The LEA Budget, Schools Budget and Individual Schools Budget (England) Regulations 2003

• Citation: S.I. 2003/3170
• Sections: 74

Section 1 Citation, commencement, application and interpretation

(1) These Regulations may be cited as the LEA Budget, Schools Budget and Individual Schools Budget (England) Regulations 2003 and shall come into force on 31st December 2003.

(2) These Regulations apply in relation to the financial year beginning on 1st April 2004.

(3) These Regulations apply only in relation to England.

(4) In these Regulations—

(a) “the 1996 Act ” means the Education Act 1996 ;

(b) “the 1998 Act ” means the School Standards and Framework Act 1998;

(c) “the 2000 Act ” means the Learning and Skills Act 2000 ;

(d) “the 2002 Act ” means the Education Act 2002 ;

(e) “the 2002 Regulations ” means the LEA Budget, Schools Budget and Individual SchoolsBudget (England) Regulations 2002 ;

(f) a reference to capital expenditure means expenditure which an authority propose to 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, so far as they are consistent with any such enactment, are generally regarded whether by reference to any generally recognised published code or otherwise, as proper accounting practices to be followed in the keeping of the accounts of local authorities, either generally or of the description concerned ;

(g) a reference to CERA means capital expenditure which an authority expect to charge to a revenue account of the authority as defined in section 41(2) of the Local Government and Housing Act 1989 ;

(h) a reference (however framed) to a community, foundation or voluntary school, a community or foundation special school or maintained nursery school includes a proposedschool which on implementation of proposals for the establishment of the school will be such a school and which has a temporary governing body;

(i) the “Excellence in Cities” and “Excellence Clusters” programmes mean the programmes of that name under which funds are paid to schools by the Secretary of State;

(j) references to expenditure are references to that expenditure net of—

(i) all related specific grants;

(ii) all related fees, charges and income;

(iii) funding received from the Secretary of State in respect of PFI scheme unitary payments; and

(iv) any LPSA grant which the authority propose to apply to an agreed activity or activities in pursuance of targets specified under the relevant Local PublicService Agreement

received by the local education authority;

(k) 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;

(l) a reference to a formula means a formula determined (after consultation) by the local education authority before the beginning of the financial year beginning on 1st April 2004 by which they will determine schools' budget shares in that financial year having regard to factors, criteria and requirements prescribed in regulations made under section 47 of the 1998 Act;

(m) a reference to a governing body includes the temporary governing body of a proposed school falling within paragraph (h);

(n) a reference to LPSA grant is a reference to a grant paid to the authority under section 31 of the Local Government Act 2003 in connection with a Local Public Service Agreement into which the authority has entered;

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

(p) a reference to a particular class or description of expenditure in relation to maintained schools and to pupils registered at such schools shall include any expenditure of that class or description as the authority may incur in relation to Academies and to pupils registered at Academies;

(q) a reference to a PFI scheme unitary payment is a reference to a charge payable by the local education authority under a private finance transaction;

(r) a reference to a primary or secondary school means a primary or secondary school which is a community, foundation, voluntary or maintained nursery school;

(s) a reference to a private finance transaction is a reference to a transaction as defined by regulation 16 of the Local Authorities (Capital Finance) Regulations 1997 ;

(t) a reference to proposals for the establishment of a school is a reference to a proposal for the establishment of the school under section 28 or 31 of, or paragraph 5 of Schedule 7 to, the 1998 Act, section 70 of the 2002 Act, or section 113A of and Schedule 7A to the 2000 Act;

(u) a reference (however framed) to schools maintained by a local education authority does not include schools which are pupil referral units ;

(v) a reference to specific grant means any grant paid to the authority under conditions which impose restrictions on the particular purposes of the authority for which the grant may be used, provided that a specific grant shall not include—

(i) any grant made by the Learning and Skills Council for England under section 7 of the 2000 Act in respect of sixth form funding; or

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

(w) “standards fund grant” means the sum of money paid under that name to a local education authority by the Secretary of State under section 14 of the 2002 Act.

Section 2 Schools Budget

The classes or descriptions of local education authority expenditure specified in paragraphs (a), (b) and (c) (other than expenditure described in regulation 3) are hereby prescribed for the purposes of section 45A(2) of the 1998 Act and the determination of a local education authority’s schools budget, subject to the exceptions in regulation 4 —

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

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

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

Section 3 LEA Budget

(1) Subject to paragraph (2), the classes or descriptions of local education authority expenditure specified in Schedule 1 are hereby prescribed for the purposes of section 45A(1) of the 1998 Act and the determination of a local education authority’s LEA budget.

