School Funding Reform

The government has published the next consultation paper on changes to school funding. Much was made last year of the need for a national funding formula to address the inequalities in funding between areas. The consultation paper then contained quite a few suggestions about how a national formula would work. These were comprehensively demolished by the Institute for Fiscal Studies’ modelling of what their effects would be. Since then little has been heard of the idea. The new document deals with the issue in three lines:

“We will continue to work to develop a national funding formula and assess its impact on schools. This work will enable it to be introduced in the next Spending Review period with minimal disruption for schools”

The reality is that any national formula would create big swings of funding – big winners and big losers. Minimal disruption there would not be! Not something anyone really wants to be doing at a time of shrinking overall budgets – and certainly not a year before the next election!

The main thrust of this paper is to constrain severely local decision making on funding formulae. The critique of current local arrangements is vague and undocumented. Perhaps the most startling justification for change is that “heads are not able to understand easily how their budgets are calculated”. Given heads’ responsibility for budgets of several million each, this is a slightly alarming point of view.

The paper proposes to reduce the number of factors School Forums can use to allocate funding and in several cases prescribes precisely how they are to be used. There is no scope even for School Forums to suggest additional features that matter to local schools.  So, there are now to be only two ways of measuring deprivation. Funding for EAL pupils must last for only three years after arrival. Perhaps the best example of the level of central prescription is when the document asks “should School Forums be able to agree separate funding rates for Key Stages 3 and 4?” Can anyone think of a reason why local Forums should not be free to decide something like that?

For a government whose premise is supposed to be “heads know best”, there is very little evidence of such trust in this paper. The ability of any group of schools to influence their funding formula will be greatly diminished and the power of the Secretary of State will be much increased. And he says he’s doing this because he thinks heads can’t understand anything too complicated!

There is however a big clue in the document as to why this kind of simplification is really needed. The Education Funding Agency has to work out Academy budgets. So it has to use all 150 different local formulae. And it can’t cope. So they have to be made as simple and as similar as possible so the EFA doesn’t make too many mistakes.

The alternative would of course be to have Academy budgets calculated locally by people who know and understand the local formula. Last July’s document actually offered that as an option. It seems to have been quietly forgotten. This Secretary of State would rather fund an unnecessary quango than allow his precious academies to be polluted by any contact with local authorities.

Interestingly, many academy heads will have less financial freedom that those in maintained schools. Those in the big chains are required to use the chain’s central services and funding is held back to pay for the chain’s management and services. In some cases, the chain may even recalculate budgets and ignore locally negotiated formulae. Perhaps we need a campaign to give academies back their freedom!


One Comment on “School Funding Reform”

  1. Paul says:

    Very good points, though I wouldn’t describe the EFA is “unnecessary”. Rather, it is a way to put DfE functions at “arms-length” while keeping them tightly centralised, just like the Funding Agency for Schools circa 1993 but much bigger. And yes, to keep running cost down, the job needs to be made simple.
    I worked on local LMS formula implementation back in those days, and it made good sense to have LOCAL formulae that were intended largely to differentiate schools’ needs. It was always idiotic to try and compress into one formula the variation needed for a sparsely-populated county with that of an inner-city local authority.
    What is grossly wrong is that some areas have such low resource levels that they cannot provide proper support for children with a range of educational needs such as developmental delay or behavioural problems. Then Ofsted have the cheek to say that schools are “over-identifying” SEN when the truth is they are using the only means available to pay for more trained adults in the classroom!
    It’s true to say that the Pupil Premium might address this, but it would need to inject significant extra resources – and not just be used by schools to prop-up their existing budgets. The chances don’t look good. My bet is that children with what Ministers want to call “additional educational needs” who don’t have statements will be the great losers in the forthcoming SEN upheaval and yes, they will tend to be largely working class and often black.