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STATUTORY INSTRUMENTS

2001 No. 475
EDUCATION, ENGLAND
The Financing of Maintained Schools (England) Regulations 2001

	Made	15th February 2001
	Laid before Parliament	21st February 2001
	Coming into force	14th March 2001

ARRANGEMENT OF REGULATIONS

PART I
INTRODUCTION

1.	Citation, commencement, application and interpretation.

2.	Operation of the 2000 Regulations.

PART II
LOCAL AND INDIVIDUAL SCHOOLS BUDGET

3.	Local schools budget.

4.	Exceptions.

5.	Individual schools budget.

PART III
SCHOOLS' BUDGET SHARES: MAIN PROVISIONS

6.	Determination of budget shares.

7.	Allocation of individual schools budget.

8.	Timing of determination of budget shares.

9.	Consultation.

10.	Formula for determination of budget shares.

11.	Pupil numbers.

12.	Dates for ascertaining pupil numbers.

13.	Pupil numbers: Dual registration.

14.

Places.

15.	Differential funding.

16.	Additional factors or criteria.

17.	Budget share adjustments in relation to the financial year beginning on 1st April 2000: Pupil numbers.

18.	Budget share adjustments in relation to the financial year beginning on 1st April 2000: Non-pupil number factors.

19.	New schools.

20.	Transitional funding.

21.	Redetermination of budget shares.

22.	Pupils permanently excluded or admitted following a permanent exclusion.

23.	Additional provisions for redeterminations in relation to financial years beginning on or before 1st April 1999: (1) Former grant-maintained or grant-maintained special schools in the period before they became such schools and (2) Schools which were never such schools.

24.	Additional provisions for redeterminations in relation to the financial year beginning on 1st April 1999: Former grant-maintained or grant-maintained special schools.

25.	Additional provisions for redeterminations in relation to financial years beginning on or before 1st April 1998: Former grant-maintained or grant-maintained special schools.

26.	Percentage of "pupil-led" funding.

PART IV
ADDITIONAL AMOUNT TO BE ADDED TO AMOUNT DETERMINED UNDER PART III

27.	Definition for Part IV.

28.	Determination of additional amount.

29.	Redeterminations of budget shares under Part III.

PART V
CORRECTION OF ERRORS AND ADDITIONAL ARRANGEMENTS APPROVED BY THE SECRETARY OF STATE

30.	Correction of errors.

31.	Additional arrangements approved by the Secretary of State.

PART VI
SCHEMES

32.	Required content of schemes.

33.	Manner of publication.

34.	Additional occasions when schemes require publication.

Schedule 1

Classes or descriptions of planned expenditure which may be deducted from the local schools budget of a local education authority.

Schedule 2

Additional factors or criteria which may be taken into account in a local education authority's formula under regulation 10.

Schedule 3

Protected level of funding.

Schedule 4

Contents of schemes.

In exercise of the powers conferred on the Secretary of State by sections 46, 47, 48(1) and (2) and 138(7) of, and paragraph 1(7) of Schedule 14 to, the School Standards and Framework Act 1998[1] the Secretary of State for Education and Employment hereby makes the following Regulations:

PART I
INTRODUCTION
Citation, commencement, application and interpretation
     1. - (1) These Regulations may be cited as the Financing of Maintained Schools (England) Regulations 2001 and shall come into force on 14th March 2001.

    (2) These Regulations shall apply for the purposes of the financing of maintained schools in England in the financial year beginning on 1st April 2001.

    (3) In these Regulations -

"the 1996 Act" means the Education Act 1996[

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

3

4

    (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 to proposals for the establishment of a school is a reference to a proposal for the establishment of the school 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.

    (6) In these Regulations, except in Part IV where the definition in regulation 27 applies, 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 for the establishment of the school will be such a school and which has a temporary governing body.

    (7) In these Regulations a reference to a governing body includes the temporary governing body of a proposed school falling within paragraph (6).

    (8) 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.

    (9) In these Regulations a reference (however framed) to schools maintained by a local education authority does not include schools which are not maintained schools as defined in paragraph (4).

