The School Funding (Wales) Regulations 2010

PART 1 — Introduction

Title, commencement and application

1.—(1) The title of these Regulations is the School Funding (Wales) Regulations 2010, and they come into force on 1 September 2010.

(2) These Regulations apply in relation to financial years beginning on or after 1 April 2011.

(3) These Regulations apply in relation to Wales.

Revocation

2.  The LEA Budget, Schools Budget, and Individual Schools Budget (Wales) Regulations 2003(1), the Schools Budget Shares (Wales) Regulations 2004(2), and the Education (LEA Financial Schemes) (Wales) Regulations 2004(3) are revoked in relation to financial years beginning on or after 1 April 2011.

Interpretation

3.—(1) In these Regulations—

• “the 1996 Act” (“Deddf 1996”) means the Education Act 1996(4);

• “the 1998 Act” (“Deddf 1998”) means the School Standards and Framework Act 1998(5);

• “the 2000 Act” (“Deddf 2000”) means the Learning and Skills Act 2000(6);

• “the 2002 Act” (“Deddf 2002”) means the Education Act 2002(7);

• “the Children and Young People’s Plan” (“y Cynllun Plant a Phobl Ifanc”) means a plan required under regulations made under section 26 of the Children Act 2004(8);

• “funding period” (“cyfnod cyllido”) means a financial year;

• “local authority” (“awdurdod lleol”) means a local education authority in Wales;

• “maintained school” (“ysgol a gynhelir”) means a community, or foundation or voluntary school or a community or foundation special school or a maintained nursery school;

• “nursery class” (“dosbarth meithrin”) means a class undergoing full time or part time education wholly or mainly suitable for children who have not attained compulsory school age.

(2) In these Regulations a reference (however framed) to a maintained nursery school, a community, foundation or voluntary school or community or foundation special school includes a new school (within the meaning of section 72(3) of the 1998 Act) which on implementation of proposals for the establishment of the school under any enactment will be such a school and which has a temporary governing body.

(3) In these Regulations a reference to a governing body includes the temporary governing body of a new school falling within paragraph (2).

(4) In these Regulations a reference to a primary or secondary school means a primary or a secondary school which is (or will be) a community, foundation or voluntary school.

(5) In these Regulations a reference (however framed) to schools maintained by a local authority does not include schools which are not maintained schools as defined in paragraph (1).

(6) In these Regulations, unless otherwise stated, references to expenditure are references to that expenditure net of—

(a) all related specific grants;

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

(c) funding received from the Welsh Ministers in respect of PFI scheme unitary payment.

(7) In these Regulations, a reference to specific grant is to any grant paid to the local authority under conditions which impose restrictions on the particular purposes of the authority for which the grant may be used but does not include—

(a) any grant made by the Welsh Ministers in respect of sixth form funding; or

(b) any specific grant which is used to support expenditure through the individual schools budget.

(8) In these Regulations, a reference to a PFI scheme unitary payment is a reference to a charge payable to a local authority under a private finance transaction.

(9) In these Regulations, a reference to a private finance transaction is a reference to a transaction as defined by regulation 16 of the Local Authorities (Capital Finance) Regulations 1997(9).

(10) In these Regulations, a reference to capital expenditure means expenditure which a local authority proposes to capitalise in their accounts in accordance with proper practices being those accounting practices—

(a) which the authority are required to follow by virtue of any enactment, or

(b) which so far as they are consistent with any such enactment, are generally regarded whether by reference to any generally recognised published Code or otherwise, as proper accounting practices to be followed in the keeping of the accounts of local authorities, either generally or of the description concerned.

(11) In these Regulations references to CERA are references to capital expenditure which a local authority expect to charge to a revenue account of the authority within the meaning of section 22 of the Local Government Act 2003(10).

(12) In these Regulations, references to excepted expenditure are references to the following classes or descriptions of expenditure—

(a) capital expenditure other than CERA;

(b) expenditure for the purposes of section 26 of the Road Traffic Regulation Act 1984(11) (arrangements for patrolling school crossing); and

(c) expenditure incurred by the local authority under section 51A of the 1998 Act(12) (expenditure incurred for community purposes).

