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Hampshire County Council Education Policy Review Committee 21 January 2003 Revenue Budget 2003/04 Report of the County Treasurer and County Education Officer

Item 6

Contact: Trevor Mansley, Education Finance Unit (01962 847545)

1. Executive Overview and Summary

1.1 This report sets out the proposed Education revenue budget for 2003/04 and reports on the revised budget for 2002/03. The Education Executive Member is being recommended to approve for submission to the Cabinet:

· virement to capital totalling £890,000 of which £190,000 is to fund adaptations at the Bridge Centre, Eastleigh and £700,000 to meet the Education Service's contribution to the rebuilding costs of St Bede School;

· that the net forecast savings in 2002/03 totalling £1,284,000 be carried forward to 2003/04;

· the base budget (as set out in Appendix 1 and Annexes 1 to 4);

· the efficiency improvements and savings (as set out in Appendix 2);

· the proposals for new growth and redeployment of resources: Schools and LEA Blocks (Appendix 3);

· the review of charges (as set out in Appendix 4);

· the Education budget (as set out in Appendix 5);

· the summarised trading accounts for business units (as set out in Appendix 6);

· the implications of the new funding system for Education and, in particular, the extent to which the passported increase in schools' funding, both from the schools' formula spending share and from specific grants meets identified costs and pressures.

1.2 The strategy behind the budget proposals endorsed by the Schools Forum on 10 January 2003 can be summarised as making the best use of constrained resources to work towards the County Council's top priorities of improving educational attainment, particularly for children at risk of social exclusion. Specific steps are:

· Addressing the changes made by Government to the Standards Fund grants, in particular the ceasing of a number critical to the school improvement agenda

· Continuing the programme of improvements in early years, behaviour intervention and support for pupils with SEN

· Recognising the funding challenge faced by schools in retaining and recruiting teachers and other staff and in meeting cost increases above the allowed inflation level

· Using the estimated carry forward to fund one-off expenditure items in 2003/04 and spread the balance remaining over 2003/04 and 2004/05 to assist continuing budget pressures

· Reducing the contingency provision for Home to School Transport and the general contingency

· Investing in the achievement of the PSA targets so that sufficient additional funding will be received in 2005/06 to maintain the funding of the continuing budget pressures.

1.3 Prior to the Executive Member considering the budget, this report is being presented to the Education Policy Review Committee to provide the opportunity to comment to the Executive Member on the proposals.

1.4 The chairman of the Education Policy Review Committee agreed to this item being circulated outside the normal timetable to allow the views of the Schools Forum meeting on 10 January to be included in the report.

1 Introduction

2.1 The contents of this report are:

· Section 3: Revised Budget 2002/03

· Section 4: Base Budget 2003/04

· Section 5: Current Service Variations which impact on 2003/04

· Section 6: Summary

· Section 7: Education Funding changes 2003/04

· Section 8: County Council Budget Strategy 2003/04

· Section 9: Schools Budget Proposals 2003/04 and recommendations from the Schools Forum

· Section 10: Redeployment and Savings Proposals 2003/04: LEA Block

· Section 11: Summary

· Section 12: Effect on Schools' Budgets 2003/04

· Section 13: Efficiency Improvements: Education Services

· Section 14: Review of Charges

· Section 15: Other Expenditure

· Section 16: Mandatory Awards

· Section 17: Staffing Statistics

· Section 18: Business Units

2.2 The provisional budget guideline for the Education Service is £617.869m.

2.3 This report sets out the Education Executive Member's responses to the guidelines. The report:

· reviews the base budget which totals £608.279m

· identifies the impact of savings, including efficiency savings, of 1% (£5.281 million) and a further 0.5% (£2.640 million).

· identifies £1.991 million of pressures and costs absorbed

· identifies growth of £9.590 million from the passporting of the FSS (Formula Spending Share) increase in the Schools Block

· proposes the redeployment of £1.320 million of resources

· reviews the charges made by the Education service.

3 Revised Budget 2002/03

3.1 The last monitoring report to the Education Policy Review Committee indicated that expenditure for 2002/03 would be more than contained within the cash limit and a net underspending was forecast. This, together with the unused general and home to school transport contingencies, would then, subject to approval, be available to be carried forward to ease budget pressures in 2003/04.

3.2 Compilation of the revised budget has, largely, confirmed the earlier forecast apart from two significant exceptions. The discovery of asbestos within the heating system of teachers' accommodation in Fleet and Yateley required immediate remedial work to be undertaken at an estimated cost of £50,000. This has, however, been more than offset by further savings of £571,000 now being forecast on home to school transport following the re-assessment of transport requirements at the start of the new academic year. This brings the total home to school transport savings for 2002/03 to £706,000, of which £220,000 is due to a one-off over estimate of outstanding creditors in 2001/02.

3.3 In addition it is proposed that the Executive Member for Education be recommended to approve the following two virements to capital totalling £890,000:

(a) EOTAS £190,000 due to underspendings of £115,000 because of recruitment difficulties and additional income from Pupil Referral Grants of £75,000 to fund adaptations at the Bridge Centre (former Tankerville Special School).

(b) £700,000 from the unused contingency provisions to meet the Education Service's contribution to the rebuilding costs of St Bede School as required by the Cabinet.

3.4 The overall forecast position for 2002/03 is summarised below with detail of the cash limit construction and comparison with the revised budget appearing as Appendix 7.

	Variation from Cash Limit
	£'000	£'000
Home to school transport:		-706
Inclusion (SEN):
- mainstream statements	367
- out-county placements	-367
- inter-authority recoupment	193
- EOTAS	-190
	3
Virement to capital-Bridge Centre	190
		193
Other school centrally-held budgets: - premature retirements - interest on school balances - union and public duties/staff suspended from duty - local management contingency - teachers' housing	-160 -91 -30 -72 50
		-303
Youth Service Training and curriculum development Other variations		-150 -175 -13
		-1,154
Home to school transport contingency	-450
General contingency	-380
	-830
Virement to capital-St Bede School	700
		-130
Underspending against cash limit		-1,284

3.5 The Executive Member, Education is therefore being asked to recommend to the Cabinet that the total forecast underspending against the Education 2002/03 cash limit of £1,284,000 be carried forward to assist budgetary pressures in 2003/04 and 2004/05.

4 Base Budget 2003/04

4.1 A base budget has been prepared which reflects the current financial policies of the Council, in order to provide a starting point from which decisions can be made. The base budget for Education is £608.279m (see Appendix 1).

4.2 The principal changes in the base budget, compared with the 2002/03 original budget, are set out below. They are made up of two elements:

· variations with corresponding adjustments to budget limit (see para 4.3)

· service variations in 2003/04 (see para 5).

