PART IINTRODUCTION

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(2);

"the 1998 Act" means the School Standards and Framework Act 1998;

"the 1999 Regulations" means the Financing of Maintained Schools Regulations 1999(3).

(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(4).

(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.

(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 IILOCAL 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(6) 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(7);

(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(8) (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 IIISCHOOLS' 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

(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

(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 IVSCHEMES

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.

Regulation 5(1)

SCHEDULE 1CLASSES OR DESCRIPTIONS OF PLANNED EXPENDITURE WHICH MAY BE DEDUCTED FROM THE LOCAL SCHOOLS BUDGET OF A LOCAL EDUCATION AUTHORITY

Expenditure of a class or description referred to in this Schedule includes expenditure on associated administrative costs and overheads.

Expenditure supported by specific grants

1. Expenditure offset by a grant made to the authority under conditions which impose restrictions on the particular purposes of the authority for which the grant may be used.

2. Expenditure, not falling within paragraph 1, but taken into account in determining the amount of that grant.

Special educational provision

3. Expenditure on services provided by educational psychologists.

4. Expenditure, not falling within paragraph 3, in connection with the authority's functions under sections 321 to 331 of the 1996 Act (which functions relate to the identification and assessment of children with special educational needs and the making, maintaining and reviewing of statements for such children).

5. Subject to paragraphs 6 and 7, expenditure in making the provision specified in a pupil's statement of special educational needs except where the pupil is-

(a)a registered pupil at a special school maintained by the authority; or

(b)a registered pupil at a primary or secondary school maintained by the authority who occupies one of a number of places at that school which are recognised by the authority as being reserved for children with special educational needs.

6. Where a pupil falls within paragraph 5(a) or (b) and the cost of the provision specified in the pupil's statement of special educational needs is significantly greater than that for the generality of pupils at the special school, or occupying the places at the primary or secondary school, in question, the amount by which the expenditure incurred in making the provision specified in his statement of special educational needs is greater than that incurred in making provision for a pupil who falls within such generality of pupils.

7. Expenditure in making the provision specified in a pupil's statement of special educational needs where the pupil falls within paragraph 5(b) but the places which are recognised by the authority as being reserved for children with special educational needs are for such pupils with visual, hearing, speech or language impairments or other communication disorder.

8. Expenditure in respect of specialist support provided to assist the governing bodies of schools in meeting the particular needs of pupils with statements of special educational needs or who are at Stage 3 or 4 as described in the Code of Practice(10) on the Identification and Assessment of Special Educational Needs issued, and from time to time revised, under section 313 of the 1996 Act (being expenditure that it would be inappropriate to expect to be met from the school's budget share).

9. Expenditure on monitoring the provision for pupils in schools (whether or not maintained by the authority) for the purposes of disseminating good practice in relation to, and improving the quality of educational provision for, children with special educational needs.

10. Expenditure for purposes connected with the encouragement of-

(a)collaboration between special schools and primary and secondary schools to enable children with special educational needs to engage in activities at primary and secondary schools;

(b)the education of children with special educational needs at primary and secondary schools; and

(c)the engagement of children with special educational needs at primary and secondary schools in activities at the school with children who do not have special educational needs (being expenditure that it would be inappropriate to expect to be met from the school's budget share).

11. Expenditure on the provision of guidance and information to the parents of pupils with special educational needs which, in relation to pupils at a school maintained by the authority, is in addition to the information usually provided by the governing bodies of such schools.

12. Expenditure in relation to education otherwise than at school under section 19 of the 1996 Act or in relation to a pupil referral unit as defined in that section.

13. Expenditure, not falling within any other paragraph of this Schedule, incurred in preparing and reviewing a plan which sets out the arrangements made, or proposed to be made, by the authority in connection with the education of children with behavioural difficulties under section 527A of the 1996 Act(11) and such expenditure incurred on services required to implement the plan.