PART 2 — LEA Budget, Schools Budget, Individual Schools Budget

LEA Budget

4.—(1) The classes or descriptions of local authority expenditure specified in Schedule 1 are prescribed for the purposes of section 45A(1) of the 1998 Act and the determination of a local authority’s LEA budget, except in so far as such expenditure is excepted expenditure or falls within paragraph (2).

(2) Expenditure falls within this paragraph if it is expenditure which—

(a) by virtue of the authority’s scheme (within the meaning of section 48(5) of the 1998 Act) or any enactment, falls to be met from a school’s budget share; or

(b) falls within sub-paragraph (1) of paragraph 1 of Schedule 2.

Initial determination of schools budget

5.—(1) Before 14 February immediately preceding the beginning of a funding period a local authority must—

(a) make an initial determination of their schools budget for that funding period; and

(b) give notice of their determination to the Welsh Ministers, to the governing body of every school maintained by them.

(2) Where a local authority makes a redetermination of their schools budget, they must give notice of that redetermination to the Welsh Ministers and to the governing bodies of every school maintained by them within 28 days of making the redetermination.

Schools budget

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

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

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

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

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

but only in so far as such expenditure—

(a) does not fall within a class or description of expenditure prescribed by regulation 4 for the purposes of section 45A(1) of the 1998 Act and the determination of a local authority’s LEA budget, and

(b) is not excepted expenditure.

Individual schools budget

7.  Before 14 February immediately preceding the beginning of a funding period, a local authority must deduct from their 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 that funding period.

PART 3 — Schools' budget shares

Allocation of individual schools budget

8.—(1) A local authority must allocate in each funding period in accordance with this Part of these Regulations, all of their individual schools budget for that funding period as the budget shares of schools which they maintain.

(2) A local authority need not initially allocate all of their individual schools budget in the form of budget shares at the beginning of a funding period, and may instead 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 paragraph (1) before the end of that funding period.

Timing and notification of initial determination of schools' budget shares

9.—(1) Before 31 March immediately preceding the beginning of a funding period, a local authority must

(a) make an initial determination of the amount of a school’s budget share for that funding period, and

(b) give notice of each school’s budget share for that funding period to the governing bodies of the schools they maintain.

(2) The notice given under paragraph (1)(b) must contain an explanation of how the school’s budget share was determined and an estimate of the school’s budget shares for the following two funding periods but that estimate is not binding on the authority as to the actual determinations they make for the following two funding periods.

Formula for determination of budget shares

10.—(1) A local authority must determine before the beginning of a funding period, and after the consultation referred to in regulation 11, the formula which they will use to determine schools' budget shares in that funding period having regard to the factors, criteria and requirements set out in this Part of these Regulations.

(2) A local authority must have regard to the desirability of such a formula being simple, objective, measurable, predictable in effect and clearly expressed.

(3) A local authority may not use factors or criteria in their formula which make an allowance, in whole or in part, for any amount allocated to the school from any grant paid to the authority by the Welsh Ministers.

(4) Subject to regulation 25 (additional arrangements approved by the Welsh Ministers) a local authority must use the formula determined under paragraph (1) in all determinations and redeterminations of budget shares.

Consultation

11.—(1) In relation to their formula for a funding period, in addition to consulting the schools forum for their area, a local authority must consult the governing body and head teacher of every school which they maintain about any proposed changes to the factors and criteria which were taken into account, or the methods, principles and rules which were adopted in their formula in the preceding funding period (including any new factors, criteria, methods, principles or rules).

(2) Paragraph (1) does not apply to changes made pursuant to regulations 8(2), 19(4) or 22.

(3) Consultation under this regulation must 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.

(4) A local authority must inform all those who were consulted of the outcome of the consultation.

New Schools

12.—(1) A new school must have a delegated budget from the date when the school first admits pupils.