    (10) In these Regulations a reference to the permanent exclusion of a pupil is a reference to his permanent exclusion as defined from time to time for the purposes of section 494 of the 1996 Act[5].

    (11) In these Regulations references to net expenditure or to a net local schools budget -

    (12) 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.

    (13) Unless the context otherwise requires, words or expressions used in these Regulations set out in the first column of the following table shall have the meanings attributed to them by the provisions set out opposite thereto in the second column.

budget share section 47(1) of the 1998 Act

delegated budget section 49(7) of the 1998 Act

expenditure regulation 3(2) of these Regulations (for the purposes of Part II of these Regulations)

financial year section 579(1) of the 1996 Act

formula regulation 10 of these Regulations

individual schools budget section 46(2) of the 1998 Act

key stage section 355(1) of the 1996 Act

local schools budget section 46(1) of the 1998 Act

maintained school regulation 1(4) of these Regulations

maintenance grant sections 244(1) and 250(1) of the 1996 Act

nursery school section 6(1) of the 1996 Act

permanent exclusion regulation 1(10) of these Regulations

scheme section 48(5) of the 1998 Act

school maintained by a local education authority regulation 1(9) of these Regulations

school year section 579(1) of the 1996 Act[6]

special educational needs section 312(1) of the 1996 Act.

    (14) Unless the context otherwise requires, a reference in these Regulations to a numbered regulation, Part or Schedule is a reference to the regulation or Part 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.

Operation of the 2000 Regulations
     2. A school's budget share for the financial year beginning on 1st April 2000 may only be redetermined in the financial year beginning on 1st April 2001 in accordance with the provisions of the 2000 Regulations or the Financing of Maintained Schools (England) (No. 2) Regulations 2000[7], if such redetermination makes provision for

PART II
LOCAL AND INDIVIDUAL SCHOOLS BUDGET
Local schools budget
3. - (1) The classes or descriptions of local education authority expenditure specified in sub-paragraphs (a) and (b) below are hereby prescribed for the purposes of section 46(1) of the 1998 Act and the determination of a local education authority's local schools budget subject to the exceptions in regulation 4 -

(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 -

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 on payments to another local education authority pursuant to section 492, 493 or 494[

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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[9];

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Individual schools budget
5. 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.

    (4) Subject to regulation 31 (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 in accordance with regulation 12, weighted if the authority consider it appropriate in accordance with paragraph (5).

    (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) 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 (5).

    (4) If the authority estimate the number of registered pupils at a school they must consult the head teacher of the school.

    (5) 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) 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, whether they have been admitted to the school in excess of planned admission limits agreed with the authority;

(e) the subject or course of study in the case of pupils in a sixth form; and

(f) special educational needs.

(6) 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.

(7) Subject to paragraph (8), a local education authority shall provide in their formula that the average amount per pupil allocated in accordance with regulation 11(1) or (3) in respect of pupils who are -

(a) in key stage 1 or 2;

(b) in key stage 3 or 4;

(c) above compulsory school age,

shall in each case be at least 2.5 per cent. higher than the average amount per pupil initially determined in each of those three cases under the corresponding provisions of the 2000 Regulations.

(8) Paragraph (7) shall not apply in relation to any amount allocated in accordance with paragraph (3) weighted in accordance with paragraph (5)(f) (special educational needs).

Dates for ascertaining pupil numbers
12. - (1) Where the authority determine only one date for the purposes of regulation 11(1) that must be a date which falls -

(a) before 1st April 2001; and

(b) in the school year in which 1st April 2001 falls.

(2) Where the authority determine more than one date for the purposes of regulation 11(1) then -

(a) one of those dates must satisfy paragraph (1) above;

(b) of the other date or dates -

    (3) Paragraphs (1) and (2) (restrictions on choice of dates for the purposes of regulation 11(1)) shall not apply in relation to pupils in nursery or reception classes whom the authority take into account under regulation 11(1) (pupils in nursery classes not occupying places which the authority recognise as reserved for such pupils or any pupils in reception classes).