Variations with Corresponding Adjustments to Budget Limit

£1,852,000

4.3 The following variations are reflected in the 2003/04 base budget and the Education budget limit has been correspondingly adjusted:

	£'000
(a) The estimated pupil numbers for 2003/04, when compared with the estimates for 2002/03, show a decrease of 1,240 pupils in primary schools and an increase of 339 pupils in secondary schools. Teacher numbers have been adjusted in line with changes in pupil numbers, to maintain current funding policy levels for pupil/teacher ratios.	-366
(b) Full year effect of budget changes introduced in 2002/03 to meet budget targets, including one-off costs of replacing ICT legacy systems, expected cessation of sixth forms and former grant maintained schools' cash protection, and the termination of St Bede temporary school, offset by the full year cost of education for excluded pupils and early years and child care developments.	-651
(c) The revenue effect of capital schemes being completed in 2003/04 and the full year effect of those completed in 2002/03 (i.e. heat, light and cleaning costs of additional school accommodation)	156
(d) Variation in the number of school days affecting the level of expenditure on school catering and home to school transport.	-94
(e) Variations in the level of expenditure financed by Government grants determined after the County Council budget for 2002/03 had been approved:

	£'000
Teachers' pay threshold payments	4600
Early Years and Childcare	-1396
Other	-404	2,800

(g) Net inter-committee budget adjustments	7
	1,852

5 Service Variations in 2003/04

Home to School Transport

-£179,000

5.1 Despite recent inflationary increases the continuing success of `spend to save' initiatives, together with rigorous transport reviews and tight control on contracts, is estimated to result in home to school transport expenditure being £179,000 below its cash limit of £19.0 million for 2003/04. This reflects a continuation of the trend identified in 2002/03. It also means that the earmarked special contingency of £450,000 remains intact to cover any subsequent financial pressures in this area during 2003/04.

Inclusion (SEN)

+£130,000

5.2 The base budget reflects a continuation of the policy of developing specific `in-county' provision to meet the increasing demands from pupils with statements in mainstream schools. This approach is assessed to cost an additional £447,000 in 2003/04 which is being matched by savings in `out-county' placements in independent and voluntary sector establishments.

5.3 The net impact of inter-authority recoupment (the cost of Hampshire SEN pupils attending schools in neighbouring LEAs or reimbursement for pupils from other LEAs using Hampshire establishments) for special education is also expected to continue the trend identified last year leading to expenditure of £130,000 more than the 2003/04 budget limit.

Other School Centrally-held Budgets

-£103,000

5.4 The budgets managed centrally on behalf of schools (excluding home to school transport and pupils with special needs which have been dealt with separately) reflect a net saving of £103,000. This is due, mainly, to interest on school balances generating additional income of £90,000 as a result of a higher level of school balances.

Support Services

+£322,000

5.5 Support Services budgets continue to be managed carefully to cope with the pressure of Government initiatives and legislative changes. Despite the actions being taken to manage vacancies and other costs, the maintenance of support to front line services results in additional expenditure of £322,000 in 2003/04 over the budget limit of £24.2 million. Problems are particularly acute in the Inclusion Branch where increased staffing costs amounting to £160,000 are necessary to cover statutory casework for children with special educational needs. In addition, increased costs are being incurred in managing the development areas concerned with lifelong learning and social inclusion (£131,000) and in providing support for school improvement (£31,000).

Training and Curriculum Development (Standards Fund)

-£202,000

5.6 At the base budget level, which reflects a continuation of existing schemes, the number of allocations requiring County Council contributions is likely, as in 2002/03, to be less than expected, resulting in an estimated saving of £202,000 for 2003/04.

Other

-£39,000

5.7 Other minor variations in the base budget across the remainder of the service produce a net saving of £39,000.

6 Summary

6.1 The compilation of the base budget for 2003/04 has resulted in a net saving of £71,000 against the budget limit. At this stage it has been added to the general contingency increasing the provision from £350,000 to £421,000. The service variations are summarised below:

	£'000
Home to school transport (para 5.1)	-179
Inclusion (SEN) (paras 5.2/5.3)	+130
Other school centrally-held budgets (para 5.4)	-103
Support services (para 5.5)	+322
Training and curriculum development (para 5.6)	-202
Other (para 5.7)	-39
	-71
General contingency	+71
	-

7 Education Funding Changes 2003/04

7.1 A new Local Government funding system is being introduced from 2003/04 which changes Education funding and separates out the funding intended for school provision and that for LEA central functions. Members have received reports on these changes and the main activities in the two "Blocks": Schools and LEA, are summarised at Appendix 8.

7.2 The redistribution of funding between authorities resulting from the changes gives rise to winners and losers. To help to address this turbulence with the introduction of the new system, a mechanism of "floors and ceilings" has been implemented for 2003/04. Hampshire County Council's Education Formula Spending Share (EFSS), which covers both the LEA and the Schools Block, was set at the floor with per pupil increases of only 3.2% (the ceiling was set at an increase of 7% per pupil). However, pupil number changes for 2003/04, in particular the transfer into EFSS of the three year old grant and the move to universal provision for three year olds in 2004, have had the effect of raising the overall increase in EFSS to 5.9%. The formula changes are going to continue to have an impact over a number of years and the County Council's EFSS is likely to be set at the floor for 2004/05 at least. As such, although floors and ceilings for 2004/05 have not been announced, EFSS increases are likely to be around the floor in future years.

7.3 The Schools Block increase has been protected to some extent because of new powers in Section 42 of the Education Act 2002 which gives the Secretary of State a reserve power to set a minimum level of Schools Budget for a local authority. The DfES notified the County Council of its preliminary figure and asked for amendments to be notified by 3 January 2003. A number of discrepancies have been identified to them by the County Council. The final minimum Schools Budget notification is currently awaited from the DfES to which will be added the LSC funding for school sixth forms when that has been finalised. The County Council has calculated its Schools Budget assessment based on full passporting using local base budget adjustments. This is likely to result in a Schools Budget which at least equals, if not exceeds the DfES assessed minimum Schools Budget for 2003/04.

7.4 The reserve powers mentioned above only apply to the Schools Budget. The LEA central functions are therefore subject to the same budget strategy as other services of the County Council.

8 County Council Budget Strategy 2003/04

8.1 The priorities agreed by the Cabinet seek to passport, in full, the Schools Block increases. The budget guideline cash limit for the rest of the Education service is being restricted to the base budget level with County Council budget pressures to be met by redeployment within existing resources.

