National funding formula: Extra cash for 1,300 remote schools

Small, remote schools are in line for extra NFF cash in 2022-23.

The government has more than doubled a funding pot for small schools in remote areas, with up to 1,300 more schools eligible for the cash next year.

The Department for Education outlined on Monday how NFF cash will be allocated in 2022-23, including what individual schools would receive if every council adopted the “hard” NFF.

Councils still have significant leeway over how cash is passed onto schools, however, with the full NFF rollout delayed earlier this month for at least another three years. Academy trusts will also retain discretion even under the “hard” NFF by using GAG pooling.

Fixing ‘cliff edge’ for remote schools

The DfE also confirmed it had caved into pressure to fix a funding “cliff edge” in sparsity factor funding, which previously saw many small, remote schools missing out by fine margins.

0.2 per cent of the NFF is targeted at small remote schools, recognising they “do not have the same opportunities to grow or make efficiency savings as other schools”.

Schools are only eligible if nearby primary pupils would have to travel two miles and secondary pupils three miles to another school if it closed.

The DfE has now lowered the minimum threshold to 1.6 miles for primaries and 2.4 miles for secondaries, entitling another 500 schools to some cash but not the full funding.

Funding will be gradually tapered off between the old thresholds and the new ones, benefiting more schools but also giving existing recipients greater security over their own funding.

The DfE said it would ensure “marginal differences in sparsity distances do not result in significant differences to a school’s funding,” and reduce the risk of “in-year fluctuations in sparsity eligibility having a significant impact”.

Sparsity factor funding doubled

The changes were announced after a consultation on other reforms also intended to improve the “sparsity factor” of the NFF.

The government will go ahead as planned with the other tweaks, including a £10,000 hike to the maximum amount a school can receive. Primaries are now eligible for up to £55,000 and secondaries £80,000.

It will also base distances on travel by road rather than as the crow flies, enabling at least another 800 schools to access the funds. The DfE said it had “significantly improved the accuracy with which we identify schools’ remoteness”. Officials had previoulsly said they expected 900 to benefit.

Overall £95 million in sparsity funding has been set aside for 2,500 schools in 2022-23, compared to £42 million last year for around 1,200 schools.

“This will provide valuable support to small, remote schools in meeting the financial challenges that they may face due to size and location,” the DfE said in its formal response to the consultation.

But the fact the government is still only operating a “soft” NFF means town hall chiefs can still choose not to use the sparsity factor at all in how they allocate funding.

Separate documents on the wider NFF allocations for 2022-23 show there are “no new restrictions on local authority formulae”,  but some are likely the following year. There is no longer a target date for the “hard” NFF, which would remove all council flexibility.

3 per cent hike to NFF per-pupil funding

The DfE said extra investment meant a 3 per cent uptick in the three “core factors” of the NFF, namely pupil numbers, a lump sum for each school and a pot for additional needs factors.

The minimum per pupil, NFF funding floor and free school meals factors will be increased by 2 per cent, while premises funding will remain flat other than PFI costs rising with inflation.

The DfE also confirmed a £780 million increase in high needs funding would mean a minimum 8 per cent hike per eligible pupil, but said gains would be capped at 11 per cent.

Some technical changes include basing high needs allocations on actual spending in 2017-18, rather than planned spending, and keeping the historic spend factor at 50 per cent.

The government’s “longer term ambition” remains to remove the historic spend factor from the formula, but it acknowledged in response to consultation feedback it could not be removed “without an effective replacement”.

Meanwhile the element of next year’s funding based on low attainment levels will be based on 2019 data because of the lack of 2020 data amid the pandemic.

Every school stands to receive £3,217 a head for primary pupils, £4,536 for years 7 to 9 and £5,112 for years 10 and 11 under the per-pupil factor, which makes up three-quarters of the NFF.

Another 6.4 per cent of the NFF is allocated on a per-school basis, with £121,300 set aside for each school.

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