The School Finance (England) Regulations 2006

Explanatory Note

(This note is not part of the Regulations)

These Regulations make, in a single instrument, provision for the financial arrangements of local education authorities (“LEAs”) in relation to the funding of schools over the financial years 2006–07 and 2007–08. Such provision is presently made, in relation to 2005–06, by The Financing of Maintained Schools (England) Regulations 2004 and The LEA Budget, Schools Budget and Individual Schools Budget (England) Regulations 2004 (revoked by this instrument).

These Regulations define the LEA Budget (regulation 3), the schools budget (regulation 5), central expenditure (regulation 7 and Schedule 2), and the individual schools budget (regulation 7), and provide the basis upon which a local education authority may determine schools' budget shares. They also require, in regulation 26 and Schedule 6, a local education authority in a scheme prepared by them to set out specified matters connected with the financing of schools which they maintain. The budget definitions, formerly in the Budget Regulations, remain largely unchanged.

The most significant changes from the 2004 Regulations relate to local education authorities' obligations, in regulations 4 and 10, to notify the governing bodies of maintained schools not later than 31st March 2006 of the schools budgets and their school’s budget shares for the financial years 2006–07 and 2007–08 (now referred to as funding periods 1 and 2). Limits are imposed on the deduction of certain expenditure from the schools budgets for funding periods 1 and 2 by regulation 7 and Schedule 2, and there are new powers for schools forums to vary those limits in regulation 13. In so doing, the schools forum will be authorising deduction of particular amounts. Schools forums may also approve changes to a local education authority’s formula in specified circumstances, and subject to conditions (regulations 9 and 25). Where a schools forum will not vary any limit, or approve changes to the formula, the authority may apply to the Secretary of State (regulations 13 and 25).

The Secretary of State has a new power to authorise deductions from, and vary limits on deductions from, the schools budget (regulation 13), and retains the power to approve any redetermination of budget shares to such extent as she may specify (regulation 25).