(2) The classes or descriptions of local education authority expenditure specified in Schedule 1 shall not include any of the following —

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

(b) any expenditure which falls within paragraph 1(2) or 2 of Schedule 3.

Section 4 Exceptions

—A local education authority’s LEA budget or schools budget shall not include the following classes or descriptions of expenditure—

(a) capital expenditure other than CERA;

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

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

Section 5 Individual schools budget

Subject to the provisions of Schedule 2, a local education authority may deduct from their schools budget any or all of the classes or descriptions of planned expenditure set out in Schedule 3, in whole or in part, in order to arrive at their individual schools budget for the financial year.

Section 1 Special educational provision

Expenditure on services provided by educational psychologists.

Section 2 Special educational provision

Expenditure 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).

Section 3 Special educational provision

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.

Section 4 Special educational provision

Expenditure on collaboration with other statutory and voluntary bodies to provide support for children with special educational needs.

Section 5 Special educational provision

Expenditure in connection with—

(a) the provision of parent partnership services or other 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; or

(b) arrangements made by the authority with a view to avoiding or resolving disagreements with the parents of children with special educational needs.

Section 6 Special educational provision

Expenditure 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 .

Section 7 Special educational provision

Expenditure on carrying out the authority’s functions under the Children Act 1989 and under section 175 of the 2002 Act and other functions relating to child protection.

Section 8 Special educational provision

Expenditure incurred in entering into, or subsequently incurred pursuant to, an arrangement under section 31 of the Health Act 1999 .

Section 9 Special educational provision

Expenditure in providing special medical support for individual pupils in so far as such expenditure is not met by a Primary Care Trust , National Health Service Trust , NHSfoundation trust or Local Health Board .

Section 10 School improvement

Expenditure incurred by the authority in respect of action to support the improvement of standards in the authority’s schools, including, in particular—

(a) expenditure incurred in preparing, reviewing and implementing the authority’s education development plan under sections 6 and 7 of the 1998 Act;

(b) expenditure incurred in connection with entering into a contract pursuant to a direction under section 63 of the 2002 Act (contracts to obtain services of an advisory nature in respect of schools with serious weaknesses or schools requiring special measures);

(c) expenditure incurred in connection with the exercise of its functions under sections 14 to 17 of the 1998 Act (powers of intervention, of appointment of additional governors and of suspension of delegated budget in schools causing concern); and

(d) expenditure on the appointment and remuneration of interim executive members under section 16A of the 1998 Act .

Section 11 Access to education

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;

(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 and section 70 of the 2002 Act, or section 113A of, and Schedule 7A to, the 2000 Act;

(c) the authority’s functions in relation to the exclusion of pupils from schools or pupil referral units, excluding the making of any provision of education to such pupils, but including advice to the parents of an excluded pupil;

(d) school organisation committees;

(e) the authority’s functions under section 509 and 509AA to 509AC of the 1996 Act (home-to-school and home-to-college transport); and

(f) the authority’s functions under sections 510 and 514 of the 1996 Act (provision and administration of clothing grants and boarding grants), and pursuant to regulations made under section 518(1)(c) of the 1996 Act.

Section 12 Access to education

The Education Welfare Service and other expenditure arising from the authority’s functions under Chapter II of Part VI of the 1996 Act (school attendance).

Section 13 Access to education

Expenditure on the provision of support for students under section 1(1) of the Education Act 1962 and under section 22 of the Teaching and Higher Education Act 1998 .

Section 14 Access to education

Expenditure on discretionary grants under section 1(6) or 2 of the Education Act 1962 (awards for designated and other courses).

Section 15 Access to education

Expenditure on the payment to persons over compulsory school age of allowances pursuant to regulations made under section 518(1)(b) of the 1996 Act (educational maintenance allowances).

Section 16 Access to education

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

Section 17 Access to education

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

Section 18 Access to education

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

Section 19 Further education and training for young persons and adults

Expenditure on the provision of education and training and of organised leisure time occupation and other provision under sections 15A and 15B of the 1996 Act .

Section 20 Further education and training for young persons and adults

Expenditure on the provision by the local education authority under sections 15A and 508 of the 1996 Act of recreation and social and physical training, and on the authority’s provision of services under section 116 of the 2000 Act to encourage and enable the participation by young people in education and training.

