By Nick Mann | 18 November 2011
At least one in six schools will have budget cuts of 10% or more if the government pushes ahead with its funding reforms, the Institute for Fiscal Studies today claimed.
In an analysis of the government’s plans to create a ‘simpler and fairer’ school funding system, the economists said that the proposed introduction of a single national funding formula would ‘inevitably’ create ‘large numbers of financial winners and losers’ among schools.
Alongside those facing funding cuts, around one in ten schools would have funding rises of 10% or more, they noted.
Currently schools receive the bulk of their funding via councils, which each set their own funding formula. The IFS analysis said any change from this should be introduced gradually – over a period of ten years or more, to avoid some schools facing ‘significant, sustained losses’.
For example, even a transition period of six years would mean annual cuts of 5% for some schools.
The IFS also noted that there would be significant regional differences in the impact of any funding change, based on the single formula published for consultation by the Department of Education in July 2011.
In particular, it said schools in Liverpool, Wigan, Coventry, Wolverhampton and North East Lincolnshire would be deemed significantly overfunded at present and would face the biggest annual losses.
Conversely, schools in Islington, Derbyshire and Warwickshire would be deemed underfunded and have the largest funding increases.
As a result, the IFS called for the national funding formula to be designed ‘extremely carefully’. To highlight this, it said that the plans consulted on earlier this year would divert funding from secondary to primary schools – reversing current trends where funding is geared towards secondary education.
The IFS explained that if this kind of change was unintended, the DoE could ‘easily’ prevent it by adjusting the proposed ratio of secondary to primary school funding.
Luke Sibieta, senior research economist at the IFS and co-author of the analysis, said: ‘There is little doubt that the school funding system merits reform. An explicit national formula offers significant advantages, including simplicity, transparency and responsiveness of school funding. But change would also bring costs and disruption with large losses for some schools.
‘If the government believes that a national funding formula represents the ideal system, it should begin the transition soon and be more transparent about which schools and local authorities could be most affected.’
