Explanatory note

These Regulations revoke and replace the Education (Budget Statements) (Wales) Regulations 2002, the Education (Outturn Statements) (Wales) Regulations 2003 and the School Funding (Wales) Regulations 2010 in relation to financial years that commence on or after 1 April 2027. These Regulations make provision for the funding of maintained schools in Wales for those financial years.

Part 1 contains the introductory, revocation and interpretation provisions.

Part 2 deals with the non-schools education budget, the schools budget and the individual schools budget.

Regulation 4 and Schedule 2 set out the expenditure that constitutes the non-schools education budget. This budget relates to the expenditure on local authority functions that the local authority must retain centrally.

Regulation 5 requires the local authority to make an initial determination of the schools budget on or before 14 February immediately preceding a funding period. A “funding period” is defined in section 45(1B) of the School Standards and Framework Act 1998 (“the 1998 Act”) to mean a financial year or such other period as may be prescribed. These Regulations define “funding period” to mean a financial year within the meaning given to that term in section 579(1) of the Education Act 1996.

Regulation 6 defines the schools budget. The schools budget relates to the expenditure that is aimed at supporting schools.

Regulation 7 requires the individual schools budget to be determined on or before 14 February immediately preceding a funding period. A funding period is a financial year. The individual schools budget is defined in regulation 7 and Schedule 3. The individual schools budget is formed by deducting any or all of the expenditure items set out in Schedule 3 from the schools budget. It is for the local authority to decide what expenditure items from Schedule 3 to deduct from the schools budget. Whatever is left remaining in the schools budget after that exercise will form the individual schools budget.

It is a matter for the local authority to determine what to do with the expenditure items deducted from the schools budget and which are not allocated to its individual schools budget. A local authority may determine to retain those expenditure items centrally so that it will be responsible for meeting the cost of them. Alternatively, a local authority may determine to allocate those expenditure items to maintained schools. In which case the local authority will also allocate the funding for those expenditure items to maintained schools who will then be responsible for meeting the cost of them.

Part 3 deals with schools’ budget shares. Regulation 8 requires the individual schools budget to be allocated as budget shares to maintained schools. This means that the individual schools budget must be divided up into school’s budget shares with each maintained school receiving a budget share. Regulation 9 requires an initial determination of the amount of a school’s budget share to be made on or before 31 March preceding a funding period. Regulation 9 further requires the local authority to notify school governing bodies of the amount of their budget shares together with information about how the budget share was calculated and estimates of the budget shares for the following two funding periods.

Regulation 10 requires a local authority to determine a formula for the budget shares. Regulation 11 requires consultation on any changes made to the formula since the preceding funding period. Regulation 12 sets out how a local authority formula is to be published.

Regulation 13 makes provision for the delegated budget of a new school.

Regulations 14 to 26 set out the factors and criteria to be taken into account in determining schools’ budget shares. Regulation 24 makes new provision which allows a local authority to allocate a single budget share to the governing body of the federation and treat the schools as a single school for that purpose.

Regulation 27 allows a local authority to redetermine a school’s budget share in order to correct errors, and regulation 28 allows the Welsh Ministers to approve alternative arrangements to determine schools’ budget shares.

Part 4 deals with local authorities’ financial schemes. Regulation 29 and Schedule 4 specify the matters that must be dealt with in financial schemes.

Regulation 30 sets out how revised financial schemes are to be published and regulation 31 requires any revisions to be approved by the schools forum or the Welsh Ministers.

Part 5 deals with the information about a local authority’s expenditure on education which must be contained in the statement of planned expenditure (“budget statement”) which each local authority is required to prepare before the beginning of each funding period under section 52(1) of the 1998 Act.

In sections 45, 45A, 47 and 48 of the 1998 Act the term “funding period” is used rather than the term “financial year”. Section 45 of the 1998 Act defines “funding period” to mean a financial year or such other period as may be prescribed. However, in section 52(1) of the 1998 Act the term “financial year” is used. For the sake of consistency these Regulations use the term “funding period” throughout. These Regulations define “funding period” to mean a financial year within the meaning given to that term in section 579(1) the Education Act 1996.

Regulation 32 requires that every budget statement must be prepared in two parts as follows—

1. (a)

   Part 1, in the form and containing particulars of planned expenditure for individual maintained schools prescribed in Schedule 5, and

2. (b)

   Part 2, in the form and containing the information with respect to the methodology for determining schools’ budget shares for maintained schools prescribed in Schedule 6.

Regulations 33 and 34 set out how a local authority budget statement is to be published.

Part 6 deals with the information about local authorities’ expenditure on education which must be contained in a statement (“outturn statement”). Each local authority is required to prepare after the end of each funding period an outturn statement by section 52(2) of the 1998 Act.

Regulation 35 specifies the form which outturn statements must take.

Regulation 36 specifies the information to be included in the outturn statement.

Regulations 37 and 38 set out how a local authority outturn statement is to be published.

The Welsh Ministers’ Code of Practice on the carrying out of Regulatory Impact Assessments was considered in relation to these Regulations. As a result, a regulatory impact assessment has been prepared as to the likely costs and benefits of complying with these Regulations. A copy can be obtained from the School Funding Branch, Education Infrastructure, Governance and Finance Division, Welsh Government, Cathays Park, Cardiff, CF10 3NQ.