EDUCATION, ENGLAND AND WALES PART I INTRODUCTION Citation, commencement, application and interpretation 1 1 These Regulations may be cited as the Financing of Maintained Schools Regulations 1999 and shall come into force on the seventh day after the day on which they are made. 2 These Regulations shall apply for the purposes of the financing of maintained schools in any financial year beginning on or after 1st April 1999. 3 In these Regulations— “the 1996 Act ” means the Education Act 1996 ; “the 1998 Act ” means the School Standards and Framework Act 1998; “the 1998 Regulations ” mean the Education (Grant-maintained and Grant-maintained Special Schools) (Finance) Regulations 1998 . 4 In these Regulations “maintained school” means— a in relation to the period ending immediately before 1st September 1999, a county, voluntary, maintained special, grant-maintained or grant-maintained special school within the meaning of the 1996 Act; and b in relation to the period beginning on 1st September 1999, a community, foundation or voluntary school or a community or foundation special school. 5 In these Regulations a reference (however framed) to a county, voluntary or maintained special school within the meaning of the 1996 Act includes a proposed school proposals for the establishment of which have been published under section 35, 41 or 339(1) of the 1996 Act but not yet implemented and which has a temporary governing body. 6 In these Regulations a reference (however framed) to a community, foundation or voluntary school or a community or foundation special school includes a proposed school which on implementation of proposals under section 35, 41 or 339(1) of the 1996 Act or section 28 or 31 of, or paragraph 5 of Schedule 7 to, the 1998 Act will be such a school and which has a temporary governing body. 7 In these Regulations a reference to a governing body includes the temporary governing body of a proposed school falling within paragraph (5) or (6). 8 In these Regulations a reference to a primary or secondary school— a in relation to the period ending immediately before 1st September 1999, means a primary or secondary school which is a county, voluntary or grant-maintained school within the meaning of the 1996 Act; and b in relation to the period beginning on 1st September 1999, means a primary or secondary school which is a community, foundation or voluntary school. 9 In these Regulations a reference (however framed) to schools maintained by a local education authority does not include schools which are not maintained schools as defined in paragraph (4). 10 In these Regulations a reference to the permanent exclusion of a pupil is a reference to his permanent exclusion as defined from time to time for the purposes of section 494 of the 1996 Act . 11 Unless the context otherwise requires, words or expressions used in these Regulations set out in the first column of the following table shall have the meanings attributed to them by the provisions set out opposite thereto in the second column. budget share section 47(1) of the 1998 Act delegated budget section 49(7) of the 1998 Act expenditure regulation 2(2) of these Regulations (for the purposes of Part II of these Regulations) financial year section 579(1) of the 1996 Act formula regulation 10 of these Regulations individual schools budget section 46(2) of the 1998 Act key stage section 355 of the 1996 Act local schools budget section 46(1) of the 1998 Act maintained school regulation 1(4) of these Regulations maintenance grant sections 244(1) and 250(1) of the 1996 Act nursery school section 6(1) of the 1996 Act permanent exclusion regulation 1(10) of these Regulations scheme section 48(5) of the 1998 Act (in relation to the period on and after 1st April 1999) or section 101(1) of the 1996 Act (in relation to the period before 1st April 1999) school maintained by a local education authority regulation 1(9) of these Regulations school year section 579(1) of the 1996 Act special educational needs section 312(1) of the 1996 Act. 12 Unless the context otherwise requires, a reference in these Regulations to a numbered regulation or Schedule is a reference to the regulation of, or Schedule to, these Regulations so numbered and a reference to a numbered paragraph is a reference to the paragraph so numbered in the regulation or Schedule in which the reference appears. PART II LOCAL AND INDIVIDUAL SCHOOLS BUDGET Local schools budget 2 1 The classes or descriptions of local education authority expenditure specified in sub-paragraphs (a) and (b) below are hereby prescribed for the purposes of section 46(1) of the 1998 Act and the determination of a local education authority’s local schools budget subject to the exceptions in regulation 3— a expenditure incurred in connection with the authority’s functions in relation to the provision of primary and secondary education; and b expenditure on items listed in paragraph 25(a) to (d) and (r) to (t) of Schedule 1 or, as the case may be, paragraph 28(a) to (d) and (r) to (t) of Schedule 2, in so far as such expenditure does not fall within sub-paragraph (a) above. 