8.2 Notwithstanding the priority being given to passporting the Schools Block in full, the Cabinet has requested Executive Members to identify the impact of further savings and reductions in services of 1% and 1.5%.

9 Schools Budget Proposals 2003/04

9.1 The County Council-assessed figure for the Hampshire Schools Budget for 2003/04, with full passporting, totals £521.305 million and this is the figure that it is proposed to notify to the Secretary of State on 31 January 2003. This total sum incorporates all expenditure on the Schools Block including funds managed on behalf of schools by Policy and Resources e.g. repairs and maintenance of buildings and capital expenditure met from revenue. In the original budget for 2002/03 these elements totalled £17.120 million. The estimated requirement for 2003/04 (including provision for future inflation) is £17.783 million which reduces the effective sum available to £503.522 million. The cost of continuing the existing provision into 2003/04 amounts to £474.461 million, with a further £19.471 million being required to cover future inflation (based on 3.5% for all pay and 2.5% for prices). Taking this into account a sum of £9.590 million remains to cover inescapable commitments and service developments. This is summarised as follows:

	£'000	£'000
County Council Schools Budget Assessment 2003/04		521,305
Less items managed by Policy and Resources		17,783
		503,522
Base Budget (continuing provision) 2003/04	474,461
Provision for future inflation	19,471
		493,932
Balance Available		9,590

9.2 Proposals have been influenced significantly by changes in the way Government has allocated resources through the new funding system and specific grants and by discussion at two meetings of the new Schools Forum. This statutory, non-executive group of over thirty representative headteachers, governors, dioceses, teacher associations, early education and childcare partnership groups set up under the Education Act 2002 provides advice on the funding and supply of services to schools and early years providers.

9.3 At its meeting on 10 January the Schools Forum identified a number of priority areas with supporting arguments and these are listed in paras 9.4 to 9.12. The major influence on schools' budgets continues to be teacher retention and recruitment. Teacher pay scales including the additional allowances are increasingly being used by governing bodies creatively to retain staff especially in subject areas where there is a shortage of applicants. A similar impact is increasingly happening with other staffing costs. This drives up costs which, when linked with the knock on effect on recruitment and advertising costs, means that budget increases which allow for pay award inflation only are insufficient to keep pace with the overall cost increases experienced by school governing bodies. At the Schools Forum meeting on 10 January 2003 one secondary headteacher noted that staffing costs in his school had risen by 8% last year because of these pressures.

Continuation of Existing Provision £412,000

9.4 Before considering priorities there are five inescapable pressures that have to be funded, partially offset by savings from match funding in respect of Standards Fund allocations that have ceased or have been reduced:

£'000

· former GM school cash protection 300

· sixth form cash protection 250

· St Bede temporary school hire 50

· change in the Standards Fund grant rate from 52% to 50% 413

· savings from match funding where Standards Fund

allocations have ceased or been reduced -601

Standards Fund: maintaining current provision £5,795,000

9.5 For 2003/04 the DfES has announced that it will cease grants totalling £6.6m. The DfES argue that the overall EFSS increase allows for these grants to be taken into Schools Block funding. The view of the Schools Forum was that priority be given to maintain the current level of funding for those Standards Funds ceased by Government from April 2003 and critical to the County Council's agreed strategy on school improvement and social inclusion. The proposals on the allocation methodology are recommendations from the Schools Forum. To reinstate the School Improvement, and the Induction of Newly Qualified Teachers grants will require £1,938,000 and £1,044,000 respectively. The school improvement funding will be allocated through the existing LMS formula whilst schools are currently being consulted on a change to the LMS scheme to allow funding to follow NQTs. The replacement of the recruitment and retention grant will cost £1,885,000 and it is proposed to allocate through the school budget share staffing methodology with its tried and tested weightings towards pupil numbers and allowance for small schools, and special educational needs.

The Social Inclusion (Pupil Retention Grant) will require £1,370,000 in total. The current allocation mechanism cannot be replicated in the LMS formula so it is proposed to allocate EOTAS £500,000 towards the estimated additional cost of providing education for pupils excluded from mainstream schools, with the balance of £870,000 (comprising £715,000 to replace the Pupil Retention Grant and £155,000 being a redistribution within existing resources) allocated to secondary school budget shares through the SEN Audit (Step 2 and Step 3) methodology. A recent consultation with secondary school governing bodies supported the concentration on steps 2 and 3 following a change to the SEN Code of Practice in January 2002.

Separate is the LEA initiatives element of the Pupil Retention Grant which also comes within the Schools Block. This is concerned with the Behaviour Support projects, particularly in the primary phase and £213,000 is needed to continue with those projects.

Standards Funds: increasing provision £1,338,000

9.6 There are four Standards Funds grants, within the Schools Block, which increase significantly in 2003/04.

9.7 National literacy and numeracy (primary) strategy and Key Stage 3 strategy are a modification of current grants. However, the sums involved have changed and require an additional £806,000 to fund the County Council's allocation from the Schools Block. The Schools Forum view was that this should be a priority as both provide funding to critical elements of the raising standards agenda agreed previously.

9.8 Two are new: one is at 50% and entitled "vulnerable children". It replaces four separate grants for sick children and children in public care; teenage pregnancy; traveller children achievement and asylum seekers. The grant objective is to secure improved access to education for vulnerable children, in particular to provide high quality education for those unable to attend school or whose circumstances make it difficult for them to do so; to support attendance, integration or reintegration into school; and to provide additional educational support to enable vulnerable children to achieve their full potential. The DfES allocation criteria state that this grant is not to be devolved to schools but should be based on local needs so as to provide coherent support across the vulnerable groups. In 2002/03 the total of the four separate grants is £374,000. In 2003/04 the new grant allocation is £1,435,000 and to take it up in full would require an extra £532,000 contribution from the Schools Budget. The Schools Forum recommend that the full grant be taken up, requiring a County Council contribution of £532,000.

The other new Standards Fund is a 100% grant and entitled "Support Staff Training and Development". The DfES suggest that at least 50% must be devolved to schools. The Schools Forum agreed that the management of this new Fund (£799,000) be determined through the current management partnership arrangements, also involving headteacher, governor and staff associations representatives and the outcome be reported back to the Schools Forum.

Early Years, Behaviour Support and Portage £465,000

9.9 A further priority relates to activities within the Schools Block that support early years and childcare. Specifically they are to do with early intervention and behaviour intervention. Investing in children and families prior to the start of the formal school education programme is acknowledged as a key contributor to pupil attainment. Within the Early Years Childcare Development Plan a priority has been highlighted to allocate additional resources for early years provision: specifically to allow increases in special educational needs co-ordinators support to practitioners in the non-maintained sector. Allocating an additional £165,000, rising to £283,000 in 2004/05, will increase county wide coverage from 60% to 100%.