Section 21 Strategic management

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, including expenditure on any single education plan;

(c) functions of the authority under Part I of the Local Government Act 1999 (Best Value) and the provision of advice to assist governing bodies in procuring goods and services with a view to securing continuous improvement in the way the functions of those governing bodies are exercised, having regard to a combination of economy, efficiency and effectiveness;

(d) revenue budget preparation; the preparation of information on income and expenditure relating to education, for incorporation into the authority’s annual statement of accounts; and the external audit of grant claims and returns relating to education;

(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—

(i) expenditure which is not met from schools' budget shares; and

(ii) expenditure in respect of schools which do not have delegated budgets,

and all financial administration relating thereto;

(g) expenditure incurred in connection with the authority’s functions under section 27 of the 2002 Act (provision of community facilities by governing bodies);

(h) 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 ;

(i) expenditure incurred in relation to the authority’s functions under regulations made under section 44 of the 2002 Act ;

(j) recruitment, training, continuing professional development, performance management and personnel management of staff who are funded by expenditure not met from schools' budget shares and who are paid for services carried out in relation to those of the authority’s functions and services which are referred to in paragraphs of this Schedule;

(k) investigations which the authority carry out of employees or potential employees of the authority or of governing bodies of schools, or of persons otherwise engaged or to be engaged with or without remuneration to work at or for schools;

(l) 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;

(m) 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;

(n) advice, in accordance with the authority’s statutory functions, to governing bodies in relation to staff paid, or to be paid, to work at a school, and advice in relation to the management of all such staff collectively at any individual school (“the school workforce”), including in particular advice with reference to alterations in remuneration, conditions of service and the collective composition and organisation of such school workforce;

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

(p) the authority’s functions regarding the appointment or dismissal of employees;

(q) consultation and functions preparatory to consultation with or by governing bodies, pupils and persons employed at schools or their representatives, or with other interested bodies;

(r) compliance with the authority’s duties under the Health and Safety at Work etc. Act 1974 and the relevant statutory provisions as defined in section 53(1) of that Act in so far as compliance cannot reasonably be achieved through tasks delegated to the governing bodies of schools; but including expenditure incurred by the authority in monitoring the performance of such tasks by governing bodies and where necessary the giving of advice to them;

(s) the investigation and resolution of complaints;

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

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

(v) the preparation, modification and revision of an early years and childcare development plan for their area under sections 120 and 121 of the 1998 Act and the provision of (but not the expenditure authorised by) an early years development and childcare partnership under section 119 of the 1998 Act ;

(w) 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;

(x) the authority’s duties under article 4(2) and (5) of the Race Relations Act 1976 (Statutory Duties) Order 2001 ;

(y) the remittance of fees payable to the General Teaching Council for England by virtue of section 4(4) of the Teaching and Higher Education Act 1998 and the provision of information required by the Council pursuant to regulations made under section 12 of that Act;

(z) expenditure incurred in connection with the authority’s functions pursuant to regulations made under section 12 of the 2002 Act (supervising authorities of companies formed by governing bodies); and

(aa) expenditure incurred in connection with the authority’s functions under the Disability Discrimination Act 1995 in so far as compliance cannot reasonably be achieved through tasks delegated to the governing bodies of schools; but including expenditure incurred by the authority in monitoring the performance of such tasks by governing bodies and where necessary the giving of advice to them.

Section 22 Strategic management

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 partly but not solely for the use of schools.

Section 23 Strategic management

Expenditure on establishing and maintaining those electronic computer systems, including data storage, which are intended primarily to maintain linkage between the authority and its schools.

Section 24 Strategic management

Expenditure on monitoring National Curriculum assessment arrangements required by orders made under section 87 of the 2002 Act.

Section 25 Strategic management

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.

Section 26 Strategic management

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 except to the extent that these are chargeable to schools' budget shares.

Section 27 Strategic management

Expenditure in respect of a teacher’s emoluments under section 19(9) of the Teaching and Higher Education Act 1998.

Section 28 Strategic management

Expenditure in respect of the functions of an appropriate body under regulations pursuant to section 19(2)(g) of the Teaching and Higher Education Act 1998 .

Section 29 Strategic management

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.

Section 30 Strategic management

Expenditure on making pension payments other than in respect of schools.

Section 31 Strategic management

Any expenditure on insurance other than for liability arising in connection with schools or school premises.

