Early review for school funding

8 Mar 01
A new education funding system could be in place by next year after a decision to fast-track changes to the existing school finance mechanism.

09 March 2001

Last year's green paper on local government finance suggested that the earliest possible date for introducing a revised funding regime was 2003/04. While this date is likely to remain for councils' other services, Public Finance understands special efforts are being made to speed up the changes to school finances.

A new education funding strategy group, including representatives from local and central government and the unions, met for the first time at the end of February.

Public Finance understands that a 'fully worked-up' proposal for a new funding system is expected by June so that it can be included in the government's white paper on local government finance reform later in the year. The aim is to implement the new education system for 2002/03.

A spokesman for the Department for Education and Employment confirmed the target. He said the green paper's 2003/04 deadline was for 'change backed by legislation'. He added: 'We can do a lot of changes to the education funding system without primary legislation.'

Bringing the new education system on stream a year ahead of schedule would answer concerns about continuing the freeze on the Standard Spending Assessment formula, which produces a huge disparity in funding levels per pupil around the country.

Education dominated the responses to the government's finance green paper, summarised in a publication from the Department of the Environment, Transport and the Regions this week. More than 14,000 of the 16,300 responses were part of a campaign by the Fair Education Funding Forum, made up of the lowest-funded education authorities.

The new strategy group is examining how funding for schools and local education authorities can be separately identified and how a basic entitlement for each pupil should be derived.

The green paper responses show huge support for allowing councils to raise more of their own income.

'This helps us make our case,' said Mike Heiser, the Local Government Association's finance policy officer. 'We won't change government's mind overnight, but there have been some signs from officials and ministers that they accept the need for discussion on the balance of funding.'

Councils voted six to one against the idea of basing funding on local authorities' own plans. But there was almost unanimous support for abolishing the requirement for councils to seek government permission to borrow.


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