2 For the purposes of this Part expenditure does not include expenditure defrayed by fees and charges collected by the governing body of a maintained school which are— a specifically required or permitted to be collected by any provision of the Education Acts; or b in respect of the use of school premises or equipment. Exceptions 3 A local education authority’s local schools budget shall not include the following classes or descriptions of expenditure— a expenditure in connection with nursery schools; b expenditure in connection with any provision made for children who have not attained the age of five except where such provision is made at a maintained school or the expenditure is by way of fees paid under section 320 or 348 of the 1996 Act (special provision for children with special educational needs); c expenditure in making payments to another local education authority pursuant to section 492, 493 or 494 of the 1996 Act (recoupment between authorities); d expenditure which the authority capitalise in their accounts in accordance with proper practices being those accounting practices— i which the authority are required to follow by virtue of any enactment, or ii which, whether by reference to any generally recognised published code or otherwise, are regarded as proper accounting practices to be followed in the keeping of the accounts of local authorities, either generally or of the description concerned, but in the event of any conflict in any respect between the practices falling within sub-paragraph (i) above and those falling within sub-paragraph (ii) above, only those falling within sub-paragraph (i) above are to be regarded as proper practices ; e expenditure offset by income received from Her Majesty’s Chief Inspector of Schools in England or Her Majesty’s Chief Inspector of Schools in Wales; and f expenditure for the purposes of section 26 of the Road Traffic Regulation Act 1984 (arrangements for patrolling school crossings). Individual schools budget for local education authorities in England 4 A local education authority in England may deduct from their local schools budget any or all of the classes or descriptions of planned expenditure set out in Schedule 1, in whole or in part, in order to arrive at their individual schools budget for a financial year. Individual schools budget for local education authorities in Wales 5 1 Subject to paragraphs (2) to (4), a local education authority in Wales may deduct from their local schools budget any or all of the classes or descriptions of planned expenditure set out in Schedule 2, in whole or in part, in order to arrive at their individual schools budget for a financial year. 2 Paragraphs 23, 25, 29, 39 and 42 of Schedule 2 do not apply in relation to planned expenditure in respect of schools which are, or were immediately before 1st April 1999, grant-maintained schools. 3 In the case of planned expenditure in respect of other maintained schools, planned expenditure of a kind referred to in paragraphs 23, 29, 39 and 42 of Schedule 2— a may not be deducted by an authority from their local schools budget for the financial year beginning on 1st April 1999 unless expenditure of the same class or description in the financial year beginning on 1st April 1998 did not form part of, or was deducted pursuant to the terms of the authority’s scheme (within the meaning of the 1996 Act) as then in force from, the authority’s general schools budget (within the meaning of the 1996 Act) for that financial year; and b may not be deducted by an authority from their local schools budget for any financial year beginning after 1st April 1999. 4 Planned expenditure of the kind referred to in paragraph 25(a) of Schedule 2 in relation to secondary schools may not be deducted by an authority from their local schools budget for any financial year beginning after 1st April 1999. PART III SCHOOLS' BUDGET SHARES Determination of budget shares 6 This Part applies for the purpose of determining the amount which a local education authority may determine as a maintained school’s budget share for a financial year. Allocation of individual schools budget 7 A local education authority shall allocate in each financial year in accordance with this Part all of their individual schools budget for that financial year as the budget shares of schools which they maintain. Timing of initial determination of budget shares 8 The amount of a school’s budget share for a financial year shall be initially determined by the local education authority before the beginning of that year. Consultation 9 1 A local education authority shall consult the governing body and head teacher of every county, voluntary, maintained special, grant-maintained or grant-maintained special school within the meaning of the 1996 Act which they will maintain on 1st April 1999 in relation to the factors and criteria which the authority propose to take into account, in the formula referred to in regulation 10, in determining budget shares for the financial year beginning on 1st April 1999 and in relation to any methods, principles and rules which they propose to adopt in that formula in relation to such determinations. 2 In relation to subsequent financial years a local education authority shall consult the governing body and head teacher of every school which they maintain about proposed changes in relation to the factors and criteria that were taken into account, or the methods, principles and rules that were adopted, in their formula in the preceding financial year (including any new factors, criteria, methods, principles or rules). 3 Consultation under this regulation shall take place in sufficient time to allow the outcome to be taken into account in the determination of the authority’s formula and in the initial determination of schools' budget shares before the beginning of a financial year. 4 The requirement to consult in paragraph (1) can be satisfied by consultation which takes place on and after 20th October 1998 in the case of a local education authority in England, or on and after 23rd October 1998 in the case of a local education authority in Wales, and (in either case) before the coming into force of these Regulations. 