9.10 The year-on-year development of the behaviour support service has reinforced the positive benefits to schools and pupils of this service. An increase of £200,000 will enable provision to extend to the Havant area. Currently provision exists in Rushmoor and East Hampshire; Fareham and Gosport; Basingstoke and Hart and Andover. Winchester and Eastleigh (2005); and the New Forest and Romsey (2006) areas are scheduled for future years in the Behaviour Support Plan 2002-2007, subject to resourcing.

9.11 The Portage home visiting service for pre-school children who have special needs is facing increasing demand and some loss of grant due to funding and accommodation changes. An additional £100,000 is proposed to help address some of the pressures and strengthen the staffing support to home visits.

Schools budget shares £1,580,000

9.12 The Schools Forum also identified two further areas focusing on supporting costs already being incurred by schools: the elimination of the differential between special schools funding for primary and secondary moderate learning difficulty pupils and assistance towards the continuing teacher retention and recruitment challenges. The Forum proposed that a start be made to reducing the differential by allocating £160,000 (reducing the differential in full would cost £490,000) and that £1,420,000 be allocated to the teacher staffing element of all school budget shares (this represents a 0.4% increase on that element). At the same time the Schools Forum recognised that any increase in teachers' pay above the 3.5% allowed would need to be a first call on these growth proposals.

9.13 No additional provision is proposed for exclusions and SEN Out-County Placements beyond the measures identified in para 9.5 above to replace the Pupil Retention Grant loss. The base budget has allowed for funding of 265 exclusions compared to 229 in 2001/02 and budget proposals for 2003/04 increase the number of local Behaviour Support Teams. The Schools Forum acknowledged that any overspend will have to be carried forward into 2004/05 and be a first call on that year's budget plan.

Savings of 1% and 1.5%

9.14 Savings targets of 1% and 1.5% reduction in school budget allocations are summarised in Appendix 2 (a). Savings of up to 1.5% (£7,117,000) would be achieved by not implementing the funding proposed by the Schools Forum and would force reductions in the support to school improvement, newly qualified teachers, behaviour, pupil retention and staff recruitment and retention. This would impact directly and quickly upon schools' ability to achieve performance targets at all Key Stages; upon the County Council's ability to achieve targets on pupil attendance through the provision of early years and behaviour intervention support; and targets agreed in the Public Service Agreement for achievement by 2004.

10 Redeployment and Savings Proposals 2003/04: LEA Block

10.1 The budget proposals set out below identify the service pressures and developments for the LEA budget for 2003/04 and propose the necessary redeployments to achieve these (summarised in Appendix 3 (b)).

Standards Fund: maintaining current service provision £585,000

10.2 Changes to the way Government has allocated resources are referred to in para 7. One specific impact influencing redeployment proposals has been the ceasing of Standards Funds already referred to in paragraph 9.5. An allocation of £399,000 will reinstate the grant losses and enable current provision to continue on previously identified strategic priorities: school improvement (£342,000) and induction of newly qualified teachers (£57,000). In addition, the Government has reduced its percentage contribution to Standards Fund Grants requiring the County Council to add £78,000 to its share for the total allocations to remain at current levels. Other existing Standards Funds have increased and to support these additional allocations the County Council has to match fund £108,000.

Education Welfare: maintaining current service provision £90,000

10.4 An additional £90,000 is needed to continue the three posts funded currently from a one-year pump-priming Public Service Agreement priority in the Gosport area. Not to continue the funding would jeopardise the achievement of the stretched target for pupil attendance at schools in the area and therefore the allocation of additional new money in April 2005 through the Public Service Agreement.

School Improvement £90,000

10.5 Assessment at the Foundation Stage in a pupil's education is an important component of raising pupil attainment levels. In 2003 moderation for the Foundation Stage profile will be a statutory requirement. The County Council will have to train and enable moderators to carry out the work. Taken alongside maintaining the associate school improver scheme and more general performance monitoring changes in school improvement activities, an additional £90,000 is needed.

Managing Surplus Places £40,000

10.6 Better matching facilities to meet community needs has been key in both the education and corporate strategy and is being enhanced through local strategic partnership activities. Critical to this process has been the maximisation of opportunities to invest in early years and "inclusion" facilities, such as provision for pupils with emotional and behavioural difficulties and language impaired provision on school sites, as pupil numbers decline. With pupil numbers projected to fall over the next few years the potential for releasing resources by managing surplus place removal has never been greater and an allocation of £40,000 is proposed to facilitate the local consultation processes.

Parent Partnership £45,000

10.7 Similarly the demand on the successful Parent Partnership service is increasing with the service having to extend to cover the provision of advice and information for the parents of any child with special educational needs. Early advice helps reduce the likelihood of involving SEN tribunals, which are costly in time and money. Annual referrals to the service now exceed 2000 and the ratio of referrals to total full-time equivalent staff in Hampshire is 443 compared to our Ofsted statistical neighbours' 130. An additional £45,000 will enable staffing levels to be enhanced.

One off items: ICT and Agreed Syllabus £470,000

10.8 Finally a number of one-off funding demands need to be considered. An element of the underspend in 2002/03 is due to delay in completing a number of ICT projects. Funding of £400,000 will be needed in 2003/04 to replace outdated systems, as previously agreed. The Agreed Syllabus for Religious Education has to be revised in 2003/04 at a cost of £20,000. The completion of the corporate Pay and Benefits project in Education will require a further £50,000.

10.9 In total the redeployment proposals set out in paras 10.2 to 10.8 amount to £1,320,000. It is proposed to fund these by using £867,000 of the carry forward, if approved, from 2002/03 and by reducing the contingency provision for Home to School Transport and the general contingency by £453,000. A summary of the proposals is set out in Appendix 3 (b).

Savings of 1% and 1.5%

10.10 Savings targets of 1% and 1.5% reduction in service provision equate to £536,000 and £804,000 and are summarised in Appendix 2 (b). Achieving them is based on a strategy of reducing all provision to the statutory minimum level for Home to School Transport, by reducing provision for teachers' early retirement, by eliminating all contingency funding and by reduction in front line services as staff vacancies arise.

10.11 The impact on Home to School Transport would affect only provision for new pupils who would have been eligible for transport to denominational schools in September 2003 (£65,000), post-16 transport for pupils of families living on income support (£40,000) and support for out of school activities (£72,000). Post-16 transport, although not statutory, has been given a prominence in the 14 - 19 Green Paper with the emphasis on progression and retention post-16. The Education Act 2002 requires the LEA to produce a post-16 transport plan. Support for out-of-school activities for secondary schools with rural areas in their catchment was a policy introduced in recognition of the disadvantages they faced compared to urban area schools.