(2) But a local authority’s schools forum may on the application of the authority—

(a) vary that date to one proposed by the authority,

(b) vary it to a different date, or

(c) refuse to vary the date.

(3) Where the schools forum vary the date to a different date or refuse to vary it, the local authority may apply to the Welsh Ministers to vary the date.

(4) The Welsh Ministers may—

(a) vary the date to one proposed by the authority,

(b) vary it to a different date, or

(c) refuse to vary the date.

Pupil numbers

13.—(1) In determining budget shares for maintained nursery, primary and secondary schools, a local authority must take into account in their formula the number of registered pupils at those schools on such dates as may be determined by them weighted if the authority consider it appropriate in accordance with paragraph (7).

(2) For the purpose of paragraph (1), the number of registered pupils does not include—

(a) pupils in respect of whom grant is payable to the authority by the Welsh Ministers under section 36 of the 2000 Act;

(b) pupils in places which the authority recognise as reserved for children with special educational needs or (except where the local authority chooses not to exercise their discretion under regulation 15 in respect of children in nursery classes) for children in nursery classes.

(3) Where the authority determine only one date for the purposes of paragraph (1) it must be a date which falls—

(a) before the beginning of the funding period in question; and

(b) in the school year in which the beginning of the funding period 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) as respects the other date or dates—

(i) no date may be earlier than the beginning of the school year in which the beginning of the funding period in question falls, and

(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 or those dates.

(5) The restrictions on the dates in paragraphs (3) and (4) do not apply in relation to pupils in nursery or reception classes whom the authority take into account under paragraph (1).

(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–

(a) the number of registered pupils at those special schools; or

(b) the number of pupils in those reserved places at primary or secondary schools;

on the date or dates determined for the purpose of paragraph (1) (weighted if the authority consider it appropriate in accordance with paragraph (7)).

(7) A local 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) in the case of pupils aged under five, their exact age when admitted to the school;

(d) in the case of pupils aged under five, hours of attendance;

(e) special educational needs;

(f) whether a pupil at a school is also attending an institution within the further education sector; and

(g) whether a pupil is being educated through the medium of Welsh.

(8) Subject to paragraph (9), where—

(a) a primary school operates a policy of admitting children into nursery or reception classes in the summer term, and

(b) it will admit pupils into such classes in the summer term immediately after the date or dates determined under paragraph (1),

a local authority may determine a number representing the number of pupils who will be admitted in that summer term, and take such number into account in their formula.

(9) In determining the number of pupils they will take into account under paragraph (8), a local authority—

(a) must not determine any number which exceeds the number of pupils admitted in the summer term immediately prior to the date or dates determined under paragraph (1) and

(b) must make any such determination before the beginning of the funding period during which the pupils will be admitted.

(10) A local authority must include provision in their formula enabling 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, the permanent exclusion of a pupil from the school or the admission of a pupil following that pupil’s permanent exclusion from another school maintained by a local authority.

Pupil Numbers: Dual Registration

14.  Where a pupil is, in accordance with regulations made under section 434 of the 1996 Act(13), a registered pupil at more than one school then that pupil must be treated as being a full-time pupil at each such school unless the authority expressly provide otherwise in their formula.

Places

15.—(1) In determining and redetermining budget shares a local authority may take into account in their formula the number of places they wish to fund in–

(a) special schools;

(b) primary or secondary schools with places which the authority recognise as reserved for children with special educational needs;

(c) primary schools with places which the authority recognise as reserved for children in a nursery class; or

(d) maintained nursery schools.

(2) In determining and redetermining budget shares a local authority may take into account in their formula the nature of any special educational needs when funding places at special schools or places recognised as reserved for children with special educational needs in primary or secondary schools.

(3) A local authority must provide that, if any places at special schools are taken into account in accordance with paragraph (1), the number must be no fewer than the number of registered pupils at the school on the date or dates determined for the purpose of regulation 13(1).

Schools of a particular description

16.  Where a local authority deduct from their schools budget planned expenditure which relates to maintained schools of a particular description, they must 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.