5 A local education authority shall inform all those who were consulted of the outcome of the consultation. Formula for determination of budget shares 10 1 A local education authority shall determine before the beginning of a financial year, and after the consultation referred to in regulation 9, the formula which they will use to determine schools' budget shares in that financial year having regard to the factors, criteria and requirements set out in this Part. 2 A local education authority shall have regard to the desirability of such a formula being simple, objective, measurable and predictable in effect, and clearly expressed. 3 Subject to regulation 23 a local education authority shall use the formula determined under paragraph (1) in all determinations and redeterminations of budget shares in respect of that financial year. Pupil numbers 11 1 In determining budget shares for primary and secondary schools, a local education authority shall take into account in their formula the number of registered pupils (other than pupils in places which the authority recognise as reserved for children with special educational needs or for children in nursery classes) at those schools on such date or dates as may be determined by the authority, weighted if the authority consider it appropriate in accordance with paragraph (7). 2 Paragraphs (3) and (4) shall not apply in relation to pupils in nursery or reception classes whom the authority take into account under paragraph (1) (pupils in nursery classes not occupying places which the authority recognise as reserved for such pupils or pupils in reception classes). 3 Where the authority determine only one date for the purposes of paragraph (1) that must be a date which falls— a before 1st April in the financial year in question; and b in the school year in which 1st April in the financial year in question falls. 4 Where the authority determine more than one date for the purposes of paragraph (1) then— a one of those dates must satisfy paragraph (3); b of the other date or dates— i no date may be earlier than the beginning of the school year in which 1st April in the financial year in question falls; ii the authority may determine a date or dates which are in the future and estimate the number of registered pupils at the school on that date. 5 An authority may in determining budget shares for special schools, or for primary or secondary schools with places which the authority recognise as reserved for children with special educational needs or for children in nursery classes, take into account in their formula the number of registered pupils at those special schools or the number of pupils in those reserved places at primary or secondary schools on such date or dates as may be determined by the authority, weighted if the authority consider it appropriate in accordance with paragraph (7). 6 If the authority estimate the number of registered pupils at a school they must consult the head teacher of the school. 7 A local education authority may weight pupil numbers according to any or all of the following factors— a age, including weighting according to key stage or year group; b whether a pupil is provided with nursery education by a school; c the subject or course of study in the case of pupils in a sixth form; d special educational needs; and e whether a pupil is being educated through the medium of Welsh. 8 A local education authority may adjust the number of registered pupils used to determine a school’s budget share where it is appropriate to do so in order to take into account, wholly or partly, the permanent exclusion of a pupil from the school or the admission of a pupil following his permanent exclusion from another school maintained by a local education authority. Places 12 In determining budget shares for special schools, or for primary or secondary schools with places which the authority recognise as reserved for children with special educational needs or for children in nursery classes, the local education authority may take into account in their formula the number of places which they wish to fund at those special schools or the number of places of the kind described above at those primary or secondary schools and in both cases may take account of the special educational needs in question. Schools of a particular description 13 Where a local education authority deduct from their local schools budget planned expenditure which relates to maintained schools of a particular description, they shall include factors or criteria in their formula in respect of that planned expenditure in relation to maintained schools which do not fall within that description. Discrimination by reference to category 14 A local education authority shall not use in their formula any factors or criteria which discriminate between schools by reference to their category under the 1998 Act or their category under the 1996 Act except where— a in relation to the period before 1st September 1999, differences in the functions of the governing bodies of schools in their categories under the 1996 Act; or b in relation to the period on and after 1st September 1999, differences in the functions of the governing bodies of schools in their categories under the 1998 Act, justify such