14. Expenditure on carrying out the authority's functions under the Children Act 1989(12) and other functions relating to child protection.

15. Expenditure on the payment of fees in respect of pupils with special educational needs-

(a)at independent schools or at special schools which are not maintained by a local education authority, under section 348 of the 1996 Act; or

(b)at an institution outside England and Wales, under section 320 of the 1996 Act.

16. Expenditure incurred in entering into, or subsequently incurred pursuant to, an arrangement with a Health Authority, Primary Care Trust or NHS Trust under section 31 of the Health Act 1999(13).

17. Expenditure in providing special medical support for individual pupils in so far as such expenditure is not met by a Health Authority, Primary Care Trust or NHS Trust.

School improvement

18. Expenditure, not falling within any other paragraph of this Schedule, incurred in preparing, reviewing and implementing the authority's education development plan under section 6 of the 1998 Act.

Access to education

19. Expenditure in relation to the following matters-

(a)management of the authority's capital programme including preparation and review of an asset management plan and negotiation and management of private finance transactions as defined in regulation 16 of the Local Authorities (Capital Finance) Regulations 1997(14);

(b)planning and managing the supply of school places, including the authority's functions-

(i)in relation to school organisation plans pursuant to section 26 of the 1998 Act,

(ii)in relation to the establishment, alteration or discontinuance of schools pursuant to Chapter II of Part II of the 1998 Act;

(c)administration of the system of admissions of pupils to schools including expenditure incurred in carrying out consultations under section 89(2) of the 1998 Act and in relation to appeals, provided that, except where the governing body have elected that this proviso should not apply to them, the authority shall-

(i)allocate to each governing body who are an admission authority, as defined in section 88(1) of the 1998 Act, an amount determined by the authority as that reasonably required by the governing body to meet expenditure incurred in connection with the system of admissions of pupils to the school and any appeals, and

(ii)allow the governing body to determine how such amount should be spent for that purpose;

(d)the authority's functions in relation to the exclusion of pupils from schools including advice to the parents of an excluded pupil;

(e)school organisation committees;

(f)the authority's functions under section 509 of the 1996 Act (home-to-school transport);

(g)the authority's functions under sections 510, 514 and 518(15) of the 1996 Act (provision and administration of clothing grants, boarding grants and educational maintenance allowances); and

(h)the Education Welfare Service and other expenditure arising from the authority's functions under Chapter II of Part VI of the 1996 Act and section 10 of the Children and Young Persons Act 1933(16) (school attendance).

20. Expenditure on milk, meals and other refreshment pursuant to section 512 or 513 of the 1996 Act falling within the following categories-

(a)expenditure in respect of meals at any primary or special school which is not a former grant-maintained or grant-maintained special school, unless the governing body have elected to receive funding for meals as part of their school's budget share;

(b)expenditure in respect of meals at any former grant-maintained primary or special school where the governing body have elected not to receive funding for meals as part of their school's budget share;

(c)expenditure in respect of milk at any school which is not a former grant-maintained or grant-maintained special school; and

(d)expenditure in respect of milk at any former grant-maintained or grant-maintained special school where the provision of that milk attracts a subsidy from the European Community.

21. Expenditure on the repair and maintenance of a school kitchen where expenditure on meals in relation to the school concerned is deducted from the authority's local schools budget pursuant to paragraph 20.

22. Expenditure on determining the eligibility of a pupil for free school meals.

23. Expenditure pursuant to section 18 of the 1996 Act in making any grant or other payment in respect of fees or expenses (of whatever nature) which are payable in connection with the attendance of pupils at a school which is not maintained by any local education authority.

24. Expenditure on the provision of tuition in music or on other activities which provide opportunities for pupils to enhance their experience of music.

25. Expenditure which enables pupils to enhance their experience of the visual and performing arts other than music.

26. Expenditure on outdoor education centres but not including centres wholly or mainly for the provision of organised games, swimming or athletics.