Pupil numbers: Dual registration
     13. Where a pupil is, in accordance with regulations made under section 434 of the 1996 Act[11], a registered pupil at more than one school then that pupil shall be treated as being a full-time pupil at each such school unless the authority expressly provide otherwise in their formula.

Places
     14. - (1) 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 paragraphs (a) and (b) above may take account of the special educational needs in question.

(2) A local education authority shall provide in their formula that any amount allocated in accordance with -

(a) paragraph (1)(a); or

(b) in so far as it relates to special educational needs, paragraph (1)(b),

in respect of a place at a school shall be at least 2.5 per cent. higher than the amount initially determined in relation to the financial year beginning on 1st April 2000 in respect of a place appropriate to a pupil with the same characteristics at that school under the corresponding provisions of the 2000 Regulations.

Differential funding
     15. - (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 school's 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) If a local education authority choose to use a particular factor or criteria to delegate funding to all or some of the schools which they maintain, and a school which it is proposed to discontinue during the financial year did not receive funding in accordance with that factor or criteria in the financial year beginning on 1st April 2000, then this regulation shall not require the local education authority to delegate such funding to that school in accordance with that factor or criteria but they may do so.

Additional factors or criteria
     16. Subject to regulation 15 (differential funding), 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 2000: Pupil numbers
     17. - (1) This regulation applies to the extent that a school's budget share for the financial year beginning on 1st April 2000 was determined pursuant to regulation 11(1) or (6) of the 2000 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 the financial year beginning on 1st April 2000 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 financial year,

the local education authority shall determine that school's budget share for the financial year beginning on 1st April 2001 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 2000.

    (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 2000 determined in accordance with regulation 18 (transitional funding) of the 2000 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 2000 under regulation 18 (transitional funding) of the 2000 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 2000: Non-pupil number factors
     18. - (1) This regulation applies to the extent that a school's budget share for the financial year beginning on 1st April 2000 was determined other than pursuant to regulation 11(1) or (6) of the 2000 Regulations or was so determined in accordance with pupil numbers weighted according to special educational needs.

    (2) Where -

(a) there has been a change in the data 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 the financial year beginning on 1st April 2000,

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 2000 determined in accordance with regulation 18 (transitional funding) of the 2000 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 2000 under regulation 18 (transitional funding) of the 2000 Regulations.

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

New schools
     19. - (1) In the case of -

(a) a proposed school referred to in regulation 1(6);

(b) a school proposals for the establishment of which have not been fully implemented;

(c) a school which is the subject of a significant change of character, a significant enlargement of its premises or a transfer to a new site under the 1996 Act; or

(d) a school which is the subject of a prescribed alteration within the meaning of the 1998 Act,

the local education authority shall include factors or criteria in their formula which enable them to determine the school's budget share so as to take into account the particular needs of the school or proposed school; and in particular may, in any financial year preceding the financial year in which a school first admits pupils, determine the amount of the budget share as zero.

(2) For the purposes of these Regulations, proposals for the establishment of a school have been fully implemented when the number of pupils admitted to the school in each age group has, in the opinion of the local education authority, reached -

(a) that number of pupils indicated, when proposals for the establishment of the school were published, as the number of pupils to be admitted to each age group when the proposals were fully implemented; or

(b) if no such number was indicated, such number as the authority may determine.

Transitional funding
     20. - (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 2001 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 and Part V but not taking into account the effect of this regulation and regulations 17 (budget share adjustments: pupil numbers), 18 (budget share adjustments: non-pupil number factors), 22 (excluded pupils), 23, 24 and 25 (additional provisions for redeterminations) and Part IV.

    (4) The amount of a school's transitional funding shall not be affected by a net increase during the financial year in that school's adjusted budget share arising out of changes in the numbers of pupils with statements of special educational needs or changes in the needs of such pupils.

    (5) A local education authority which maintain a former grant-maintained or grant-maintained special school shall include factors or criteria in their formula which satisfy the requirements of this regulation.

Redetermination of budget shares
     21. - (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 (3) 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) This regulation is subject to regulation 20 (transitional funding).

    (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 (3).

