02 June 2006
The Department for Education and Skills has pledged to review the new Dedicated Schools Grant following criticism from MPs and local authorities that it prevents funds being targeted at deprived schools and areas.
The grant, which was introduced this financial year, includes minimum funding guarantees to all schools, regardless of their cash reserves or level of deprivation.
But, while councils can redistribute elements of the DSG between different schools and children's services in their areas, they have complained that in practice the high 'floor' implied in the guarantee leaves little left over for those most in need.
One Labour member of the Commons education and skills select committee, David Chaytor, has said the guarantee 'sabotages' previous redistribution movements.
Bury Metropolitan Borough Council, which gave evidence to the committee's inquiry, said the grant involved 'robbing from the poor to give to the rich.'
In a written response to the committee's report, the DfES last week said that it agreed 'that more funding needed to reach deprived schools and pupils. It said it will consider 'ways in which the allocation process might be used to require authorities to target deprivation'.
It has also asked local authorities to report on their current arrangements and allocations as part of a nationwide review.
But councillor Les Lawrence, chair of the Local Government Association's children and young people board, told Public Finance that the problem was multifaceted. A new requirement to consult school forums on funding arrangements made it hard for local authorities to gain the necessary consensus on redistribution.
Also, because each school's grant is based on its spending level the previous year, local authorities now have an incentive not to top up school allocations, as any funds would be taken away from the council's support grant the following year, Lawrence said.
'I understand that the government wants to set the sum that should be spent within schools,' he added. 'But if the government really believes in devolution – or double devolution – it should not hinder local authorities that add to their budgets one year by penalising them the next. They should be allowed to add to it one year, and not the other.'
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