At the Schools Finance Group (SFG) meeting in November 2023, concerns were raised that Mutual Fund reimbursement had been static for a number of years, whilst staff costs had substantially increased during this time. The Mutual Fund Board requested modelling of reimbursement rates equal to actual staffing cost as well as the premiums needed to cover those costs.
At the SFG meeting on 12th January 2024, the Mutual Fund Board received the following information (1.1 to 1.4) :
1. Reimbursement rates
1.1. Reimbursement rates have not been updated for many years and are now very low compared to actual staff costs:
| Current | |||
| Option A – 100% | Option B – 120% | Option C – 80% | |
| Reimbursement for teaching staff | £136.68 | £164.02 | £109.34 |
| Reimbursement for support staff | £56.10 | £67.32 | £44.88 |
| Reimbursement for support staff Extra | £33.66 | £40.39 | £26.93 |
| Model A | |||
| Option A – 100% | Option B – 120% | Option C – 80% | |
| Main Pay Scale 6 plus on costs – 38 weeks | £303.34 | £364.01 | £242.68 |
| Bottom of D grade SP 8 plus on costs – 40 weeks (Combining support staff into one) | £161.20 | £193.44 | £128.96 |
| Increase from Current Model to Model A | % Increase from Current Model to Model A | |||
| Option A – 100% | Option B – 120% | Option C – 80% | All Options | |
| Teaching Staff | £166.66 | £200.00 | £133.33 | 122% |
| Support Staff | £105.10 | £126.12 | £84.08 | 187% |
1.2. Based on the premiums received for 2023/24 and the claims paid for the year to date, premiums would have to increase by 126%:
| Current | ||||||
| Teaching | Support | |||||
| Option A – 100% | Option B – 120% | Option C – 80% | Option A – 100% | Option B – 120% | Option C – 80% | |
| Primary Schools | £303.32 | £363.98 | £242.66 | £152.76 | £183.31 | £122.21 |
| Secondary Schools | £160.60 | £192.72 | £128.48 | £125.15 | £150.18 | £100.12 |
| Special Schools | £473.36 | £568.03 | £378.69 | £217.72 | £261.26 | £174.18 |
| Model A | ||||||
| Teaching | Support | |||||
| Option A – 100% | Option B – 120% | Option C – 80% | Option A – 100% | Option B – 120% | Option C – 80% | |
| Primary Schools | £686.35 | £823.63 | £549.08 | £345.67 | £414.80 | £276.53 |
| Secondary Schools | £363.41 | £436.09 | £290.73 | £283.19 | £339.83 | £226.55 |
| Special Schools | £1,071.12 | £1,285.35 | £856.90 | £492.66 | £591.19 | £394.13 |
1.3. The following options have also been modelled:
| Reimbursement Rate | Premiums % Increase |
| As per Model A | 126% |
| 80% of Model A | 82% |
| 60% of Model A | 38% |
| 50% of Model A | 16% |
1.4. Options for increasing the reimbursement rates from 1st of April 2024 include, but are not limited to:
a) Increase current premiums by 5% each year to slowly step to one of the options in paragraph 1.3 above.
b) Keep the current rates and in addition add one of the options in paragraph 1.3 above.
The modelling showed schools are receiving well below what they would expect to receive as an ‘insurance’ against staff absence and that premiums would need to be significantly increased to fund increases to the modelled rates.
Alongside this, the LA is no longer able to administer the fund for free and would be requiring a salary cost of £43,000 be added to the premiums to allow for a member of staff to manage the fund on schools behalf.
As a result of the above, the Mutual Fund Board proposed to close the Mutual Fund as at 31 March 2025. For 2024/25 the fund will continue and information for renewals will be sent in a separate communication.
The board considered the various options for closing down the fund during 2024/25 in a responsible way and asked the LA to consider the unintended consequences of closing down the Mutual Fund. This work is currently being undertaken.
Further updates will be sent out in due course.