IFS highlights ‘winners and losers’ following school funding change

22 Mar 17

Some schools in England could be facing a 7% funding cut after 2020 following the roll out of the revised national funding formula, the Institute for Fiscal Studies has warned.

Today’s report by IFS researchers welcomed the “ambitious” plans to implement a rethink for school funding in England but warned there would be winners and losers and there was “significant uncertainty” about what will happen after 2019-20.

Education secretary Justine Greening has said the goal of this policy is to ensure that similar schools all over the country receive a similar and fairer level of funding per pupil.

In order to make the transition run smoothly, the government has proposed protections for schools up until 2019–20, which will ensure no school sees a fall in its budget of more than 3% in cash terms between 2017-18 and 2019-20 (or a real-terms cut of about 6%). 

However, the IFS highlighted that, because a number of schools are currently a long way from their implied formula allocations, only about 60% of schools will be on the main formula by 2019-20.

This means around 1,000, or 5%, of schools would still be more than 7% above the funding level dictated by the main formula, and could expect cuts of that size some point after 2020.

Chris Belfield, co-author of the IFS report, said: “Somewhat inevitably, this reform creates winner and losers, and it comes at a time of severe pressure on school budgets as we are currently in the tightest four-year period for per-pupil spending in English schools since at least the early 1980s.

“The government has put in place transitional protections to help smooth the transition process up to 2019-20. However, there is significant uncertainty about what will happen after 2019-20. This is a big omission considering only 60% of schools will be on the main formula in 2019–20.”

As the consultation on the national funding formula ended today, the Association for Teachers and Lectures union urged the government to put more funding into schools amid claims the sector was in crisis.

General secretary Mary Bousted said: “Despite the government’s claims to the contrary, our schools are facing a funding crisis. There is simply not enough money to go around. The challenges facing our schools are stark. As the National Audit Office and many others have confirmed, our schools will have to make a staggering £3bn in savings a year in real-terms by 2020 due to the significant cost pressures they face.

She added that the revised formula had the potential to target money where is was most ended and to address “historic discrepancies” but the government needs to adequately fund the Department for Education and resist calls to reduce funding focused on deprivation.

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