Section 1

Subject to paragraphs 2 and 3, the total amount to be deducted from an authority’s schools budget (the “central expenditure”) in accordance with regulation 5 of these Regulations in order to arrive at their individual schools budget, shall not exceed (A - B) (or 0 if that is greater) + (C × D/E) where—

A is the total amount of the schools budget for the financial year beginning on 1st April 2004 less the total amount of the schools budget for the financial year beginning on 1st April 2003, excluding any London Budget Support Grant paid by the Secretary of State to the authority under section 14 of the Education Act 2002,

B is the schools block in the education element of the formula spending share for the authority for the financial year beginning on 1st April 2004 less the schools block in the education element of the formula spending share for the authority for the financial year beginning on 1st April 2003 ,

C is the total amount initially deducted from the authority’s schools budget in accordance with regulation 5 of the 2002 Regulations excepting that deducted in accordance with paragraphs 1 to 3 of Schedule 2 to those Regulations,

D is the total amount of the individual schools budget as initially determined in accordance with regulation 5 of these Regulations together with the total amount of any funds devolved to schools from the standards fund grant and under the Excellence in Cities or Excellence Clusters programmes, and

E is the total amount of the individual schools budget for the financial year beginning on 1st April 2003 as initially determined in accordance with regulation 5 of the 2002 regulations together with the total amount of any funds devolved to schools from the standards fund grant and under the Excellence in Cities or Excellence Clusters programmes,save that any grant paid by the Learning and Skills Council for England to the authority under section 7 of the 2000 Act shall be excluded from the calculation.

Section 2

(1) Where any maintained school in the authority’s area is due to be discontinued and re-open as an Academy in the financial year commencing on 1st April 2004, an amount equal to F x (G/12) shall be deducted from E, where—

F is the number of months during the financial year beginning on 1st April 2004 in which the school is not to be maintained by the authority, and

G is the total budget share of that school for the financial year beginning on 1st April 2003 together with the total amount of any funds devolved to the school from the standards fund grant and under the Excellence in Cities or Excellence Clusters programmes.

(2) An amount equal to any sum deducted in accordance with paragraph 24 of Schedule 2 to the 2002 Regulations in respect of expenditure on maintained nursery schools in the financial year beginning on 1st April 2003, shall be added to E. But if any such maintained nursery school will cease to be maintained on or before 31st August 2004 the amount to be added to E shall not include any expenditure on such a school.

Section 3

In calculating the limit on central expenditure imposed by paragraph 1, expenditure deducted in accordance with—

(a) paragraphs 1, 2 and 3 of Schedule 3 to these Regulations,

(b) paragraph 25 of Schedule 3 to these Regulations, to the extent that this exceeds expenditure deducted in accordance with paragraph 24 of Schedule 2 to the 2002 Regulations except in respect of maintained nursery schools, and

(c) paragraph 32 of Schedule 3 to these Regulations

shall be disregarded.

Section 1 Expenditure to support grants

(1) Expenditure (other than expenditure incurred in connection with any other paragraph of this Schedule or any paragraph of Schedule 1) which the authority is obliged to incur as a condition of a specific grant paid to the authority and which is taken into account in determining the amount of such specific grant.

(2) Any amount which the authority is obliged to make available as a condition of grant paid under section 14 of the 2002 Act or under section 484 of the 1996 Act and which is taken into account in determining the amount of such grant, decisions regarding the expenditure of which are delegated to the governing body of a maintained school.

Section 2 Excellence in Cities

Expenditure pursuant to a partnership agreement (under the Excellence in Cities and Excellence Clusters programmes) made between the authority, the Secretary of State and one or more of the authority’s schools.

Section 3 Performance Reward Grant

Expenditure, not falling within any other paragraph of this Schedule or any paragraph of Schedule 1, which the authority propose to meet from grant made under section 31 of the Local Government Act 2003 to reward local authorities for improvements in local services.

Section 4 Special educational provision

Subject to paragraphs 5 and 6, 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.

Section 5 Special educational provision

Where a pupil falls within paragraph 4(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.

Section 6 Special educational provision

Expenditure in making the provision specified in a pupil’s statement of special educational needs where the pupil falls within paragraph 4(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.

Section 7 Special educational provision

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 within the scope of School Action Plus as described in the Code of Practice issued 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).

Section 8 Special educational provision

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).

Section 9 Special educational provision

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.

Section 10 Special educational provision

Expenditure (other than expenditure incurred under Schedule 1 or any other paragraph of this Schedule) incurred on services required to implement a plan setting 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 and on other activities for the purpose of avoiding the exclusion of pupils from schools.

Section 11 Special educational provision

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.