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Hypothecated grant funding

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In addition to non-hypothecated funding through the settlement, local authorities receive hypothecated grant funding through a range of specific grants in support of Welsh Government priorities.

The Welsh Government only uses specific grant funding where we consider that is the most effective way to develop particular policy initiatives or priorities. Schools receive the majority of their funding through the local government settlement, meaning they have maximum discretion over how to use budgets to meet their own needs and priorities.

The Welsh Government has a grant protocol with the Welsh Local Government Association under which we consult them on distribution of grants and give proper notice to authorities of timing and amounts of grant funding. 

With all grants we seek to have a proper exit strategy so there are no surprises for schools or local authorities.  If there is a need for funding on an ongoing basis the funding will usually be transferred to the Revenue Support Grant at the end of the life of the grant, typically 3 years.  When a grant is incorporated into RSG, there is no longer a distinct pot (i.e. hypothecated) of funding for the activity, instead, local authorities have discretion to support the initiative formerly funded by the grant in the way they judge appropriate.

Examples of hypothecated grant funding relevant to schools are the Education Improvement Grant for Schools, Pupil Deprivation Grant and the Welsh in Education Grant.

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