School funding

£40m ‘hardship fund’: Council schools in just 35 areas to get help

Government also confirms the cash to help schools afford teacher pay rise will be for one year only

Government also confirms the cash to help schools afford teacher pay rise will be for one year only

26 Oct 2023, 11:28

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Local authority-maintained schools in just 35 areas will get “hardship fund” support to help them deliver 6.5 per cent teacher pay rises – and the cash is for one year only.

The government announced a £40 million pot to help schools “facing the greatest financial challenges” as part of its teacher pay deal.

While ministers said the pay rise was “affordable” nationally, they recognised that it would be unaffordable for some schools at an individual level, with smaller and special schools worst hit.

£40m hardship fund only for one year

Academies will have access to £20 million, which will top up the existing support offered to those in financial difficulty. Academies can apply to the Education and Skills Funding Agency for help.

The remaining £20 million will cover schools overseen by councils.

However this cash has been “targeted” for just those local authorities with aggregated school-level deficits that total more than one per cent of their schools’ income.

Liverpool, North Tyneside and Worcestershire – the only authorities set to receive more than £1 million – have been earmarked the largest amounts from the one-off package (see table at end of article for full list).

DfE stated it wants council chiefs to use the cash to “best support their schools in the individual circumstances in which they find themselves”. They will be given “significant flexibility over how this funding can be used”.

Councils to allocate money ‘on case-by-case basis’

But the guidance added: “This does not mean that every school with a deficit within that local authority should be given additional funding.

“We expect funding to be allocated on a case-by-case basis, taking into account the severity of the school’s position and prioritising those in greatest need.”

But it stressed the allocations are not solely intended to cover schools which are in deficit as a result of the 2023 teachers’ pay award”.

It is to help leaders facing “substantial overall financial challenges”, which may be driven by other factors.

However guidance published this morning also states the government “has no plans” to hand out similar funding in the next financial year – meaning schools will have to soak up the extra costs.

LAs ‘must be transparent’ with hardship fund

The DfE confirmed in the summer teacher pay rises of 6.5 per cent which halted the strikes.

Ministers promised to provide schools with extra funding to cover 3 per cent of this, which equated to £525 million in 2023-24 and £900 million in 2024-25.

The government first announced it would launch the £40 million “hardship fund” in July.

There were few details about it revealed at the time, but education secretary Gillian Keegan said she recognised funding for the deal “will not mean that no school will face financial challenges”.

Today’s guidance said any local authority that does not spend its share of the eight-figure sum over this financial year will be able to combine it with it dedicated schools grant cash or use it in 2024-25.

It also instructed councils to “demonstrate transparency in the use” of the money. This can be done by including breakdowns in published reports to schools forum meetings.

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