EDUCATION, ENGLAND PART I INTRODUCTION Citation, commencement, application and interpretation 1 1 These Regulations may be cited as the Financing of Maintained Schools (England) Regulations 2000 and shall come into force on 29th February 2000. 2 These Regulations shall apply for the purposes of the financing of maintained schools in England in the financial year beginning on 1st April 2000. 3 In these Regulations— “the 1996 Act ” means the Education Act 1996 ; “the 1998 Act ” means the School Standards and Framework Act 1998; “the 1999 Regulations ” means the Financing of Maintained Schools Regulations 1999 . 4 In these Regulations “maintained school” means a community, foundation or voluntary school or a community or foundation special school. 5 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. 6 In these Regulations a reference to a governing body includes the temporary governing body of a proposed school falling within paragraph (5). 7 In these Regulations a reference to a primary or secondary school means a primary or secondary school which is a community, foundation or voluntary school. 8 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). 9 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 . 10 In these Regulations references to net expenditure or to a net local schools budget are references to that expenditure or that local schools budget net of related fees, charges, specific grant (except to the extent that it is used to support expenditure through the individual schools budget) or other income received by the local education authority. 11 In these Regulations a reference to a former grant-maintained or grant-maintained special school is a reference to a school which was such a school within the meaning of the 1996 Act immediately before 1st April 1999. 12 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 3(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(1) 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(9) of these Regulations scheme section 48(5) of the 1998 Act school maintained by a local education authority regulation 1(8) of these Regulations school year section 579(1) of the 1996 Act special educational needs section 312(1) of the 1996 Act. 13 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. Revocation 2 1 Subject to paragraph (2) and regulation 23(2), and to the extent that they apply in relation to England, the 1999 Regulations shall— a apply only in relation to the financial year beginning on 1st April 1999; and b be revoked on 1st April 2000. 2 A school’s budget share for the financial year beginning on 1st April 1999 may be redetermined in the financial year beginning on 1st April 2000 under regulation 20 of the 1999 Regulations or, for the purpose of correcting errors whether in calculation or data, under any of the provisions of those Regulations. PART II LOCAL AND INDIVIDUAL SCHOOLS BUDGET Local schools budget 3 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 4— 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 27(a) to (d) and (r) to (t) of Schedule 1 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 4 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 5 1 A local education authority 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 the financial year. 2 Where proposals to discontinue a school have been published and it is proposed that those proposals should be implemented in the financial year, a local education authority may deduct from their local schools budget for that year the same classes or descriptions of planned expenditure in respect of that school which they deducted from their local schools budget for the financial year beginning on 1st April 1999 even if such deduction is not permitted by paragraph (1) above. 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 the financial year. Allocation of individual schools budget 7 A local education authority shall allocate in the 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 determination of budget shares 8 1 The amount of a school’s budget share for the financial year shall be initially determined by the local education authority before the beginning of that year. 2 A local education authority may decide not to initially allocate all of their individual schools budget in the form of budget shares at the beginning of the financial year and instead to retain an amount for the purpose of redeterminations or the correction of errors but such amount must be used for that purpose or distributed to schools as required by regulation 19(4) before the end of the financial year. Consultation 9 1 A local education authority shall consult the governing body and head teacher of every school which they maintain about any proposed changes, other than the changes required by regulation 11(10), in relation to the factors and criteria that were taken into account, or the methods, principles and rules that were adopted, in their formula under the 1999 Regulations in the financial year beginning on 1st April 1999 (including any new factors, criteria, methods, principles or rules). 2 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 the financial year. 3 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 the 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 (additional arrangements approved by the Secretary of State), a local education authority shall use the formula determined under paragraph (1) in all determinations and redeterminations of budget shares in respect of the 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 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 (8). 2 For the purposes of paragraph (1), the number of registered pupils does not include— a pupils in places which the authority recognise as reserved for children with special educational needs or for children in nursery classes; or b in relation to the funding of boarding accommodation only, pupils in boarding accommodation at boarding schools other than special schools. 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 2000; and b in the school year in which 1st April 2000 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 2000 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 Paragraphs (3) and (4) (restrictions on choice of dates for the purposes of paragraph (1)) 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 any pupils in reception classes). 6 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 (8). 7 If the authority estimate the number of registered pupils at a school they must consult the head teacher of the school. 