10.12 Reducing the budget provision for teachers' early retirements by £100,000 would eliminate any scope for approving requests in excess of the numbers approved over the past three years.

10.13 Eliminating contingencies £259,000 at 1% and a further £159,000 reach the 1.5% target, carries with it the risk that any overspend will fall on the next year's budget which will also have to budget for the additional demand which led to the overspend.

10.14 Savings through staff vacancy management of £109,000 are proposed which would impact on frontline services as staff vacancies arise.

11 Summary

11.1 The distribution of resources available for 2003/04 is summarised below with further detail appearing in Appendices 2 and 3:

	Schools Block £'000	LEA Block £'000
Resource Availability
Balance available from passporting	9,590	-
Resources available for redeployment	-	1,320
	9,590	1,320
Priority Budget Pressures/Developments
Continuation of existing provision
- cash protection/St Bede temporary school	600	-
- Standards Fund variations	-188	78
Standards Fund Changes
- maintaining provision for ceased grants	5,795	399
- increasing provision	1,338	108
Early Years Behaviour Support and Portage	465	-
Special Schools - additional provision for MLD pupils	160	-
School budget shares - staffing cost pressures	1,420	-
Education Welfare - maintaining current provision	-	90
School Improvement Surplus Place Management and Parent Partnership	-	175
ICT, Pay and Benefits Project and Agreed Syllabus (one-off items)	-	470
	9,590	1,320

12 Effect on Schools' budgets 2003/04

12.1 If approved, the Schools Budget will increase by 6.2% in cash terms which incorporates:

· Variations in pupil numbers

· The revenue effect of the capital programme

· Inflation to outturn (equivalent to 3.5% for teachers' and other pay, 2.5% for prices plus increases in teachers' and local government pensions increases and an increase in National Insurance)

· Sixth form and exGM cash protection

· Replacement of terminated Standards Funds grants

· Additional funding in schools' budget shares

· Increased County Council contribution to enhanced Standards Funds

· Early years and child care

· Behaviour Intervention service

· Portage service

12.2 The various aspects are summarised below:

	£m	%
Current Expenditure Schools Block 2002/03 (excluding government grants)	448.3
Add Teachers Pension Increase 4.75%	12.1
Grants transferred to EFSS	13.7
Adjusted 2002/03 Schools Block	474.1
Full year effect of 2002/03 inflation	1.1
Full year effect of 2002/03 budget proposals	-0.6
Revenue effect of capital programme	0.2
Pupil number variation/pupil days	-0.3
Provision for future inflation	19.4
	493.9	4.2
Growth proposals (Appendix 3 (a))	9.6
	503.5	6.2

12.3 In addition to County Council funding through FSS, schools are to receive increases from the Government in direct funding through:

· The Schools Standards Grant which increases by 20% nationally; for Hampshire this equates to some £3m. The release of this money is linked to agreement on workforce reforms,

· Devolved capital with increases from £9.118m in 2002/03 to £14.32m in 2003/04 (57%).

12.4 Further work and consideration is required on the DfES proposal for three year indicative budgets for schools. This will be progressed in conjunction with the Policy Review Committee and the Schools Forum once all the information is available from DfES (notably future years' floors and ceilings) to enable comparison with the current future year budget modelling information available to Hampshire schools.

13 Efficiency Improvements: Education Services

13.1 All Executive Members are required to identify efficiency improvements achieved in absorbing pressures and costs within the budget guidelines.

13.2 Delivering efficiency savings whilst retaining and recruiting quality staff continues to be difficult and successive Workforce Plans have highlighted this. This report, in Sections 9 and 10, sets out the real pressures schools and services supporting the County Council's strategic priorities, are facing. In addition, steps continue to be taken to minimise cost increases on home to school transport and SEN: two areas which together represent nearly 50% of the expenditure in the LEA Block.

13.3 As well as the demand led budgets, other pressures including increased demands on monitoring and support to schools have been absorbed. Enhanced support to Community Planning and the local Public Service Agreement has been necessary, funded by reprioritising existing work arrangements. The first monitoring report is due in the Spring as part of the overall co-ordination led by the Chief Executive. Similarly the demands for more focused information both to assist management decision making processes at school and departmental levels and to effectively monitor and evaluate outcomes have been absorbed. Across all services a share of the cost of staff salary increments and other inflation impacts have been absorbed as set out in Appendix 2.

14 Review of charges

14.1 All sources of income generated by the Education Service have been reviewed to ensure that charges are set at the appropriate level. An analysis of charges is set out in Appendix 4.

14.2 Charges are amended annually in line with the review of prices set out in the plans of each business unit providing services to schools and the wider community. As the majority of such charges are made to schools there is limited scope for generating additional income to the County Council. Schools continue to be encouraged to maximise income through the letting of facilities to the community and outside organisations. Decisions on the level of charges will take account of availability, demand and market rates.

15 Other Expenditure

15.1 The budget includes some items which are not counted against the cash limit. This includes budgets for central departments' support services, except where they have been given to departments to buy services, and repair and maintenance of buildings. It also includes costs of member support within the Education budget which are rechargeable to the Policy and Resources budget for corporate and democratic core services. These have been excluded at this stage as the budgets are subject to Policy and Resources Executive Member's control and they have not yet been agreed. In the original budget they totalled £13.6 million.

16 Mandatory Awards

16.1 The budget for mandatory awards for 2003/04 totals £1.689 million. Apart from awards to disabled students the County Council has not had any financial responsibility for new students since September 1999. As mandatory awards are 100% grant aided this change in responsibility has had no effect on the County Council's finances.

17 Staffing Statistics

17.1 The average number of staff in the 2003/04 base budget is 14,254. This compares with the original estimate for 2002/03 of 14,155 which is an increase of 99, reflecting significant increases in Youth Service staff (91) as part of the Connexions initiative together with additional Early Years and Childcare staff funded from Government grants, offset by variations and teaching numbers in line with changes in pupil numbers.

17.2 Proposals relating to new growth and redeployment of resources (Appendix 3) would increase staffing numbers by 19, whilst savings proposals (Appendix) would reduce staffing numbers by 4.

