Pupil premium funds not well targeted or spent, says NAO

30 Jun 15

The pupil premium policy, designed to help the most disadvantaged schoolchildren, is not identifying those who need it the most and is not being spent in the most “appropriate” way by some schools, the public spending watchdog warned in a critical report today.

The National Audit Office concluded that, although the Department for Education uses a clear formula to distribute the pupil premium, not all disadvantaged pupils are being identified. 

Its Funding for disadvantaged pupils report added that pupil premium’s impact was also reduced because some schools failed to focus funds on poor students or use the most cost-effective interventions to raise the attainment levels.

The DfE pays the premium directly to schools as extra funding to raise the attainment gap of disadvantaged children, who tend to have lower attainment levels than their more affluent peers, but the department does not expect the full impact of funding to be felt until 2023, the NAO said.

The attainment gap between disadvantaged and other pupils narrowed by 4.7 percentage points in primary schools and 1.6 percentage points in secondary schools between 2011 and 2014, the report found. But no clear trend has been established and the gap remains wide.

Under the terms of the £2.5bn scheme, schools are allowed to spend the money as they see fit, but the NAO said that the core school funding that the pupil premium supplements was not being “distributed on the basis of need”.

Some schools commonly used teaching assistants, which the NAO estimates has cost around £430m since the introduction of the pupil premium in 2011. Other low-cost interventions were used too infrequently, with just 25% using peer-to-peer learning, the watchdog noted.

However, the NAO said accountability and intervention mechanisms had allowed “schools to waste money” on ineffective activities for many years without effective challenge. 

NAO head Amyas Morse, said: “Early signs are that the pupil premium has potential, but it will take time for its full impact to become clear. As it takes the policy forward, the department will need to review whether spending more in this way would allow it to close the attainment gap more quickly.

“The high degree of local discretion has benefits and costs. Some schools don’t appropriately focus funding on disadvantaged pupils, and some spend funds on activities which are not demonstrably effective.”

Meg Hillier, the new chair of the Public Accounts Committee, said it was “concerning” that some disadvantaged pupils will not receive funding because of how the department identifies them.

“For example, 11% of pupils who are currently eligible for funding do not receive it because their parents do not claim the entitlement for free school meals,” Hillier said.

“The recent introduction of Universal Infant Free School Meals has removed an important incentive for some parents to claim – the department must make sure this does not cause any drop in take-up. Reducing the attainment gap is crucial to tackling poverty.”

A Department for Education spokeswoman said: “The NAO’s report recognises the important role which the pupil premium has had in improving the educational outcomes, and ultimately life chances of some of the most disadvantaged young people.

“However, we know there is more to be done to tackle educational inequality and we will consider the findings of the NAO report carefully.”

  • Judith Ugwumadu

    Judith Ugwumadu joined Public Finance International and Public Finance online as a reporter after stints at Financial Adviser, Global Security Finance and The Sunday Express. Currently, she writes about public finance, public services and economics.

    Follow her on @JudithUgwumadu_

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