discrimination. Additional factors or criteria 15 A local education authority may, in determining budget shares for schools which they maintain, take into account in their formula, as they consider appropriate, any or all of the factors or criteria set out in Schedule 3. Budget share adjustments 16 1 Subject to paragraph (3), where a school’s budget share (within the meaning of the 1996 or 1998 Act) or maintenance grant for the preceding financial year was— a determined by reference to an estimate of the number of registered pupils at the school; and b differences between the estimated number of pupils on those dates and the actual number of pupils at the school on those dates were not taken into account in a redetermination of the school’s budget share or maintenance grant for that preceding financial year, the local education authority shall determine that school’s budget share so as to take into account those differences. 2 Subject to paragraph (3) and regulation 21, a local education authority may determine a school’s budget share so as to take into account any other change during the course of the preceding financial year in the data by reference to which the school’s budget share (within the meaning of the 1996 or 1998 Act) or maintenance grant for that year was determined, if those changes were not taken into account in a redetermination of the school’s budget share or maintenance grant for that preceding financial year. 3 Paragraphs (1) and (2) shall not apply to a school which received transitional funding under regulation 9 of the 1998 Regulations in that preceding financial year. 4 A local education authority may adjust the number of registered pupils used to determine a school’s budget share where it is appropriate to do so in order to take into account, wholly or partly— a any reduction or increase in the school’s budget share (within the meaning of the 1996 or 1998 Act) or maintenance grant for the preceding financial year, or any additional allocation in that year for the purposes of the school in accordance with the authority’s scheme within the meaning of the 1996 Act, arising from the permanent exclusion of a pupil from the school or the admission to the school of a pupil permanently excluded from another maintained school; or b any increase in the school’s budget share (within the meaning of the 1996 or 1998 Act) or maintenance grant for the preceding financial year, or any additional allocation in that year for the purposes of the school in accordance with the authority’s scheme within the meaning of the 1996 Act, arising from significant increases in pupil numbers during the course of the preceding financial year. 5 A local education authority shall include factors or criteria in their formula which satisfy the requirements of this regulation. New schools 17 1 In the case of— a a proposed school referred to in regulation 1(5) or (6); b a school proposals for the establishment of which have not been fully implemented; c a school which is the subject of a significant change of character, a significant enlargement of its premises or a transfer to a new site under the 1996 Act; or d a school which is the subject of a prescribed alteration within the meaning of the 1998 Act, the local education authority shall include factors or criteria in their formula which enable them to determine the school’s budget share so as to take into account the particular needs of the school or proposed school; and in particular may, in any financial year preceding the financial year in which a school first admits pupils, determine the amount of the budget share as zero. 2 For the purposes of these Regulations, proposals for the establishment of a school have been fully implemented when the number of pupils admitted to the school in each age group has, in the opinion of the local education authority, reached— a that number of pupils indicated, when proposals for the establishment of the school were published, as the number of pupils to be admitted to each age group when the proposals were fully implemented; or b if no such number was indicated, such number as the authority may determine. Transitional funding for schools in England 18 1 In relation to the financial year beginning on 1st April 1999, a local education authority in England shall determine the budget share of a school which had received maintenance grant in the preceding financial year calculated in accordance with the 1998 Regulations, so as to include an amount for transitional funding. 2 The amount referred to in paragraph (1) is the amount if any by which the school’s protected level of funding in respect of the financial year beginning on 1st April 1998, determined by the Secretary of State in accordance with Schedule 4 and notified in writing to the authority, is greater than the school’s adjusted budget share for the financial year beginning on 1st April 1999. 3 For the purposes of this regulation a school’s adjusted budget share is its budget share determined in accordance with this Part but not taking into account the effect of this regulation and regulation 16(4) (budget share adjustments) or regulation 21 (additional provisions for determinations and redeterminations). 