The Department for Education had “no formal process” to guard against a funding error that slashed indicative school budgets by £370 million, an independent review has found.
Accountant Peter Wyman concluded that “had opportunities to sense check for errors been taken the error should have been avoided”.
DfE permanent secretary Susan Acland-Hood admitted in early October that an error in calculations meant allocations sent out to schools in July would have inflated the schools budget by 0.62 per cent, or £370 million.
As a result, the department was forced to revise down its estimate for an increase in per-pupil funding in 2024-25 from 2.7 to 1.9 per cent.
Wyman’s report, published today, reveals how pupils in two new local authority areas were not included in government calculations, and that the error would have been detected had formal quality assurance processes been in place.
Cumbria was replaced in April of this year by two new councils – Cumberland and Westmoreland & Furness.
‘Coding mismatch’ missed new councils in funding calculations
However, due to a “coding mismatch…no pupils for the old Cumbria or the new Cumberland and Westmoreland & Furness local authorities” were included in calculations.
This meant that the total schools budget for 2024-25 was spread over a smaller number of pupils, meaning per-pupil funding was artificially
“There was no formal process to ensure there was no such mismatch. Since an overall reduction in pupil numbers was expected, alarm bells were not triggered by the total pupil numbers that resulted.
“At this stage of the process checks should have been in place which would have detected the error.”
Wyman, who is chair chair of NHS Blood and Transplant, added that “checks later in the process, including tests like doublerunning the calculation, assumed these inputs were correct”.
This meant the “error was not detected” until October.
He said the model “must be subject to more critical examination, sense checking and error trapping, to ensure the accuracy” of the figures.
All DfE data “on which business critical processes rely … should be subject to the same rigorous quality assurance processes as are applied to information formally published”.
“Processes that repeat on a regular basis should be subject to periodical, if not annual, internal review, to identify potential opportunities to simplify or reduce the steps involved, thereby reducing the chance of errors,” Wyman stated.
DfE praised for ‘learning culture’
After the mistake was found in October, Acland-Hood issued an apology. Education secretary Gillian Keegan asked her to conduct a formal review of processes “with external and independent scrutiny”.
Wyman “was impressed by the thoroughness” of the internal review, as well as “the obvious openness of the various officials involved in the original work”.
“Rather than being defensive, and seeking to blame others for mistakes, it is clear a learning culture exists in the sections of the Department I encountered,” his report explained.
Then schools minister Nick Gibb announced two months ago that Wyman, a former chair of the Care Quality Commission, would lead the probe into the quality assurance process surrounding national funding formula calculations.
A former government special adviser and PWC accountant, Wyman also chaired an independent review of debt funding advice in 2018.
Gibb said he recognised “the correction of the NFF [national funding formula] error will be difficult for local authorities and frustrating for some school leaders, which is why the department has rectified the error as quickly as possible”.