the case may be, in the previous funding period.

Social deprivation

15.—(1) In determining budget shares for schools maintained by them (other than special schools, pupil referral units or nursery schools), a local authority must take into account in their formula a factor or factors based on the incidence of social deprivation in pupils at the schools maintained by them.

(2) The authority must base the incidence of social deprivation referred to in paragraph (1) on one or both of the following—

(a) a pupil’s eligibility for free school meals on 3rd October 2013 or a pupil’s eligibility for free school meals recorded in any school census between and including Summer 2007 and Spring 2013;

(b) a pupil’s IDACI score on 3rd October 2013,

and where it is based on an IDACI score the authority may use factors which differentiate between different IDACI bands.

(3) In determining budget shares pursuant to paragraph (1), the authority may take into account in their formula a single per pupil amount for each socially deprived pupil in reception classes and at key stage 1 and 2, and a single per pupil amount for each socially deprived pupil at key stage 3 and 4.

(4) In paragraph (3) a reference to a “socially deprived pupil” is to a pupil who has been determined as being such pursuant to paragraph (2).

(5) Other than in respect of two year olds, in determining—

(a) budget shares for maintained nursery schools;

(b) amounts to be allocated in respect of nursery classes in schools maintained by them;

(c) amounts to be allocated to relevant early years providers in their area;

(d) amounts to be allocated to exempt early years providers in their area; and

(e) amounts to be allocated in respect of community early years provision in schools maintained by them,

a local authority must take into account in their formula a factor or factors based on the incidence of social deprivation in pupils or children, and the determination of the incidence of social deprivation must be based on the characteristics of the pupils or children and not on the location of the school or provider.

(6) In respect of two year olds, in determining—

(a) budget shares for maintained nursery schools;

(b) amounts to be allocated in respect of nursery classes in schools maintained by them;

(c) amounts to be allocated to relevant early years providers in their area;

(d) amounts to be allocated to exempt early years providers in their area; and

(e) amounts to be allocated in respect of community early years provision in schools maintained by them,

a local authority may take into account in their formula a factor or factors based on the incidence of social deprivation in pupils or children, and the determination of the incidence of social deprivation must be based on the characteristics of the pupils or children and not on the location of the school or provider.

Special arrangements for pupils in maintained nursery schools and nursery classes and for children receiving relevant early years provision, exempt early years provision and community early years provision

16.—(1) Subject to paragraphs (5) and (6), in determining—

(a) budget shares for nursery schools maintained by them;

(b) amounts to be allocated in respect of nursery classes in schools maintained by them;

(c) amounts to be allocated to relevant early years providers in their area;

(d) amounts to be allocated to exempt early years providers in their area; and

(e) amounts to be allocated in respect of community early years provision in schools maintained by them,

a local authority must take into account in their formula the predicted total number of hours of attendance of pupils or children, using as a basis for the calculation the most recent data available about the actual numbers of pupils or children.

(2) When further information about hours of attendance becomes available a local authority must—

(a) review the budget share for each maintained nursery school, the amount allocated in respect of each nursery class and the amount allocated in respect of community early years provision; and

(b) redetermine that budget share or amount allocated, as the case may be.

(3) When carrying out a review and redetermination under paragraph (2) the local authority must—

(a) in the case where the local authority decide to fund only prescribed early years provision, take into account—

(i) the predicted total number of hours of attendance of pupils in the nursery school or nursery class, and children being provided community early years provision, who will receive prescribed early years provision during the period (using as a basis for the calculation the actual hours of such attendance in each of at least three sample weeks); or

(ii) the actual total number of hours of such attendance for the period;

(b) in the case where the local authority decide to fund early years provision in excess of that which is prescribed take into account—

(i) the predicted total number of hours of attendance of pupils in the nursery school or nursery class, and children being provided community early years provision, who will receive early years provision during the period (using as a basis for the calculation the actual hours of such attendance in each of at least three sample weeks); or

(ii) the actual total number of hours of such attendance for the period.

(4) When further information about hours of attendance becomes available, a local authority must—

(a) review the amount allocated to each relevant early years provider and exempt early years provider; and

(b) redetermine the amount allocated.

(5) When carrying out a review and redetermination under paragraph (4) the local authority must take into account—

(a) the predicted total number of hours of attendance of children who will receive prescribed early years provision from the relevant early years provider, or exempt early years provision from the exempt early years provider as the case may be, during the period (using as a basis for the calculation the actual hours of such attendance in each of at least three sample weeks); or

(b) the actual total numbers of hours of such attendance for the period.