Differential funding

17.  A local authority must not use in their formula any factors or criteria which discriminate between schools by reference to their category under the 1998 Act except where differences in the functions of the governing bodies of schools of different categories justify such discrimination.

Additional factors or criteria

18.—(1) Subject to regulations 16 and 17, a local authority may, in determining budget shares, take into account in their formula, as they consider appropriate, any or all of the factors or criteria set out in Schedule 3, as provided for in that Schedule.

(2) A local authority must, in determining budget shares for both primary and secondary schools which they maintain, take into account in their formula a factor or factors based on the incidence of social deprivation among pupils registered at all such schools.

(3) A factor included in an authority’s formula pursuant to paragraph 19 of Schedule 3, is not, for the purpose of paragraph (2), a factor based on the incidence of social deprivation among pupils registered at a school.

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

(5) Where a local authority take new factors or criteria into account in their formula or delete factors from their formula or determine a formula substantially or wholly different from the previous funding period, they may make such transitional provision as they consider reasonable.

Funding for pupils over compulsory school age

19.—(1) Subject to regulation 21 (budget share adjustments) the budget share for a secondary school or special school that provides education suitable for the requirements of persons over compulsory school age must include an amount (“the Amount”) in respect of that school’s pupils above compulsory school age.

(2) The Amount must include, on a net basis—

(a) an allocation by the local authority in respect of that school’s provision for pupils over compulsory school age in accordance with the conditions of grant payable to the local authority by the Welsh Ministers under section 36 of the 2000 Act (“the Grant”);

(b) any amount which the local authority provides for education of pupils over compulsory school age.

(3) To the extent the Amount is not subject to the conditions in the Grant, a local authority must, in determining budget shares use a factor which allocates funding in respect of pupils over compulsory school age.

(4) A school’s budget share for a funding period must be redetermined before the end of that funding period where the authority receive a written notification from the Welsh Ministers of an allocation of the Grant or a revised allocation of the Grant.

School re-organisation

20.—(1) In the case of a maintained school which is—

(a) a new school referred to in regulation 3(2);

(b) a school (other than a new school) proposals for the establishment of which under any enactment have not been fully implemented;

(c) a school which is the subject of proposals for a prescribed alteration under Chapter 2 of Part 2 of the 1998 Act or section 113A of the 2000 Act;

(d) a maintained nursery school which is to be discontinued in the funding period in question,

the local authority must 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; and in particular may, if the funding period in question precedes the funding period 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 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.

Budget share adjustments

21.—(1) To the extent that a school’s budget share for a funding period was—

(a) determined by reference to an estimate of the number of registered pupils at the school on a particular date or dates; and

(b) differences between the estimated number of pupils on that date or those dates and the actual number of pupils at the school on that date or those dates were not taken into account in a redetermination of the school’s budget share for that funding period,

the local authority must determine that school’s budget share for the following funding period so as to take into account those differences.

(2) A local authority may determine a school’s budget share for a funding period so as to take into account any other change during the course of the preceding funding period in the data by reference to which the school’s budget share for that preceding funding period was determined, if those changes were not taken into account in a redetermination of the school’s budget share for that preceding funding period.

(3) A local authority may adjust the number of registered pupils used to determine a school’s budget share for a funding period 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 for the preceding funding period 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 for the preceding funding period arising from increases in pupil numbers during the course of that funding period.

(4) A local authority must include factors or criteria in their formula which satisfy the requirements of this regulation.

Pupils excluded or admitted following an exclusion

22.—(1) Where a pupil is permanently excluded from a school maintained by a local authority during a funding period, the authority must redetermine the school’s budget share for that funding period in accordance with paragraph (2).

