By David Williams
16 December 2010
A government climb-down on additional funding for deprived school pupils has been welcomed – but concerns remain over squeezed education budgets.
Ministers announced allocations for the first year of the £625m pupil premium this week, revealing that it would be distributed at a flat rate of £430 for each child registered for free school meals.
The news is likely to be a relief for head teachers and councils in the most deprived parts of the country, as the government had previously indicated that a higher premium would be paid in areas that had previously received less funding.
As education funding already favours the poorest neighbourhoods in England, there had been widespread alarm that the reforms would redistribute money away from the least well-off.
The flat rate makes this unlikely to happen, although deprivation funding will be available for the first time to pupils from poor backgrounds in generally affluent areas.
Luke Sibieta, senior research economist at the Institute for Fiscal Studies, told Public Finance the new system was ‘simple and transparent’, and could help remove the disincentive for schools to take on pupils from deprived backgrounds.
But the most powerful incentive it provides is for head teachers to ensure every pupil who is eligible for free school meals registers for them, he added.
Sibieta said the measure would do little to end ‘selection by house prices’, where a school’s popularity makes the surrounding area inaccessible to poor families.
He said: ‘Whether you believe the pupil premium provides an incentive to take on more deprived pupils depends on what you think schools’ objectives are – they’re not simple profit maximisers.
‘The critical point about whether it changes things is whether schools are actively trying to weed out poorer pupils – there may be some of that, but only around the edges.’
It is likely that overall funding for schools will be cut in real terms next year, while the pupil premium, which is additional to the general grant for schools, will be frozen in cash terms.
The addition of the pupil premium was intended to increase the overall schools budget by 0.1% in 2011, according to October’s Comprehensive Spending Review. However, that was based on an inflation forecast of 2.4%. Since then, the Office for Budget Responsibility has revised its forecast up to 2.8%, meaning the total funding will fall in real terms.
The National Union of Teachers condemned the settlement. General secretary Christine Blower said: ‘This is not good news for schools, particularly as it comes on top of the cuts already being made by local authorities to the central services provided to schools.
‘We now see that the pupil premium is nothing but a conjurers’ trick. The government is simply moving money around the system. Not only is it not new money, but its pathetically low level means that the impact will be negligible.’
London Councils criticised the flat rate because it did not take into account the higher costs of providing education in the capital. Its executive member for children and young people, Steve Reed, said: ‘Deprived pupils in London will lose out on the benefits in comparison with deprived pupils elsewhere in the country.
‘For example, if a school wanted to use that funding to provide additional one-to-one tuition it would not cover as many sessions for a London child as it would for pupils elsewhere in the country.’
Shadow education secretary Andy Burnham said the premium would simply ‘rob Peter to pay Paul’.
He added: ‘On the day of the Spending Review, the headline was that schools were protected. Hopes were raised but the reality does not match the spin.
‘We know now that there is no extra money so this premium will simply recycle funds from one school to another.’
The pupil premium is set to be worth £2.5bn by 2014. A Department for Education spokesman said that eligibility would widen in coming years and the amount per pupil would also increase.