Strategic management

27. Expenditure in their capacity as a local education authority in relation to-

(a)the Chief Education Officer and his personal staff;

(b)planning for the education service as a whole;

(c)the administration of committees or of any body to which the authority delegate decision making on education matters in both cases consisting wholly or mainly of members of the authority;

(d)revenue budget preparation, the production and publication of accounts and external audit;

(e)administration of grants to the authority (including preparation of applications), functions imposed by or under Chapter IV of Part II of the 1998 Act and, where it is the authority's duty to do so, ensuring payments are made in respect of taxation, national insurance and superannuation contributions;

(f)authorisation and monitoring of expenditure which is not met from schools' delegated budgets (including expenditure in respect of schools which do not have delegated budgets) and all financial administration relating thereto;

(g)internal audit and other tasks necessary for the discharge of the authority's chief finance officer's responsibilities under section 151 of the Local Government Act 1972(17);

(h)recruitment, training and personnel management of staff who are funded by expenditure not met from schools' budget shares or who are employed in schools which do not have delegated budgets;

(i)investigations which the authority carry out of employees or potential employees of the authority or of governing bodies of schools;

(j)functions of the authority in relation to local government superannuation which it is not reasonably practicable for another person to carry out and functions of the authority in relation to the administration of teachers' pensions;

(k)retrospective membership of pension schemes and retrospective elections made in respect of pensions where it would not be appropriate to expect the governing body of a school to meet the cost from the school's budget share;

(l)advice, in accordance with the authority's statutory functions, to governing bodies in relation to staff employed, or to be employed, at a school;

(m)determination of conditions of service for non-teaching staff and advice to schools on the grading of such staff;

(n)the authority's functions regarding the appointment or dismissal of employees;

(o)consultation with governing bodies and persons employed at schools or their representatives;

(p)compliance with the authority's duties under the Health and Safety at Work etc. Act 1974(18) and the relevant statutory provisions as defined in section 53(1) of that Act in so far as compliance cannot reasonably be achieved through functions delegated to the governing bodies of schools;

(q)the investigation and resolution of complaints;

(r)legal services relating to the statutory functions of the authority;

(s)the preparation and review of plans involving collaboration with other local authority services or with public or voluntary bodies;

(t)the preparation, modification and revision of an early years development plan for their area under sections 120 and 121 of the 1998 Act; and

(u)provision of information to or at the request of the Crown and the provision of other information which the authority are under a duty to make available.

28. Expenditure in connection with the authority's functions in relation to the standing advisory council on religious education constituted by the authority under section 390 of the 1996 Act or in the reconsideration and preparation of an agreed syllabus of religious education in accordance with Schedule 31 to the 1996 Act.

29. Expenditure in respect of the dismissal or premature retirement of, or for the purpose of securing the resignation of, or in respect of acts of discrimination against, any person which falls to be met by the authority, except such expenditure which falls to be met from the school's budget share, by virtue of section 57 of the 1998 Act or the authority's scheme.

30. Expenditure in respect of a teacher's emoluments under section 19(9) of the Teaching and Higher Education Act 1998(19) except such expenditure which falls to be met from a school's budget share.

31. Expenditure without which the education of pupils at a school would be seriously prejudiced and which because of both its size and unexpectedness it would not be reasonable to expect the governing body to meet from the school's budget share.

32. Expenditure on increases to, or on the correction of errors in, the school's budget share to which the school is entitled by virtue of the authority's formula under regulation 10 or arrangements under regulation 23.

33. Expenditure on establishing and maintaining electronic computer systems, including data storage, in so far as they link, or facilitate the linkage of, the authority to schools which they maintain, such schools to each other or such schools to other persons or institutions.

34. Expenditure on insurance except to the extent that governing bodies have elected to receive funding for insurance as part of their schools' budget shares.