4 A local education authority shall include factors or criteria in their formula which satisfy the requirements of this regulation. Redetermination of budget shares 19 1 A local education authority shall include factors or criteria in their formula which enable them to redetermine a school’s budget share during the course of a financial year to take account of— a changes during the financial year in the number or estimates of the number of registered pupils at the school by reference to which the budget share was determined; b other changes during the financial year in the data by reference to which the budget share was determined; and c changes during the financial year in the amount of the authority’s individual schools budget. 2 A local education authority may not redetermine in accordance with paragraph (1) the budget share of a school in receipt of transitional funding under regulation 18 so as to reduce the amount of that school’s budget share. 3 A local education authority shall set out in their formula the factors or criteria that they will use, in redetermining schools' budget shares in accordance with paragraph (1), to allocate the planned expenditure referred to in paragraph 31 of Schedule 1 or paragraph 34 of Schedule 2. 4 A local education authority shall include factors or criteria in their formula which enable them to adjust the number of registered pupils used to determine a school’s budget share where it is appropriate to do so in order to take into account, wholly or partly— a any reduction or increase in the school’s budget share under regulation 20 (pupils permanently excluded or admitted following a permanent exclusion); or b any increase in the school’s budget share under this regulation in respect of significant increases in pupil numbers funded by the planned expenditure referred to in paragraph 31 of Schedule 1 or paragraph 34 of Schedule 2. Pupils permanently excluded or admitted following a permanent exclusion 20 1 Where a pupil is permanently excluded from a school maintained by a local education authority, the authority shall redetermine the school’s budget share for that financial year in accordance with paragraph (2). 2 The school’s budget share shall be reduced by the amount A × B 52 where— A is the amount, in the financial year in which the permanent exclusion takes effect (as defined from time to time for the purposes of section 494 of the 1996 Act (“the relevant date”)), determined by the authority, in accordance with this Part, to be attributable to a registered pupil of the same age and characteristics as the pupil in question at primary or secondary schools maintained by the authority: For the purposes of this definition the amount attributable to a registered pupil is the sum of the amounts determined in accordance with the authority’s formula or regulation 23 by reference to pupil numbers rather than by reference to the number of places at the school or any other factor or criteria not dependent on pupil numbers; and B is the number of complete weeks remaining in the financial year calculated from the relevant date: EXCEPT that 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 prior to being admitted to a middle or secondary school (including a special school which would apart from regulation 1(8) be a secondary school), B is the number of complete weeks remaining in that school year calculated from the relevant date. 3 Where a pupil is admitted to a school maintained by a local education authority (“the admitting school”) who has been permanently excluded from another maintained school in that financial year the authority shall redetermine the admitting school’s budget share in accordance with paragraph (4). 4 The school’s budget share shall be increased by an amount which may not be less than the amount D × E F where— D is the amount by which the authority reduce the budget share of the school from which the pupil was permanently excluded or would have reduced it had that school been maintained by the authority; E is the number of complete weeks remaining in the financial year during which the pupil is a registered pupil at the admitting school; F is the number of complete weeks remaining in the financial year calculated from the relevant date. 5 A local education authority shall include factors or criteria in their formula which satisfy the requirements of this regulation. Additional provisions for determinations and redeterminations for the financial year beginning on 1st April 1999 21 1 A local education authority may, in the case of a school which is, or was immediately before 1st April 1999, a county, voluntary or maintained special school within the meaning of the 1996 Act, determine or redetermine that school’s budget share for the financial year beginning on 1st April 1999 to take into account changes, during the course of any preceding financial year, in data, other than pupil numbers, by reference to which the school’s budget share within the meaning of the 1996 Act for that year was determined if— a such changes have not already been taken into account in any determination or redetermination of that school’s budget share within the meaning of the 1996 Act for a preceding financial year; and b such determination or redetermination as is proposed in the financial year commencing on 1st April 1999 could also have been made in the financial year beginning on 1st April 1998, as a determination or redetermination under the terms of the authority’s scheme in force in that year or, as a consequence of a revision to that scheme, could have been made as part of the initial determination of a school’s budget share for the financial year beginning on 1st April 1999. 