8 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; and d special educational needs. 9 A local education authority may adjust the number of registered pupils used to determine or redetermine 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. 10 Subject to paragraph (11) a local education authority shall provide in their formula that any amount allocated in accordance with paragraph (1) or (6) in respect of a pupil shall be at least 2.5 per cent. higher than the amount initially determined in relation to the financial year beginning on 1st April 1999 in respect of a pupil with the same characteristics under the corresponding provisions of the 1999 Regulations. 11 Paragraph (10) shall not apply in relation to any amount allocated in accordance with paragraph (1) or (6) weighted in accordance with paragraph (8)(d). Places 12 In determining budget shares for— a special schools; b primary or secondary schools with places which the authority recognise as reserved for children with special educational needs or for children in nursery classes; or c schools with boarding accommodation, the local education authority may take into account in their formula the number of places which they wish to fund at those special schools, the number of places of the kind described above at those primary or secondary schools or the amount of boarding accommodation which they wish to fund and in the case of (a) and (b) above may take account of the special educational needs in question. Differential funding 13 1 A local education authority shall use factors or criteria which differentiate between different categories or descriptions of schools in so far as the functions of the governing bodies of those schools justify such differentiation but may not otherwise do so except as required or expressly permitted by these Regulations. 2 A local education authority shall use factors or criteria which differentiate between a school and other schools of the same category or description if the choice that that school’s governing body have made under these Regulations regarding particular expenditure funding for which is to be included in their schools' budget share, justifies such differentiation. 3 A local education authority are not required to use factors or criteria in their formula which differentiate between— a primary and secondary schools, and special schools; b schools whose pupils are in different age ranges, but they may do so. 4 Where a local education authority choose to use a particular factor or criteria, which they did not use in the financial year beginning on 1st April 1999, to delegate funding to all or some of the schools which they maintain then this regulation shall not require them to delegate such funding to a school which it is proposed to discontinue during the financial year but they may do so. Additional factors or criteria 14 Subject to regulation 13, 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 2. Budget share adjustments in relation to the financial year beginning on 1st April 1999: Pupil numbers 15 1 This regulation applies to the extent that a school’s budget share for the financial year beginning on 1st April 1999 was determined pursuant to regulation 11(1) or (5) of the 1999 Regulations other than in cases where pupil numbers were weighted according to special educational needs. 2 Subject to paragraph (3), to the extent that a school’s budget share for that 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 for that preceding financial year, the local education authority shall determine that school’s budget share for the financial year beginning on 1st April 2000 so as to take into account those differences. 3 A local education authority may determine a school’s budget share so as to make such adjustments which are appropriate to take into account, wholly or partly, any increases in pupil numbers during the course of the financial year beginning on 1st April 1999. 4 In so far as a determination under this regulation would require the amount that would otherwise be the budget share of a former grant-maintained or grant-maintained special school to be reduced, it may not be reduced by an amount greater than the amount by which the school’s budget share for the financial year beginning on 1st April 1999 determined in accordance with regulation 18 (transitional funding) of the 1999 Regulations could have been reduced. 5 In so far as a determination under this regulation would require the amount that would otherwise be the budget share of a former grant-maintained or grant-maintained special school to be increased, there shall be deducted from that increase any amount for transitional funding determined in respect of the school in the financial year beginning on 1st April 1999 under regulation 18 (transitional funding) of the 1999 Regulations. 6 A local education authority shall include factors or criteria in their formula which satisfy the requirements of this regulation. Budget share adjustments in relation to the financial year beginning on 1st April 1999: Non-pupil number factors 16 1 This regulation applies to the extent that a school’s budget share for the financial year beginning on 1st April 1999 was determined other than pursuant to regulation 11(1) or (5) of the 1999 Regulations or was so determined in accordance with pupil numbers weighted according to special educational needs. 2 Where there has been a change in the data— a on the basis of which that determination was made; and b that change was not taken into account in a redetermination of the school’s budget share for that preceding financial year, the local education authority may determine that school’s budget share so as to take into account those changes. 3 In so far as a determination under this regulation would require the amount that would otherwise be the budget share of a former grant-maintained or grant-maintained special school to be reduced, it may not be reduced by an amount greater than the amount by which the school’s budget share for the financial year beginning on 1st April 1999 determined in accordance with regulation 18 (transitional funding) of the 1999 Regulations could have been reduced. 4 In so far as a determination under this regulation would require the amount that would otherwise be the budget share of a former grant-maintained or grant-maintained special school to be increased, there shall be deducted from that increase any amount for transitional funding determined in respect of the school in the financial year beginning on 1st April 1999 under regulation 18 (transitional funding) of the 1999 Regulations. 