(6) Within 28 days of making any redetermination pursuant to paragraph (2) or (4) the local authority must give notice of the redetermination and the date on which it will be implemented to the governing body of the school, the relevant early years provider, or the exempt early years provider concerned, within 28 days of the redetermination.

(7) When making determinations under this regulation a local authority may weight the predicted total number of hours of attendance of pupils or children, according to the special educational needs of any such pupils or children.

(8) When determining—

(a) budget shares for nursery schools maintained by them;

(b) amounts to be allocated in respect of nursery classes in schools maintained by them;

(c) amounts to be allocated to relevant early years providers in their area;

(d) amounts to be allocated to exempt early years providers in their area;

(e) amounts to be allocated in respect of community early years provision in schools maintained by them,

a local authority may take into account in their formula the number of places they wish to fund in the school, class or provider (instead of the predicted total number of hours of attendance), where those places have been reserved by the authority for children with special educational needs, children in need or children that meet the condition prescribed by regulation 3(2) of the Local Authority (Duty to Secure Early Years Provision Free of Charge) Regulations 2012(28).

(9) In paragraph (8) “children in need” means children in respect of whom the local authority in whose area they reside must provide a range of services appropriate to their needs under section 17 of the Children Act 1989(29).

Differential funding

17.  For the purpose of determining or redetermining—

(a) budget shares for nursery schools maintained by them;

(b) amounts to be allocated in respect of nursery classes in schools maintained by them;

(c) amounts to be allocated to relevant early years providers in their area;

(d) amounts to be allocated to exempt early years providers in their area; and

(e) amounts to be allocated in respect of community early years provision in schools maintained by them,

a local authority may use factors or criteria which differentiate between different categories or descriptions of school or provider on the basis of unavoidable costs.

Additional requirements, factors or criteria

18.—(1) Subject to paragraph (3), in determining budget shares, a local authority may take into account in their formula any or all of the requirements, factors or criteria set out in Part 1 of Schedule 3, and where they do the date for ascertaining pupil numbers is 3rd October 2013, save as otherwise stated.

(2) Subject to regulation 17 (Differential funding), in determining—

(a) budget shares for nursery schools maintained by them;

(b) amounts to be allocated in respect of nursery classes in schools maintained by them;

(c) amounts to be allocated to relevant early years providers in their area;

(d) amounts to be allocated to exempt early years providers in their area; and

(e) amounts to be allocated in respect of community early years provision in schools maintained by them,

a local authority may take into account in their formula any or all of the requirements, factors or criteria set out in Part 2 of Schedule 3.

(3) The requirements, factors and criteria set out in Schedule 3 may not be taken into account by a local authority on the basis of actual or estimated cost unless otherwise stated in that Schedule.

(4) Subject to paragraphs (5) to (7), where a school would otherwise receive a greater amount of redetermined adjusted budget share per pupil than it did in the previous funding period, the local authority may do one or both of the following—

(a) determine a percentage beyond which the per pupil amount of redetermined adjusted budget may not increase by;

(b) determine a percentage by which the amount that the per pupil redetermined adjusted budget share would otherwise increase by will be reduced.

(5) In paragraph (4) “redetermined adjusted budget share for the previous funding period” and “redetermined adjusted budget share” have the same meanings as in Schedule 4.

(6) Where the local authority decide to take one or both of the actions described in paragraph (4)(a) and (b), this must be applied to the budget shares of all schools in the local authority area.

(7) Paragraph (4) does not apply to the determination of budget shares for—

(a) special schools;

(b) pupil referral units;

(c) nursery schools; and

(d) schools that have opened in any of the previous seven funding periods and do not yet have pupils in each year group for which the school proposes to provide education.

Minimum funding guarantee

19.—(1) Subject to paragraph (4), in determining and redetermining budget shares for primary and secondary schools maintained by them, a local authority must ensure that an amount equal to the guaranteed funding level is included, calculated in accordance with Schedule 4.

(2) For the purpose of determining budget shares, paragraph (1) does not apply to any school opening during the funding period, except in the circumstances set out in paragraph 3 of Schedule 4.