    (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 22 (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
22. - (1) Where a pupil is permanently excluded from a school maintained by a local education authority, the authority shall redetermine the school's budget share for that financial year in accordance with paragraph (2).

(2) The school's budget share shall be reduced by the amount A × (B/52) where -

A is the amount, in the financial year in which the permanent exclusion takes effect (as defined from time to time for the purposes of section 494 of the 1996 Act[

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B is the number of complete weeks remaining in the financial year calculated from the relevant date:

(3) Where a pupil is admitted to a school maintained by a local education authority ("the admitting school") who has been permanently excluded from another maintained school in that financial year the authority shall redetermine the admitting school's budget share in accordance with paragraph (4).

(4) The school's budget share shall be increased by an amount which may not be less than the amount D × (E/F) where -

D is the amount by which the authority reduce the budget share of the school from which the pupil was permanently excluded or would have reduced it had that school been maintained by the authority;

E is the number of complete weeks remaining in the financial year during which the pupil is a registered pupil at the admitting school;

F is the number of complete weeks remaining in the financial year calculated from the relevant date.

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

Additional provisions for redeterminations in relation to financial years beginning on or before 1st April 1999: (1) Former grant-maintained or grant-maintained special schools in the period before they became such schools and (2) Schools which were never such schools
23. - (1) A local education authority may in the circumstances described in paragraph (2) redetermine a school's budget share for the financial year beginning on 1st April 2001 to take into account changes in that school's non-domestic rates liability or to correct errors in data supplied by the head teacher or governing body of the school, by reference to which the following were determined -

(a) the school's budget share within the meaning of the 1996 Act for any financial year beginning on or before 1st April 1998; or

(b) in the case of a school which is not a former grant-maintained or grant-maintained special school, the school's budget share within the meaning of the 1998 Act for the financial year beginning on 1st April 1999.

(2) The circumstances referred to in paragraph (1) are that -

(a) such matters 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 relation to the preceding financial year in question under the terms of the authority's scheme within the meaning of the 1996 Act in force in that year or, in the case of the financial year beginning on 1st April 1999, the 1999 Regulations.

(3) 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 the financial years beginning on 1st April 1999: Former grant-maintained or grant-maintained special schools
24. - (1) A local education authority may redetermine a former grant-maintained or grant-maintained special school's budget share for the financial year beginning on 1st April 2001 to take into account changes in that school's non-domestic rates liability or to correct errors in data supplied by the head teacher or governing body of the school, by reference to which the school's budget share for the financial year beginning on 1st April 1999 was determined if -

(a) such matters have not already been taken into account in any determination or redetermination of that school's budget share for the financial year beginning on 1st April 1999 or 1st April 2000;

(b) such redetermination as is proposed could have been made in that financial year beginning on 1st April 1999 in accordance with the 1999 regulations.

    (2) In so far as a determination under paragraph (1) would require the amount that would otherwise be the budget share of the 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.

    (3) In so far as a determination under paragraph (1) 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.

    (4) 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 financial years beginning on or before 1st April 1998: Former grant-maintained or grant-maintained special schools
     25. - (1) A local education authority shall, in the case of a former grant-maintained or grant-maintained special school and in so far as required by paragraphs (2) to (4), redetermine that school's budget share for the financial year beginning on 1st April 2001 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 financial year beginning before 1st April 2001.

    (2) The local education authority shall add or subtract 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.

    (3) The Secretary of State may decline to make a determination under paragraph (2) unless -

(a) he has received by 31st March 2001, a request in writing to make such a determination; and

(b) the person making the request has provided the Secretary of State by 31st March 2001 with sufficient information about the changed data to enable him to carry out the necessary calculations without further enquiry.

    (4) If the Secretary of State considers it likely that the changes in data referred to in paragraph (1) 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 (2) 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 for the financial year in question.

    (5) Where the Secretary of State has confirmed in writing to a local education authority that he does not propose to make a determination under paragraph (2) in respect of a particular school then that local education authority may in the circumstances described in paragraph (6) redetermine that school's budget share for the financial year beginning on 1st April 2001 to take into account changes in that school's non-domestic rates liability or to correct errors in data supplied by the head teacher or governing body of the school, by reference to which the school's maintenance grant (as a grant-maintained or grant-maintained special school) was determined for the financial year in question.

