Morgan consults on replacement for “outdated” school funding formula

7 Mar 16

Education secretary Nicky Morgan has set out more details of reforms to the funding formula for schools, which will remove local authorities from any role in the distribution of resources.

Morgan said under the current system a school in one part of the country could receive over 50% more than an identical school with exactly the same children because of an accident of history – for example, pupils in Rotherham each receive £500 per year more in funding than those in Plymouth, even though they have similar levels of need.

This is because the current funding system had not kept pace with demographic shifts over the last decade, such as changes to the numbers of pupils eligible for free school meals.

“The introduction of a national funding formula from 2017/18 will see the biggest step towards fairer funding in over a decade - ensuring that pupils get funding that genuinely matches their need. It will also ensure that pupils from disadvantaged backgrounds continue to receive significant additional funding to overcome entrenched barriers to their success,” Morgan said.

According to the consultation, the new national formula will be based on four elements – a basic per pupil funding, funding for additional needs including deprivation and English as an additional language, school costs, and area costs.

Under the plans, all funding will be given directly to schools. Currently, academy schools receive their funds from the DfE’s Education Funding Agency, but councils remain the funding distributor for maintained schools, which includes a majority of primary schools. There will now be a two-year transition period to the new regime, although councils will retain a funding role in areas with "high-level special educational needs”.

A national funding formula for schools will remove the role of the local authority in determining how much funding schools are allocated, the Department for Education's consultation stated, which would also ensure that funding gets straight to the frontline, giving headteachers more certainty over future budgets.

Commenting on the consultation, Labour’s shadow education secretary Lucy Powell said that while the principle was right, “the devil will be in the detail”.

“Even before any changes to the funding formula, all schools will see their budgets cut by at least 8% in real terms over the next five years, having a huge impact on teaching and frontline resources,” she stated.

"The Tory government has dodged the difficult questions about school funding ahead of this year’s elections because they know that many parts of the country, including London where they face a key election, will lose even more from schools budgets. Now that they’ve fired the starting gun on a funding review, they should get on with the detail and not leave schools in the dark.”

The National Union of Teachers called for a proper debate on the best way to fund schools, including on the proper role for local authorities who are best placed to oversee where funds need to be directed.

General secretary Christine Blower said no schools are over-funded, so reallocating inadequate resources will simply shunt funding problems around the system.

“The government’s so-called ‘fair funding’ proposals will impose huge funding cuts on many schools unless additional funding is made available. Schools are already suffering real terms cuts to per pupil funding, at the same time as having to cope with the significant additional costs imposed on schools through pensions and National Insurance changes. Many schools are already cutting back on staff and increasing class sizes. Teachers’ pay continues to fall behind other graduate professions despite increasing problems with teacher recruitment and retention.”

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