(2) The school’s budget share is to be reduced by the amount A × (B/52) where—

• A is the amount, in the funding period in which the permanent exclusion takes effect, determined by the authority in accordance with these Regulations to be attributable for the full funding period 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 25 by reference to pupil numbers rather than by reference to the number of places at the school or any other factor or criterion not dependent on pupil numbers; and

• B is the number of complete weeks remaining in the funding period calculated from the relevant date;

• EXCEPT that where the permanent exclusion takes effect on or after 1 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 another school with a different pupil age range, B is the number of complete weeks remaining in that school year calculated from the relevant date.

(3) Where a pupil who has been permanently excluded from a maintained school is, in the same funding period, admitted to a school maintained by the local authority (“the admitting school”), the authority must redetermine the admitting school’s budget share in accordance with paragraph (4).

(4) The school’s budget share is to 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 funding period during which the pupil is a registered pupil at the admitting school;

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

(5) For the purposes of this regulation, the relevant date has the meaning prescribed in regulations made under section 494 of the 1996 Act(14).

(6) Where a permanently excluded pupil is subsequently reinstated by the governing body of the school or by an appeal panel constituted under regulations made under section 52 of the 2002 Act(15), the school’s budget share must be increased by an amount which is no less than G × (H/I) where—

• G is the amount by which the authority has reduced the school’s budget share;

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

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

(7) Paragraphs (1) and (2) also apply where a pupil leaves a maintained school for reasons other than permanent exclusion, and is receiving education funded by a local authority other than at a school which is maintained by that authority.

Percentage of “pupil-led” funding

23.—(1) Subject to paragraph (2), in determining and redetermining budget shares for primary and secondary schools a local authority must ensure that their formula provides that at least 70 per cent of the amount which is their individual schools budget is allocated in one or more of the following manners—

(a) in accordance with regulation 13(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;

(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.

(2) For the purposes of this regulation, the budget shares of schools providing education only for pupils over compulsory school age, of special schools and any part of the individual schools budget retained pursuant to regulation 8(2) for the purpose of redeterminations or the correction of errors must be excluded from the local authority’s individual schools budget.

Correction of errors

24.  A local authority may at any time during a funding period redetermine a school’s budget share for that funding period in order to correct an error in a determination or redetermination under these Regulations, whether arising from a mistake as to the number of registered pupils at the school or otherwise.

Additional arrangements approved by the Welsh Ministers

25.  The Welsh Ministers may, where it appears to them to be expedient to do so, authorise a local authority to determine or redetermine budget shares, at any time and to such extent as they may specify, in accordance with arrangements approved by them in place of the arrangements provided for elsewhere in these Regulations.

PART 4 — Financial Schemes

Required content of schemes

26.  A scheme maintained by a local authority under section 48(1) of the 1998 Act must deal with the matters connected with the financing of schools maintained by the authority set out in Schedule 4 to 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 must be published by the local authority concerned on its coming into force as revised under that Schedule by—

(a) furnishing a copy to the governing body and head teacher of each school maintained by the authority; and

(b) making a copy available for reference at all reasonable times and without charge—

(i) at the principal education office of the authority; and

(ii) at each school maintained by the authority or on a website which is maintained by the authority and accessible to the public.

Approval by the schools forum or the Welsh Ministers of proposals to revise schemes

28.—(1) Where a local authority submit proposals for any revisions to their scheme to their schools forum for approval pursuant to paragraph 2A of Schedule 14 to the 1998 Act, the schools forum may–

(a) approve any such proposals;

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

(c) refuse to approve any such proposals.

(2) Where the schools forum approve any revisions to the scheme, they may specify the date upon which any revised scheme is to come into force.

(3) Where the schools forum refuse to approve proposals submitted under paragraph 2A of Schedule 14 to the 1998 Act, or approve any such proposals subject to modifications which are not acceptable to the local authority, the authority may apply to the Welsh Ministers for approval of such proposals.

(4) The Welsh Ministers may—

(a) approve any such proposals;

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

(c) refuse to approve any such proposals.

(5) Where the Welsh Ministers approves any revisions to the scheme, they may specify the date upon which any revised scheme is to come into force.

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

Leighton Andrews

Minister for Children, Education and Lifelong Learning, one of the Welsh Ministers

16 March 2010