35. Expenditure in making payments to, or in providing a temporary replacement for, a woman on maternity leave.

36. Expenditure in making payments to, or in providing a temporary replacement for, persons-

(a)carrying out trade union duties or undergoing training under section 168 of the Trade Union and Labour Relations (Consolidation) Act 1992(20);

(b)taking part in trade union activities under section 170 of the Trade Union and Labour Relations (Consolidation) Act 1992;

(c)performing public duties under section 50 of the Employment Rights Act 1996(21);

(d)undertaking jury service;

(e)who are safety representatives under the Safety Representatives and Safety Committee Regulations 1977(22);

(f)who are representatives of employee safety under the Health and Safety (Consultation with Employees) Regulations 1996(23);

(g)who are employee representatives for the purposes of Chapter II of Part IV of the Trade Union and Labour Relations (Consolidation) Act 1992 as defined in section 196 of that Act or regulations 10 and 11 of the Transfer of Undertakings (Protection of Employment) Regulations 1981 as defined in regulation 11A of those Regulations(24);

(h)taking time off for ante-natal care under section 55 of the Employment Rights Act 1996;

(i)undertaking duties as members of the reserve forces as defined in section 1(2) of the Reserve Forces Act 1996(25);

(j)suspended from working at a school; and

(k)who are members of the General Teaching Council or a committee thereof.

37. Expenditure in making payments to, or in providing a temporary replacement for, a person who is seconded on a full-time basis for a period of three months or more other than to a local education authority or the governing body of a school.

38. Expenditure in making payments to, or in providing a temporary replacement for, persons who have been continuously absent from work because of illness for 21 days or more provided that the net expenditure under this paragraph does not amount to more than 0.1 per cent. of the authority's net local schools budget.

39. Expenditure on the appointment of governors, the making of instruments of government, the payment of expenses to which governors are entitled and which are not payable from a school's budget share and the provision of information to governors.

40. Expenditure on services to schools provided by museums and galleries.

41. Expenditure on library services for primary and special schools, other than for schools which received funding for library services as part of their budget shares for the financial year beginning on 1st April 1999 and to the extent that their governing bodies have elected to receive funding for those same library services as part of their schools' budget shares for the financial year beginning on 1st April 2000, and

Provided that the authority-

(a)notify the governing body of each school, which does not receive funding for library services in its budget share, of the share of the amount retained by the authority in respect of library services which is attributable to each such school; and

(b)allow the governing body to determine whether expenditure retained by the authority in respect of their school is to be spent by the authority in providing library services to the school themselves or in procuring that library services are provided to the school by another local authority.

42. Expenditure on licence fees or subscriptions paid on behalf of schools provided that the net expenditure does not amount in total to more than 0.1 per cent. of the authority's net local schools budget.

43. Expenditure in pursuance of a binding agreement, where the other party is a local authority, or the other parties include one or more local authorities, in relation to the operation of a facility provided not solely for the use of schools.

44. Expenditure on monitoring National Curriculum assessment arrangements required by orders made under section 356 of the 1996 Act(26).

45. Expenditure for purposes not falling within any other paragraph of this Schedule provided that the net expenditure does not amount in total to more than 0.1 per cent. of the authority's net local schools budget.

Regulation 14

SCHEDULE 2ADDITIONAL FACTORS OR CRITERIA WHICH MAY BE TAKEN INTO ACCOUNT IN A LOCAL EDUCATION AUTHORITY'S FORMULA UNDER REGULATION 10

Except where otherwise stated the factors or criteria set out below in this Schedule may not be taken into account by a local education authority in their formula on the basis of actual or estimated cost.

Where a local education authority take new factors or criteria into account in their formula then they may make such transitional provision as they consider reasonable.

1. Special educational needs of pupils determined in a manner that the authority consider appropriate as a means of assessing such needs.

2. Pupils for whom English is not their first language.

3. Recruitment of, the length, type or subject matter of courses taken by, or the achievements of, pupils in a sixth form at a school.