(3) In determining and redetermining—

(a) budget shares for nursery schools maintained by them;

(b) amounts to be allocated in respect of nursery classes in schools maintained by them;

(c) amounts to be allocated to relevant early years providers in their area;

(d) amounts to be allocated to exempt early years providers in their area,

a local authority must ensure that the number by which they multiply the predicted total number of hours calculated pursuant to regulation 16(1) is no lower than 1.5 percent less than the number by which they multiplied the predicted total number of hours calculated pursuant to regulation 16(1) of the 2012 Regulations for making such determinations and redeterminations in the previous funding period.

(4) A local authority may make changes to the operation of this regulation and to the operation of Schedule 4 in determining and redetermining budget shares where authorised to do so by the Secretary of State under regulation 25 (Alternative arrangements).

Sixth form funding

20.—(1) A local authority must include in the budget shares of maintained secondary schools and special schools an amount equal to any sum notified to the local authority by the Secretary of State as being the allocation in respect of that school’s sixth form grant.

(2) A local authority may, in determining budget shares, use a factor which allocates funding in respect of the number of pupils in sixth forms on 3rd October 2013 subject to the limitation in paragraph (3).

(3) Where a local authority use a factor in determining budget shares pursuant to paragraph (2) they must ensure that the amount allocated per pupil in respect of this factor in the funding period is no greater than the amount that was allocated per pupil in sixth forms in the previous funding period.

(4) A local authority must redetermine the budget share of a secondary school before the end of the funding period where the authority receive a written notification from the Secretary of State of a revised allocation in respect of the sum referred to in paragraph (1).

New schools, merged schools and closing schools

21.—(1) Where in the funding period a new maintained school opens and is a replacement for two or more maintained schools that are discontinued during that funding period a local authority must calculate the budget share of the new school by adding together the budget shares of the schools that have been discontinued.

(2) Except where paragraph (1) applies, a local authority must determine a budget share for any new maintained school in their area from the date of the school’s opening in accordance with this Part.

(3) Where in the previous funding period or on 1st April 2014 a new maintained school opened or opens and is a replacement for two or more maintained schools that were discontinued during that funding period, a local authority must include in the budget share of the new school an amount equal to 85% of the total amount which the schools that it replaced would have been allocated in their budget shares under paragraphs 1 and 2 of Schedule 3 (single sums), had the schools not been discontinued.

(4) A local authority must determine a budget share for any maintained school which is to be discontinued in the funding period in their area up to the date the school is discontinued in accordance with this Part.

(5) A local authority may make changes to the operation of this regulation where authorised to do so by the Secretary of State under regulation 25 (Alternative arrangements).

Federated schools

22.—(1) Subject to paragraphs (2) and (3), where two or more maintained schools are federated under section 24 of the 2002 Act, the local authority must determine a budget share for each school in accordance with Part 3 of these Regulations.

(2) After carrying out the determination under paragraph (1) the local authority may treat the schools as a single school for the purposes of these Regulations and, accordingly, allocate a single budget share to the governing body of the federation.

(3) Where the local authority decide to allocate a single budget share to the governing body of a federation under paragraph (2) they must determine this by combining the budget shares of all the schools that form part of that federation.

(4) Where one or more schools are to leave a federation which has been allocated a single budget share under paragraph (2), the local authority must—

(a) determine the budget share for each of the leaving schools; and

(b) redetermine the budget share for the federation,

in accordance with Part 3 of these Regulations.

CHAPTER 2 Adjustments, Correction of Errors, and Alternative Arrangements Authorised by the Secretary of State

Pupils permanently excluded from, or leaving, maintained schools

23.—(1) Where a pupil is permanently excluded from a school maintained by a local authority (other than a special school, pupil referral unit or from a place which the authority have reserved for children with special educational needs) (“the excluding school”) the authority must redetermine the excluding school’s budget share in accordance with paragraph (2).

(2) The excluding school’s budget share must be reduced by the amount where—

(a) A is the amount determined by the authority in accordance with this Part, that would be attributable to a pupil of the same age and personal circumstances as the pupil in question at primary or secondary schools maintained by the authority for the full funding period;

(b) B is either—

(i) the number of complete weeks remaining in the funding period calculated from the relevant date; or

(ii) where the permanent exclusion takes effect on or after 1st April in a school year(30) at the end of which pupils of the same age, or age group, as the pupil in question normally leave that school before being admitted to another school with a different pupil age range, the number of complete weeks remaining in that school year calculated from the relevant date; and

(c) C is the amount of the adjustment made to the school’s budget share pursuant to a financial adjustment order.

