Estimating Income and Expenditure. Difficulty is often experienced in estimating income and inevitably a number of assumptions need to be made. A cluster’s SEND resources will, for the first year of the revised funding methodology, be based upon a fixed amount of funding per school and an amount per pupil in the cluster. Other local income sources should also be identified. In preparing second and third year budgets, clusters should use their best estimate of pupil numbers and assume current funding levels per pupil if there is no other early indication. Unless specified by Children’s Services Schools Finance Team, budget plans for second and third years should not include inflation, but should allow for the effects of annual increments on staff costs. It is essential that, as part of the budget process, adequate provision be made for the unforeseen. In addition, provision should be made for future potential major items of expenditure, e.g. staffing adjustment costs. Cluster funds are not currently subject to the Analysis of Balances mechanism. Clusters will not, therefore, have to justify any surplus balances at the end of the financial year. However, clusters should follow good practice guidelines and have clear plan for the use of any reserves.