2 A local education authority shall, in the case of a school which is, or was immediately before 1st April 1999, a grant-maintained or grant-maintained special school, determine or redetermine that school’s budget share for the financial year beginning on 1st April 1999 to take into account changes, during the course of any preceding financial year, in data, other than pupil numbers, by reference to which the school’s maintenance grant for that year was determined if— a such changes have not already been taken into account in any determination or redetermination of that school’s maintenance grant for a preceding financial year; and b such determination or redetermination as is proposed in the financial year commencing on 1st April 1999 could also have been made on 1st April 1998 as a determination or redetermination of the school’s maintenance grant for the preceding financial year in question. 3 A local education authority shall determine or redetermine a school’s budget share in accordance with paragraph (2) by adding or subtracting an amount determined by the Secretary of State, in accordance with the provisions of the regulations made under section 244(2) of the 1996 Act (for England or Wales as the case may be) in force on 1st April 1998 and as if any reference in the regulations for England to the Funding Agency for Schools was a reference to the Secretary of State. 4 A local education authority shall include factors or criteria in their formula which satisfy the requirements of this regulation. Percentage of “pupil-led” funding 22 In determining and redetermining budget shares for primary and secondary schools a local education authority shall ensure that their formula provides that at least 80 per cent. of the amount which is their individual schools budget, less the aggregate of the sum of the budget shares of special schools and any transitional funding determined under regulation 18, is allocated in one or more of the following manners— a in accordance with regulation 11(1) or (5); b in accordance with any other factors or criteria using pupil numbers which provide for the same funding for pupils of the same age irrespective of the nature of the school which they attend; c to places in primary schools which the authority recognise as reserved for children in nursery classes; d for children with special educational needs who do not have statements of special educational needs but only up to 5 per cent. of the total amount allocated by the authority to primary and secondary schools from their individual schools budget; e to places in primary or secondary schools which the authority recognise as reserved for children with special educational needs; f for pupils with statements of special educational needs where funding in respect of such pupils forms part of schools' delegated budgets; g by reference to any or all of the following: the recruitment of, the length, type and subject matter of courses taken by, and the achievements of, pupils in a sixth form at a school; and h in the case of a local education authority in Wales, by reference to the record of a school in recruiting and retaining pupils in the sixth form by comparison with other schools in Wales. Additional arrangements approved by the Secretary of State 23 The Secretary of State may, where it appears to him to be expedient to do so, authorise a local education authority to determine or redetermine budget shares, to such extent as he may specify, in accordance with arrangements approved by him in place of the arrangements provided for by this Part. Schools' budget shares not to be the provision of a benefit or service 24 For the purposes of section 295 of the 1996 Act (provision of benefits and services by local education authorities) the determination or redetermination of a school’s budget share in accordance with this Part shall not constitute the provision of a benefit or service for pupils or other persons at schools. PART IV SCHEMES Required content of schemes 25 A scheme prepared by a local education authority under section 48(1) of the 1998 Act shall deal with the matters connected with the financing of schools maintained by the authority set out in Schedule 5. Consultation 26 The requirement to consult the persons referred to in paragraph 1(3)(a) of Schedule 14 to the 1998 Act can be satisfied by consultation which takes place on and after 8th October 1998 in the case of a local education authority in England, or on and after 20th October 1998 in the case of a local education authority in Wales, and (in either case) before the coming into force of these Regulations. Manner of publication 27 For the purposes of paragraph 1(7) of Schedule 14 to the 1998 Act (prescribed manner of publication of schemes) a scheme shall be published by the local education authority concerned on its coming into force and in the circumstances prescribed in regulation 28 by— a furnishing a copy to the governing body and a copy to the head teacher of each school maintained by the authority; and b making a copy available for reference at all reasonable times and without charge at each school maintained by the authority and at the principal education office of the authority. Additional occasions when schemes require publication 28 For the purposes of paragraph 1(7)(b) of Schedule 14 to the 1998 Act (prescribed occasions on which publication of schemes is required) a scheme shall be published by the local education authority concerned on the coming into force of any revision of it. Estelle Morris Minister of State, Department for Education and Employment 17th January 1999 Peter Hain Parliamentary Under Secretary of State, Welsh Office 17th January 1999