18 Business Units

18.1 The services to schools business units operate under Management Partnership on a trading basis and have Financial Regulation 20 status, enabling them to carry forward planned surpluses or deficits. A number of the business units are planning to utilise some of their accumulated surpluses to fund developments in 2003/04 while others will need to increase charges to bridge the gap. Consequently, the proposed budget, reflects a net deficit of £182,000 (on gross expenditure of £23.1 million). The net deficit will be charged against the reserves reducing the estimated cumulative surplus at 31 March 2004 to £365,000. A summarised trading account for the eight business units is shown at Appendix 6.

Section 100 D - Local Government Act 1972 - background papers

The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.

NB the list excludes:

1. Published works.

2. Documents which disclose exempt or confidential information as defined in the Act.

TITLE FILE

None

Appendix 1

Education Service

Revenue Budget 2003/04

Calculation of Base Budget 2003/04 - Summary of Cash Limited Expenditure

The following table shows the progression from the original budget for 2002/03 which was prepared at outturn prices 2002/03 to the base budget for 2003/04 (at outturn prices in 2003/04)

	£'000	£'000
Original budget 2002/03 at outturn prices Transfers to/from other committees (mainly repair and maintenance delegated to schools)		578,822 -7,190
= Adjusted Original Budget		571,632
Increase for inflation to November 2002 prices (see Annex 2) - full year effect of pay awards increases in teachers' pensions and business rate adjustments - excess over the inflation allowance	13,734 268	14,002
		585,634
Other variations (see Annex 3)
- reductions necessary to cover for excess inflation		-268
- variation in pupil numbers		-366
- effect of budget changes in previous years		-651
- variations in expenditure financed by Government grants		2,800
- revenue effects of capital programme		156
- variations in number of school days		-94
- inter-committee adjustments		7
		587,218
Allocation for future inflation		21,061
Base Budget 2003/04 at outturn prices		608,279

Annex 1 to Appendix 1

Education Service

Calculation of Base Budget 2003/04

Parameters used in the Compilation

1. Definitions

1.1 The first stage in the construction of the budget for 2003/04 is the preparation of a base budget. The rules used this year are similar to those used in 2002/03 which are summarised below.

1.2 The 2003/04 base budget is defined as the current year's budget adjusted for:

· allocations made for inflation in 2002/03 including the full year effect of the provision made for pay awards in 2002/03

· exclusion of expenditure included in the 2002/03 budget which was financed by the carry forward of planned underspendings from 2001/02, the one-off use of reserves or balances, or which was approved on a non-recurring basis

· the revenue effect of past capital programmes, subject to its inclusion in the approved capital programme

· the full year effect of council-approved policies included in the current year's original budget, which have been introduced part-way through the year

· correction of arithmetical errors in the current year's budget

· the following specific items:

* variations arising directly from changes in the number of pupils in schools and the number of days in the school year

* variations in expenditure financed from Government grants

Annex 2 to Appendix 1

Education Service

Calculation of Base Budget 2003/04

Significant costs of inflation

1. Variation between the actual cost of inflation in 2001/02 and the provision for inflation included in the 2002/03 budget:

	£'000	£'000
Additional costs of inflation Less		14,002
- 4.75% increase in teachers' pensions	12,392
- full year effect of pay awards during 2002/03	1,244
- variations in business rates	98	13,734
= shortfall in the provision		268

2. Significant costs of inflation between 2002/03 outturn prices and November 2002 prices.

2.1 Pay awards £'000

Provision was originally made in 2002/03 for pay awards of 4%

to teachers and for other pay (the latter including provision to aid recruitment and retention). The additional cost in 2003/04 of the

pay awards agreed in 2002/03 together with the increase in teachers' pensions employers contributions is: 13,483

The pay awards agreed are:

Negotiating body	Effective date		%
Teachers	April 2002		4.3
APT & C Staff/Manual Workers	April 2002	4.1
Soulbury Staff	September 2002	3.5

2.2 Non-pay inflation £'000

Provision was originally made in 2002/03 for price increases of

2.5%. The additional cost of price increases other than pay, and

net of income is

519

The most significant non-pay variations from the 2.5% assumption made in the budget are as follows:

	Outturn 2002/03 November 2002 %	Cost in 2003/04 £'000
Electricity	-8.4	-127
Gas	-2.5	-47
Rates *	1.3	98
Fuel oil	4.0	37
Maintenance of grounds	4.3	172
Car allowances	-3.5	-41
Home to school transport	1.8	283
School catering contract	1.0	55
Payments to other local authorities	4.3	98
Income (average)	-0.2	-51
* subject to adjustment to the cash limit

3 Allocation for future inflation in 2003/04

	£'000
Provision for pay awards to non teaching staff of 3.5% in 2003/04	2,842
Provision for pay awards to teachers of 3.5% in 2003/04	11,570
Increase in teachers' employers' pension contributions	1,044
Increase in local government employers' pension contributions	311
Increase in national insurance contributions	2,669
Provision for non-pay inflation at 2.5%	4,264
Allowance for increased income	-1,639
Total allocation for future inflation	21,061

Annex 3 to Appendix 1

Education Service

Calculation of Base Budget 2003/04

Significant Variations

Major variations between the repriced budget 2002/03 and the base budget for 2003/04 (at November 2002 prices) contributing to the increase of £1,584,000 are set out below:

Variations Against the 2002/03 Repriced Budget
	£'000	%
Net reduction in response to changes in pupil numbers	-366	-0.1
Full year effect of budget changes introduced in 2002/03	-651	-0.2
Revenue costs of capital programme	156	0.5
Variation in the number of school days	-94	-0.4
Variations in the level of expenditure financed by government grants	2,800	-
Shortfall in inflation allocation	-268	-
Net variations in expenditure on home to school transport	-179	-0.9
Inclusion (SEN) - inter-authority recoupment	130	3.2
Other school centrally-held budgets	-103	-0.5
Support Services (mainly Inclusion Branch)	322	1.3
Training and Curriculum Development (Standards Fund)	-202	-0.5
Addition to general contingency	71	-