    (6) The circumstances referred to in paragraph (5) are that -

(a) such matters 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);

(b) such redetermination as is proposed could have been made in the preceding financial year in question in relation to a school maintained by the authority under the terms of the authority's scheme within the meaning of the 1996 Act in force in that year; and

(c) any increase or decrease in the amount of the school's budget share to take into account changes in the school's non-domestic rates liability does not exceed the change in the school's net liability in respect of rates.

    (7) In so far as a determination under paragraph (5), arising from adjustments relating to the financial year beginning on 1st April 1998, would require the amount that would otherwise be the budget share of the school to be reduced, it may not be reduced by an amount greater than the amount by which the school's maintenance grant for that financial year determined in accordance with regulation 9 (transitional funding) of the Education (Grant-maintained and Grant-maintained Special Schools) (Finance) Regulations 1998[13] ("the 1998 Regulations") could have been reduced.

    (8) In so far as a determination under paragraph (5), arising from adjustments relating to the financial year beginning on 1st April 1998, 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 1998 under regulation 9 (transitional funding) of the 1998 Regulations.

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

Percentage of "pupil-led" funding
     26. - (1) 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 amounts referred to in paragraph (2), is allocated in one or more of the following manners -

(a) in accordance with regulation 11(1) or (3);

(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.

(2) For the purposes of this regulation the following amounts are to be excluded from the local education authority's individual schools budget -

(a) the budget shares of special schools;

(b) any transitional funding determined under regulation 20;

(c) any part of the individual schools budget retained pursuant to regulation 8(2) for the purpose of redeterminations or the correction of errors in relation to special schools;

(d) any amount determined under Part IV.

PART IV
ADDITIONAL AMOUNT TO BE ADDED TO AMOUNT DETERMINED UNDER PART III
Definition for Part IV
27. In this Part a reference to a maintained school includes a proposed school which, on implementation of the proposals for the establishment of the school, will be a community, foundation or voluntary school or a community or foundation special school in the financial year beginning on 1st April 2001.

Determination of additional amount
28. - (1) In making the initial determination of a maintained school's budget share, a local education authority shall, subject to paragraphs (2), (3) and (5) and regulation 31 below, add to the amount determined in accordance with Part III, the amount which is set out in column (2) of the table below, opposite the description of that school in column (1).

(1)	(2)
Description of school	Amount to be added
Primary school with fewer than 100.5 pupils	�6,000
Primary school with 100.5 pupils or more but with fewer than 200.5 pupils	�12,000
Primary school with 200.5 pupils or more but with fewer than 400.5 pupils	�20,000
Primary school with 400.5 pupils or more but with fewer than 600.5 pupils	�25,000
Primary school with 600.5 pupils or more	�40,000
Secondary school with fewer than 600.5 pupils	�50,000
Secondary school with 600.5 pupils or more but with fewer than 1,200.5 pupils	�60,000
Secondary school with 1,200.5 pupils or more	�70,000
Special school with fewer than 100.5 pupils	�18,000
Special school with 100.5 pupils or more	�25,000

    (2) A local education authority shall determine the budget share of a middle deemed primary school which has a year 8 or a year 9 class as if that school were a secondary school.

    (3) Where a proposed school to which this Part applies will not have a budget share on or before 1st April 2001, a local education authority shall redetermine the budget share of that school in accordance with this Part as soon as it does have a budget share.

    (4) References in the table to a number of pupils are references to -

where the "full-time equivalent" is the number of full-time pupils plus half the number of part-time pupils, and a "part-time pupil" is one who attends school other than on the basis that he should attend both morning and afternoon sessions at least 5 days each week.

(5) A local education authority shall not determine the budget share of a school in accordance with this Part if proposals to discontinue the school in the financial year beginning on 1st April 2001 have already been approved.