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); 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 18 1 A local education authority shall determine the budget share of a former grant-maintained or grant-maintained special school 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 2000 determined by the local education authority in accordance with Schedule 3 is greater than the school’s adjusted budget share for that financial year. 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 regulations 15 (budget share adjustments: pupil numbers), 16 (budget share adjustments: non-pupil number factors), regulation 20 (excluded pupils) and 21 (additional provisions for 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, if they so wish, to redetermine a school’s budget share during the course of the financial year to take account wholly or partly of— a changes during the financial year in the number or estimates of the number of registered pupils (including the substitution of actual numbers for estimates) at the school by reference to which the budget share was determined in accordance with regulation 11(1) or (6) other than in cases where pupil numbers were weighted according to special educational needs; 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 32 of Schedule 1. 4 Where the local education authority propose to retain part of their individual schools budget pursuant to regulation 8(2) for the purpose of redeterminations or the correction of errors they shall include factors or criteria in their formula which require them to redetermine schools' budget shares before the end of the financial year so as to distribute to schools the unallocated balance of any such retained amount on the basis of pupil numbers in accordance with regulation 11(1) or (6). 5 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 or redetermine 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 32 of Schedule 1. 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 for the full financial year 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(7) 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 redeterminations in relation to non-pupil number factors in financial years beginning on or before 1st April 1998 21 1 A local education authority may redetermine a school’s budget share within the meaning of the 1996 Act for any financial year beginning on or before 1st April 1998 to take into account changes in data, other than pupil numbers, by reference to which the school’s budget share for that year if any 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 or the 1998 Act or its maintenance grant (as a former grant-maintained or grant-maintained special school); and b such redetermination as is proposed could have been made in that preceding financial year under the terms of the authority’s scheme within the meaning of the 1996 Act in force in that year. 2 A local education authority shall, in the case of a former grant-maintained or grant-maintained special school, redetermine that school’s budget share for the financial year beginning on 1st April 2000 to take into account changes in data, other than pupil numbers, by reference to which the school’s maintenance grant for any financial year beginning on or before 1st April 1998 was determined if such changes have not already been taken into account in any determination or redetermination of that school’s maintenance grant or budget share for a preceding financial year. 3 Subject to paragraph (4), a local education authority shall redetermine a school’s budget share in accordance with paragraph (2) by adding or subtracting such amount, if any, determined by the Secretary of State, in accordance with the provisions of the regulations made under section 244(2) of the 1996 Act in force in the preceding financial year in question and as if any reference to the Funding Agency for Schools was a reference to the Secretary of State. 4 If the Secretary of State considers it likely that the changes in data referred to in paragraph (2) and any consequent change in the school’s maintenance grant for that year would have meant that the governing body would have received a larger payment of special purpose grant pursuant to section 245 of the 1996 Act in respect of the costs incurred by the school in respect of Value Added Tax in that year he may add to the amount determined under paragraph (3) an amount which he considers would be equivalent to that increase. Conversely if he considers that the governing body would have been entitled to a smaller such payment he may subtract an amount which he considers would be equivalent to that reduction. 5 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 (6); 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 but such funding for children with special educational needs who do not have statements of special educational needs shall only count towards the figure of 80 per cent. referred to above to the extent that it does not exceed 5 per cent. of the total amount allocated by the authority to primary and secondary schools from their individual schools budget; c to places in primary schools which the authority recognise as reserved for children in nursery classes; d to places in primary or secondary schools which the authority recognise as reserved for children with special educational needs; e for pupils with statements of special educational needs where funding in respect of such pupils forms part of schools' delegated budgets; f 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 g to places for pupils in boarding accommodation at boarding schools other than special schools. Additional arrangements approved by the Secretary of State 23 1 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. 2 Authorisations given and arrangements approved by the Secretary of State under the 1999 Regulations shall continue to apply in relation to the financial year beginning on 1st April 2000 notwithstanding the provisions of regulation 2(1) of these Regulations. PART IV SCHEMES Required content of schemes 24 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 4. Manner of publication 25 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 26 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 26 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 25th February 2000