Annex 4 to Appendix 1

Base Budget 2003/04

Analysis of Variations

	(1) Adjusted original budget 2002/03 £'000	(2) Variation in inflation to November 2002 prices £'000	%	(3) Other Variations £'000	%	(4) Inflation allocation to 2003/04 outturn £'000	(5) 2003/04 Base budget £'000
Cash Limited expenditure Individual schools budget
Primary	214,697	6,296	2.9	1,374	0.6		222,367
Secondary	188,255	6,210	3.3	792	0.4		195,257
Special	21,198	467	2.2	-93	-0.4		21,572
Strategic management	5,379	-13	-0.2	-423	-7.9		4,943
Specific grants	12,570	127	1.0	759	6.0		13,456
Special education
Education otherwise than at School	5,399	142	2.6	56	1.0		5,597
Other special education	10,604	24	0.2	-50	-0.5		10,578
School improvement	106	1	0.9	-	-		107
Access
School catering	243	8	3.3	-40	-16.5		211
Other access	18,565	269	1.4	-551	-3.0		18,283
Non local schools budget	634	21	3.3	111	17.5		766
Nursery education	19,753	12	0.1	-842	-4.3		18,923
Adult education	150	-	-	-	-		150
Other continuing education	921	2	0.2	119	12.9		1,042
Youth service	4,156	92	2.2	1	0.0		4,249
Community education	1,820	-	-	-	-		1,820
Support services	23,671	334	1.4	520	2.2		24,525
Training and curriculum development	42,711	10	0.0	-220	-0.5		42,501
General contingency	800	-	-	71	-		871
Inflation allocation to outturn	-	-	-	-	-	21,061	21,061
Total base budget	571,632	14,002	2.4	1,584	0.3	21,061	608,279
Mandatory awards	422	-	-	1,267	-	-	1,689
Capital charges	-	-	-	-	-	-	-
Income/expenditure transferred
(to)/from reserves	234	-	-	-52	-	-	182
Total net expenditure before grant	572,288	14,002	2.4	2,799	0.5	21061	610,150
Specific government grants
Standards Fund	30,611	-	-	-3,724	-12.2	-	26,887
Nursery Education Grant	10,223	-	-	-10,223	-100.0	-	-
Childcare Strategy Grant	5,631	-	-	-1,395	-24.8	-	4,236
Special Education Grants	14,994	-	-	-116	-0.8	-	14,878
Teachers Pay Reform Grant	8,400	-	-	4,600	54.8	-	13,000
Student Awards	412	-	-	1,267	307.5	-	1,679
European Social Fund	132	-	-	-21	-15.9	-	111
School Access Fund	-	-	-	25	-	-	25
Total net expenditure	501,885	14,002	2.8	12,386	2.5	21,061	549,334

Appendix 2 (a)

Education Service

Revenue Budget 2003/04

Proposals for Efficiency Improvements and for Savings - Schools Block

	2003/04 £'000	2004/05 £'000	Staffing (FTEs) 2003/04 2004/05
1. Savings to Achieve 1% Reduction
Reduce growth proposals -
Schools' budget shares -
- staffing cost pressures	-1,420	-1,352
- special schools-additional provision for MLD pupils	-160	-320	-	-
Portage Service	-100	-100	-	-
Behaviour Intervention Service	-200	-200	-	-
Early Years and childcare	-165	-283	-	-
Provision for recruitment and Retention in schools budget shares	-1,885	-1,885	-	-
Replacement of terminated Standards Fund grants	-815	-605	-	-
	-4,745	4,745	-	-
2. Further Savings of 0.5%
Replacement of terminated Standards Fund grants	-2,372	-2,372	-	-
1.5% savings	7,117	7,117	-	-
3. Cost Increases Absorbed Net cost of staff increments	1,634	1,634	-	-
Excess costs of inflation	53	53	-	-
	1,687	1,687	-	-

Appendix 2 (b)

Education Service

Revenue Budget 2003/04

Proposals for Efficiency Improvements and for Savings - LEA Block

	2003/04 £'000	2004/05 £'000	Staffing (FTEs) 2003/04 2004/05
1. Savings to Achieve 1% Reduction Home to School Transport
- cease denominational transport	-65	-130	-	-
- cease Post-16 transport	-40	-80	-	-
- out of school activities	-72	-72	-	-
Reduce provision for teachers early retirements	-100	-100	-	-
Reduce home to school transport contingency provision	-100	-100	-	-
Reduce LEA Block contingency provision	-159	-54	-	-
	-536	-536	-	-
2. Further savings of 0.5% Eliminate home to school transport provision	-100	-100	-	-
Eliminate/reduce LEA Block contingency provision	-59	-168	-	-
Staff vacancy management	-109	-	-4	-
1.5% Savings	-804	-804	-4	-
3. Cost Increases Absorbed
Net cost of staff increments	89	89	-	-
Excess costs of inflation	215	215	-	-
	304	304	-	-

Appendix 3 (a)

Education Service

Revenue Budget 2003/04

Proposals for New Growth and Redeployment of Resources - Schools Block

	2003/04 £'000	2004/05 £'000	Staffing (FTEs) 2003/04 2004/05
Continuing provision for: - cash protection-sixth forms	250	390	-	-
- former GM schools	300	-	-	-
- St Bede temporary school	50	-	-	-
Standards Fund Changes
- replacement of terminated grants	3,910	3,910	-	-
- reduction in grant percentage	413	413	-	-
- matched funding on ceased/reduced grants	-601	-601	-	-
- additional allocations requiring increased County Council contribution	1,338	1,338	-	-
- Provision for recruitment and retention in schools' budget shares	1,885	1,885	-	-
Early Years and Childcare	165	283	5	9
Behaviour Intervention Service	200	200	7	7
Portage Service Schools' Budget shares	100	100	2	2
- special schools addition provision for MLD pupils	160	320	-	-
- additional provision for staff cost pressures	1,420	1,352	-	-
Total increase allowed in the budget guidelines	9,590	9,590	14	18

Appendix 3 (b)

Education Service

Revenue Budget 2003/04

Proposals for New Growth and Redeployment of Resources - LEA Block

	2003/04 £'000	2004/05 £'000	Staffing (FTEs) 2003/04 2004/05
Priority Budget Pressures
Standards Fund changes
- replacement of ceased grants	399	399	-	-
- reduction in grant percentage	78	78	-	-
- additional allocations requiring increased County Council contribution	108	108	3	3
Continuation of EWO posts to support Public Service Agreements	90	90	-	-
School improvement initiatives	90	90	-	-
Effective school place planning	40	40	1	1
Parent Partnership - increased demand	45	45	1	1
ICT replacement of legacy
Systems	400	-	-	-
Agreed syllabus changes - Religious Education	20	-	-	-
Pay and benefits project-additional support for EPS	50	-	-	-
	1320	850	5	5
Redeployment of Resources
Carry forward of 2002/03 underspending	-867	-417	-	-
Reduce home to school transport contingency provision	-250	-250	-	-
Reduce LEA Block general contingency provision	-203	-183	-	-
	-1320	-850	-	-