(3) Where a pupil who has been permanently excluded from the excluding school and is admitted to another school maintained by a local authority (other than a special school, pupil referral unit or to a place which the authority have reserved for children with special educational needs) (“the admitting school”) in the funding period, the authority must redetermine the admitting school’s budget share in accordance with paragraphs (4) and (5).

(4) The admitting school’s budget share must be increased by an amount which may not be less than the amount where—

(a) D is the amount by which the authority reduced the budget share of the excluding school, or would have reduced the budget share had that school been maintained by the authority, except that any reduction in the excluding school’s budget share made pursuant to a financial adjustment order must not be taken into account for these purposes;

(b) E is the number of complete weeks remaining in the funding period during which the pupil is a pupil at the admitting school; and

(c) F is the number of complete weeks remaining in the funding period calculated from the relevant date.

(5) In redetermining the admitting school’s budget share, the authority may increase it by any amount up to the amount of the adjustment made by the excluding school’s budget share pursuant to a financial adjustment order.

(6) Where a permanently excluded pupil is subsequently reinstated by the governing body of the school, the school’s budget share must be increased by an amount which is no less than where—

(a) G is the amount by which the authority reduced the school’s budget share under paragraph (2);

(b) H is the number of complete weeks remaining in the funding period during which the pupil is reinstated; and

(c) I is the number of complete weeks remaining in the funding period calculated from the relevant date.

(7) Paragraphs (1) and (2) also apply where a pupil leaves a maintained school (other than a special school, pupil referral unit or from a place which the authority have reserved for children with special educational needs) for reasons other than permanent exclusion and is receiving education funded by a local authority other than at a school which is maintained by that authority.

(8) For the purposes of paragraph (2)(a), the amount attributable to a pupil is the sum of the amounts determined in accordance with the authority’s formula, by reference to pupil numbers rather than by reference to any other factor or criterion not dependent on pupil numbers (except that, where the pupil in question is a pupil in respect of whom a sixth form grant is payable, the amount attributable to that pupil is £4,000 for the funding period).

(9) Where a pupil in respect of whom a pupil premium is payable has been permanently excluded from a school maintained by a local authority (“the excluding school”) the local authority must redetermine the excluding school’s budget share in accordance with paragraph (10).

(10) The excluding school’s budget share must be reduced by where—

(a) J is the amount of the pupil premium allocated to the excluding school for the funding period in respect of that child; and

(b) K is either—

(i) the number of complete weeks remaining in the funding period calculated from the relevant date; or

(ii) where the permanent exclusion takes effect on or after 1st April in a school year at the end of which pupils of the same age, or age group, as the pupil in question normally leave that school before being admitted to another school with a different pupil age range, the number of complete weeks remaining in that school year calculated from the relevant date.

(11) Where a pupil in respect of whom a pupil premium is payable has been permanently excluded from a school maintained by a local authority and admitted to another school maintained by a local authority (“the admitting school”) in the funding period, the authority must redetermine the budget share of the admitting school in accordance with paragraph (12).

(12) The admitting school’s budget share must be increased by an amount which may not be less than where—

(a) L is the amount by which the authority reduced the budget share of the excluding school or would have reduced the budget share had that school been maintained by the authority;

(b) M is the number of complete weeks remaining in the funding period during which the pupil is a pupil at the admitting school; and

(c) N is the number of complete weeks remaining in the funding period calculated from the relevant date.

(13) Where a permanently excluded pupil in respect of whom a pupil premium is payable is subsequently reinstated by the governing body of the school, the school’s budget share must be increased by an amount which is no less than where—

(a) O is the amount by which the authority reduced the school’s budget share under paragraph (10);

(b) P is the number of complete weeks remaining in the funding period during which the pupil is reinstated; and

(c) Q is the number of complete weeks remaining in the funding period calculated from the relevant date.

(14) Paragraphs (9) and (10) also apply where a pupil in respect of whom a pupil premium is payable leaves a maintained school for reasons other than permanent exclusion and is receiving education funded by a local authority other than at a school which is maintained by that authority.

(15) For the purposes of this regulation—

(a) “the relevant date” is the sixth school day following the date on which the pupil has been permanently excluded; and

(b) “a financial adjustment order” means an order for the adjustment of a school’s budget share made under regulation 25(5)(b) of the School Discipline (Pupil Exclusions and Reviews) (England) Regulations 2012(31) in respect of the exclusion of the pupil from the excluding school.