4. Turnover of pupils other than as part of the general admissions process at a school.

5. Admission arrangements at a school.

6. The size and condition of a school's buildings and grounds relative to those of other schools maintained by the authority: The funding must be in accordance with scales published by the authority which reflect so far as appropriate the statutory duties of governing bodies in relation to school premises and their eligibility for grant from any government department.

7. A school which has a split site in accordance with criteria published by the authority.

8. Facilities found at some schools only.

9. Rates payable in respect of the premises of each school (including actual or estimated cost).

10. Charges for water and sewerage (including actual or estimated cost).

11. Heating and lighting of school premises.

12. Rent payable in respect of school premises (including actual or estimated cost).

13. Cleaning of school premises.

14. Transport to and from activities outside the school premises which form part of the school's curriculum.

15. Hire of facilities outside school premises (including actual or estimated cost).

16. In cases where the governing body have elected to have an amount in respect of insurance included in the school's budget share, the appropriate proportion of the authority's planned expenditure on insurance or, if the authority do not insure, the appropriate proportion of the amount that the authority would have spent had they insured, to be determined on a basis decided by the authority.

17. Payments in relation to a private finance transaction as defined in regulation 16 of the Local Authorities (Capital Finance) Regulations 1997(27) (including actual or estimated cost).

18. Amounts payable to a new school established as the result of the discontinuance of one or more maintained schools to reflect the extent to which a school which has been discontinued has spent more than or has not spent all its budget share (within the meaning of the 1996 or the 1998 Act) in any financial year. Any such factor or criteria must provide that any amount deducted shall not exceed the amount which the school receives during the financial year as part of its budget share by virtue of being a new school.

19. Whether the school is to be discontinued in the financial year in question.

20. School milk, meals and other refreshment: The authority may not treat any element of this expenditure as having a negative value.

21. Teachers' salaries at a school (including actual or estimated cost): The funding must be in accordance with a scale published by the authority.

22. Safeguarding of salaries in accordance with orders made from time to time under section 2 of the School Teachers' Pay and Conditions Act 1991(28) (including actual or estimated cost).

23. Social priority allowances in accordance with orders made from time to time under section 2 of the School Teachers' Pay and Conditions Act 1991 (including actual or estimated cost).

24. Differential costs of London weighting of salaries.

25. Social deprivation in the area from which a school derives its pupils.

26. The need for single payments to be allocated to primary, secondary or special schools, or any combination of such schools, regardless of size.

27. The need for payments to be allocated to schools, of a size and satisfying other conditions, specified by the authority.

28. Schools whose budget shares would otherwise be reduced year-on-year by more than 3 per cent.: The funding must be in accordance with a scale published by the authority.

29. Contracts to which the governing body of a school are bound by virtue of a provision in the authority's scheme (including actual or estimated cost).

30. The presence of nursery nurses at a school with nursery classes in cases where such a factor was also used in the financial year beginning on 1st April 1999.

31. Payroll administration costs: The funding must be based on the number of staff at the school, unless factors permitted elsewhere in these Regulations are used.

32. Any other factors or criteria not otherwise falling within this Schedule contained in the authority's scheme (within the meaning of the 1996 Act) as it applied in relation to the financial year beginning on 1st April 1998 (including actual or estimated cost): Provided that the total amount allocated in accordance with the authority's formula having regard to such factors or criteria shall not exceed 0.5 per cent. of the authority's individual schools budget.

Regulation 18

SCHEDULE 3PROTECTED LEVEL OF FUNDING

1. This Schedule applies for the purpose of determining the protected level of funding for a school, to which regulation 18 (transitional funding for schools) applies, in respect of the financial year beginning on 1st April 2000.