Appendix 4

Education Service

Revenue Budget 2003/04

Review of Income

		Budget 2003/04	Current charge	Date of last review	Planned date for next review (where applic.)	Comment
		£'000	£
	Charges
1.	Mandatory/National charges
	Inter-authority recoupment	1943	Full cost	01/04/02	01/04/03	Annually calculated to national regulations
2.	Discretionary charges
	School Meals at Education Centres	52	1.40	01/09/02	01/09/03	Reviewed per the terms of the agreed contract
	Rents	110	Various	01/09/02	01/09/03	Annual rent review by PBR&S (Estates Practice)
		Budget 2003/04	Current charge	Date of last review	Planned date for next review (where applic.)	Comment
		£'000	£
-	Education Psychology Service	160	Full cost	01/04/02	01/04/03	External Income, 4-5 Contracts annually reviewed
-	Outdoor Education (Recharge to OLA's)	52	Full cost (SLA)	01/04/02	01/04/03	Contribution towards cost of service
-	Privileged Transport	173	275.00 (inc. VAT)	01/09/02	01/09/03	Administered by the Passenger Transport Group. Increase is based on the general Retail Price Index in April
	Contributions from OLAs/ Health Authorities - Youth Service	203	n/a	01/09/02	01/09/03	Projects or partnerships jointly funded. Reviewed at revised estimate stage after management reports from districts received.
	Other
-	Guidance and Careers Service	183	n/a	n/a	n/a	Profit sharing agreed annually with Vosper Thorneycroft Southern Careers
3.	Services provided free where charges could be made	Nil
	Total Income	2876

Appendix 6

Education Service

Revenue Budget 2003/04

Services to Schools Business Units - Summarised Trading Account

	2003/04 Estimate £'000
Income
Schools - MP Subscription	7,083
- Ad hoc (including Post 16/other LEAs)	7,238
Centrally Funded	6,054
Government Reimbursements including OFSTED	164
Standards Fund	2,391
	22,930
Expenditure
Employees	14,353
Premises	332
Transport	593
Supplies and Services	4,898
Support Services	2,936
	23,112
Deficit for the Year	-182
Less estimated surplus brought forward 1/4/03	547
Total Reserves as at 31 March 2004	365

The above summary includes the eight education business units: Inspection and Advice, Personnel, Music, Finance, Governor Services, ICT, Minstead Study Centre and Stubbington Study Centre.

Appendix 7

Education Service

Revised Budget 2002/03

Calculation of the Cash Limit for the Revised Budget 2002/03

The following table shows the progression from the original budget for 2002/03 to the cash limit for the revised budget 2002/03. Both are at estimated outturn prices 2002/03.

	£'000	£'000
Original budget 2002/03		578,822
Transfers between committees		842
= Adjusted Original Budget		579,664
Inflation variations:
- business rate adjustments		76
		579,740
Other variations
- 50% of 2001/02 underspending brought forward		30
- County Council contribution to Standards Fund schemes brought forward		777
- Virement to capital (subject to Executive Member approval)		-940
- variation in expenditure financed by government grants:
Teachers' pay threshold payments	4,600
Standards Fund	6,540
Early Years and Childcare	-2,187
Public Service Agreements	985
Other	-75
		9,863
		589,470
Planned savings carried forward to 2003/04		-1,284
Cash Limit for the Revised Budget 2002/03		588,186

Annex 1 to Appendix 7

Education Service

Revised Budget 2002/03

Summary comparing the Revised Budget with the Cash Limit

	Cash Limit £'000	Revised Budget £'000	Variation £'000
Local Schools Budget
Individual schools budget
Primary	217,685	217,685	-
Secondary	191,824	191,824	-
Special	21,380	21,380	-
Strategic management of schools	6,451	6,067	-384
Specific grants (excluding Standards Fund)	18,041	18,041	-
Special education -
Education otherwise than at school	5254	5157	-97
Mainstream statements/out-county Placements	10,695	10,695	-
School improvement	106	106	-
Access
School catering	227	215	-12
Other (mainly home to school Transport)	18,565	18,019	-546
Other
Non-local schools budget (recoupment)	633	826	193
Nursery education	16,975	16,975	-
Adult education	150	150	-
Other continuing education	946	933	-13
Youth service	4,143	3,993	-150
Community education	1,820	1,820	-
Services to schools and support	24,424	24,454	30
Training and curriculum development	50,021	49,846	-175
Contingency provision	130	-	-130
	589,470	588,186	-1284
Planned savings carried forward to 2003/04	-1284	-	1284
Net cash limited expenditure 2002/03	588,186	588,186	-

Appendix 8

LEA BUDGET 2002/03 SCHOOLS BUDGET
Strategic Management
Central administration, including planning and essential financial and personnel functions	Contingencies
Insurance (some)	Insurance (some)
Premature retirement, redundancy and dismissal costs (Note 1)	Library and museum services for schools
	Licence fees/subscriptions
	Supply cover (Note 2)
Special Educational Provision
Educational psychology: statutory SEN assessments and statementing: SEN parent partnerships: monitoring of SEN provision and promotion of good SEN practice	Most SEN expenditure not shown opposite Fees for pupils at non-maintained and independent schools (SEN)
Behaviour support plan preparation	Behaviour Support Plan Implementation
Child protection: collaboration with health services	Out-of-school education, including pupil referral units
School Improvement
School Improvement (EDP)
Access to Education
Asset management
Planning the supply of school places (Ed and PBRS)
Education Welfare/school attendance	School Admissions administration, including appeals
Pupil support (clothing grants etc)
Home to school transport
Music services; other arts; outdoor education centres
Items outside the present LSB
FHE student support	Nursery education (Note 3)
Further (including adult) Education provision	Inter-authority recoupment payments
Youth Service, and Connexions
Home to College Transport
Specific Grants (HCC contribution to Standards Fund)	Capital Expenditure from Revenue Account (CERA)

(PTO)

Appendix 8 (continued)

Notes to table above

1. This item relates to such expenditure as falls to be met by the LEA centrally (depending on the circumstances, schools may be required to meet some PRC (etc) costs from their delegated budgets).

2. The great majority of expenditure on supply cover is met from schools' delegated budgets and this will continue to be the case. The entry in the table relates to certain types of supply cover (eg public duties) for which there is a particularly strong case for central funding.

3. At present, educational provision for pupils aged under 5 is largely excluded from the Local Schools Budget except where it takes place in primary or special schools which also provide for older pupils. The provision to be brought into the Schools Budget consists mainly of expenditure on maintained nursery schools and on funding for private and voluntary providers. The 2002 Act provides for the allocation of delegated budget shares to maintained nursery schools, but this change will not be implemented until the financial year 2004/05: for 2003/04, therefore, funding for these schools will be a "central" item within the Schools Budget (although much of the funding will doubtless be devolved to schools under non-statutory local arrangements).