Redeterminations of budget shares under Part III
29. Whenever a local education authority redetermine a school's budget share in accordance with Part III they shall -

(a) first determine an amount in accordance with that Part without taking into account the amount to be added in accordance with this Part; and then

(b) add to the amount so determined the amount to be added in accordance with this Part.

PART V
CORRECTION OF ERRORS AND ADDITIONAL ARRANGEMENTS APPROVED BY THE SECRETARY OF STATE
Correction of errors
     30. A local education authority may at any time during the financial year redetermine a school's budget share for the financial year beginning on 1st April 2001 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 Secretary of State
     31. - (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 these Regulations.

    (2) Authorisations given and arrangements approved by the Secretary of State under the 1999 Regulations or the 2000 Regulations shall, unless the contrary intention appears in such authorisation or arrangements, continue to apply in relation to the financial year beginning on 1st April 2001.

PART VI
SCHEMES
Required content of schemes
     32. 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
     33. 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 34 by -

Additional occasions when schemes require publication
34. For the purposes of paragraph 1(7)(b) of Schedule 14 to the 1998 Act (prescribed occasions on which publication of schemes is required) a scheme shall be published by the local education authority concerned on the coming into force of any revision of it.

Estelle Morris
Minister of State, Department for Education and Employment

15th February 2001

SCHEDULE 1Regulation 5

CLASSES 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 (other than where the restriction is that the grant form part of the local schools budget or the individual schools budget).

     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 -

     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[14] 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 -

11. Expenditure in connection with -

     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[15] 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[16] and other functions relating to child protection.

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

     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[17].

     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 -

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(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 or where the authority are satisfied that factors or criteria in their formula already make suitable provision, the authority shall -

(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[19] 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[20] (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 -

     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 -

21

22

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     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 a 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[24] 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 either -

it would not be reasonable to expect the governing body to meet from the school's budget share.

     32. Expenditure on increases to a school's budget share to which the school is entitled by virtue of the authority's formula under regulation 10 or arrangements under regulation 31 or expenditure on the correction of errors.

     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 -

     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 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 2001, and

Provided that the 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[31].

     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.

2. Subject to paragraphs 3, 4 and 5, the protected level of funding for the financial year beginning on 1st April 2001 for each school to which regulation 20 applies shall be calculated according to the formula -

(a - b)
	× 1.050625 × d
c

Where

"a" and "b" have the values previously ascribed to them by the Secretary of State for the purposes of Schedule 4 to the 1999 Regulations;

"c" is the number appearing to the local education authority to be the number of registered pupils at the school on 15th January 1998 save that if "c" for the purposes of Schedule 4 to the 1999 Regulations was determined by the Secretary of State in accordance with paragraph 4(c) of that Schedule, then, to the extent that it was so determined other than on the basis of full-time equivalent pupil numbers, the local education authority may, if they consider it reasonable to do so, determine "c" substituting corresponding full-time equivalent pupil numbers; and

"d" is the number appearing to the local education authority to be -

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 2001 for the school shall be calculated according to the formula ((e ÷ f) × 1.050625 × g) + ((h ÷ i) × 1.050625 × j).

(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 2001;

"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 2001.

4. The protected level of funding for the financial year beginning on 1st April 2001 for -

Uppingham Community College, Rutland,

Casterton Community College, Rutland,

Vale of Catmose Community College, Rutland, shall be

(a - b)
	× 1.050625 × d
c

Where

"a" is the amount as last determined in respect of the school before 15th December 1998 in accordance with regulation 5 of the Education (Grant-maintained and Grant-maintained Special Schools) (Finance) Regulations 1998[

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"b" is the same as "b" in paragraph 7 of Schedule 4 to the 1999 Regulations;

"c" is the number appearing to the local education authority to be the number of registered pupils at the school on 21st January 1999;

"d" is the number appearing to the local education authority to be -

5. Where a school is to close during the financial year, the protected level of funding shall be the amount determined in accordance with paragraph 2, 3 or 4, as the case may be, divided by 365 and multiplied by the number of days in the period beginning on 1st April 2001 and ending on the day on which the school closes.