2. Subject to paragraphs 3 and 4, the protected level of funding for the financial year beginning on 1st April 2000 for each school to which regulation 18 applies shall be calculated according to the formula-

3.-(1) In the case of a special school which has places for both day and boarding pupils, the protected level of funding for the financial year beginning on 1st April 2000 for the school shall be calculated according to the formula

(2) For the purposes of the formula in sub-paragraph (1) above,

• "e", "f", "h" and "i" have the values previously ascribed to them by the Secretary of State for the purposes of Schedule 4 to the 1999 Regulations;

• "g" is the number appearing to the local education authority to be the appropriate number of places for day pupils for which the special school could be funded in accordance with these Regulations for the financial year beginning on 1st April 2000;

• "j" is the number appearing to the local education authority to be the appropriate number of places for boarding pupils for which the special school could be funded in accordance with these Regulations for the financial year beginning on 1st April 2000.

4. The protected level of funding for the financial year beginning on 1st April 2000 for-

Uppingham Community College, Rutland,

Casterton Community College, Rutland,

Vale of Catmose Community College, Rutland,

shall be

Regulation 24

SCHEDULE 4CONTENTS OF SCHEMES

The matters referred to in regulation 24, being matters connnected with the financing of schools maintained by a local education authority, required to be dealt with in the local education authority's scheme are as follows:

1. The carrying forward from one financial year to another of surpluses and deficits arising in relation to schools' budget shares including budget shares as defined in section 101(3)(c) of the 1996 Act.

2. The carrying forward from one financial year to another of surpluses and deficits arising in relation to any maintenance, special purpose or capital grant within the meaning of Chapter VI of Part III of the 1996 Act paid in respect of the school.

3. Amounts which may be charged against schools' budget shares.

4. Amounts received by schools which may be retained by their governing bodies and the purposes for which such amounts may be used.

5. The imposition, by or under the scheme, of conditions which must be complied with by schools in relation to the management of their delegated budgets and of sums made available to governing bodies by the authority which do not form part of delegated budgets, including conditions prescribing financial controls and procedures.

6. Terms on which services and facilities are provided by the authority for schools maintained by them.

7. The payment of interest by or to the authority.

8. The times at which amounts equal in total to the school's budget share are to be made available to governing bodies and the proportion of the budget share to be made available at each such time.

9. The Virement between budget heads within the delegated budget.

10. Circumstances in which the authority may delegate to the governing body the power to spend any part of the authority's local schools budget in addition to those set out in section 49(4)(a) to (c) of the 1998 Act.

11. The use of delegated budgets and of sums made available to the governing body by the authority which do not form part of delegated budgets.

12. Borrowing by governing bodies.

13. The banking arrangements that may be made by governing bodies.

14. A statement as to the personal liability of governors in respect of schools' budget shares having regard to section 50(7) of the 1998 Act.

15. A statement as to the allowances payable to governors of a school which does not have a delegated budget in accordance with the scheme made by the authority for the purposes of section 519 of the 1996 Act.

16. The keeping of a register of any business interests of the governors and the head teacher.

17. The provision of information by and to the governing body.

18. The maintenance of inventories of assets.

19. Plans of a governing body's expenditure.

20. A statement as to the taxation of sums paid or received by a governing body.

21. Insurance.

22. The use of delegated budgets by governing bodies so as to satisfy the authority's duties imposed by or under the Health and Safety at Work etc. Act 1974(30).

23. The repayment to the Secretary of State of loans made to the governing body under section 255 of the 1996 Act.

24. The provision of legal advice to the governing body.

25. Funding for child protection issues.

26. School meals.

Explanatory Note

(This note is not part of the Regulations)

These Regulations prescribe the expenditure which makes up the local education authority's "local schools budget" for the financial year beginning on 1st April 2000.

These Regulations specify the nature of the planned expenditure which a local education authority may deduct from their local schools budget in order to arrive at their "individual schools budget" for that financial year.

An authority's individual schools budget is to be divided between the schools which they maintain in the form of budget shares for each school. These Regulations provide the basis on which a local education authority may determine the amount from their individual schools budget to be allocated to each school as its budget share for that financial year.

These Regulations require a local education authority to deal in a scheme prepared by them with specified matters connected with the financing of schools which they maintain.