Correction of errors and changes in non-domestic rates

24.—(1) A local authority may at any time during the funding period redetermine a maintained school’s budget share, the amount allocated to a relevant early years provider, or the amount allocated to an exempt early years provider for the funding period or any previous funding period in order to correct an error in a determination or redetermination under these or any previous Regulations, whether arising from a mistake as to the number of pupils at the school or otherwise, and any such redetermination will take effect in the next financial year following the funding period.

(2) A local authority may redetermine a school’s budget share to take into account any changes in that school’s non-domestic rate liability in relation to the funding period or any previous funding period.

(3) In so far as any redetermination under paragraph (1) would require the amount that would otherwise have been the budget share of a school to be reduced, it may not be reduced to a figure which is lower than that which could have been allocated to that school under the Regulations in force during the funding period in which the error occurred.

Alternative arrangements approved by Secretary of State

25.—(1) Subject to paragraph (2), on application by a local authority, the Secretary of State may authorise the authority to—

(a) disregard the limits referred to in paragraph 5 of Schedule 2 when deducting any expenditure referred to in regulation 8(3) (Central Services expenditure);

(b) deduct any expenditure referred to in regulation 8(9)(a) (expenditure falling outside of Schedule 2);

(c) alter the operation of regulation 11(3) (additional expenditure on children with special educational needs);

(d) determine or redetermine budget shares of schools maintained by them;

(e) determine or redetermine amounts to be allocated in respect of nursery classes in schools maintained by them;

(f) determine or redetermine amounts to be allocated to relevant early years providers in their area;

(g) determine or redetermine amounts to be allocated to exempt early years providers in their area;

(h) include additional factors or criteria in their formula under regulation 10(1) (formula for determining budget shares) where the nature of a school’s premises exceptionally gives rise to significant additional cost;

(i) include additional factors or criteria that the authority propose to include in their formula under regulation 10(3) (early years single funding formula);

(j) vary the amount by which a school’s redetermined adjusted budget share shall be reduced for the purpose of determining the guaranteed level of funding in paragraph 1 of Schedule 4;

(k) disregard regulation 13 (Pupil numbers);

(l) alter the operation of regulation 21 (New schools, merged schools and closing schools) in respect of particular schools; and

(m) alter the operation of paragraphs 13 (primary sparsity) and 14 (secondary sparsity) of Schedule 3 in respect of particular schools.

(2) The Secretary of State may authorise the matters referred to in paragraph (1) to such extent as the Secretary of State may specify in accordance with arrangements approved in place of the arrangements provided for by these Regulations.

PART 4 Schemes

Required content of schemes

26.  A scheme prepared by a local authority under section 48(1) of the 1998 Act must deal with the matters connected with the financing of schools maintained by the authority set out in Schedule 5.

Approval by the schools forum or the Secretary of State of proposals to revise schemes

27.—(1) Where a local authority submit a copy of their proposals to revise their scheme to their schools forum for approval pursuant to paragraph 2A(3)(b) of Schedule 14 to the 1998 Act, the members of the schools forum who represent schools maintained by the authority may—

(a) approve any such proposals;

(b) approve any such proposals subject to modifications; or

(c) refuse to approve any such proposals.

(2) Where the schools forum approves the proposals to revise the scheme, it may specify the date upon which the revised scheme is to come into force.

(3) Where—

(a) the schools forum refuses to approve proposals submitted under paragraph 2A(3)(b) of Schedule 14 to the 1998 Act, or approves any such proposals subject to modifications which are not acceptable to the local authority; or

(b) the local authority are not required to establish a schools forum for their area,

the authority may apply to the Secretary of State for approval of such proposals.

(4) The Secretary of State may—

(a) approve any such proposals;

(b) approve any such proposals subject to modifications; or

(c) refuse to approve any such proposals.

(5) When approving proposals to revise the scheme, the Secretary of State may specify the date upon which the revised scheme is to come into force.

(6) No revised scheme is to come into force unless approved by the schools forum or the Secretary of State in accordance with this regulation.

Publication of schemes

28.—(1) A local authority—

(a) must publish their scheme on a website which is accessible to the general public; and

(b) may publish it elsewhere, in such manner as they see fit.

(2) Whenever a local authority revise the whole or part of their scheme they must publish the scheme as revised on a website which is accessible to the general public by the date that the revisions are due to come into force, together with a statement that the revised scheme comes into force on that date.

David Laws

Minister of State

Department for Education

5th December 2013