National funding formula: Councils MUST use minimum per-pupil funding levels from 2020-21

Councils will be ordered to pass on new minimum per-pupil funding levels to schools from next year as the government finally seeks to “harden” its new national funding formula.

Although councils will continue to set their own local funding formulae in 2020-21, the government will make the use of its new minimum per-pupil funding levels by town halls compulsory.

It comes after Gavin Williamson, the education secretary, pledged to move to a hard national funding formula “as soon as possible” following years of delays to its implementation.

Under a pledge made by new prime minister Boris Johnson during his leadership campaign and confirmed last week by the chancellor Sajid Javid, minimum per-pupil funding rates will rise from £3,500 to £3,750 at primary level and from £4,800 to £5,000 at secondary from next September. The primary funding rate will then rise again to £4,000 in 2021-22.

In a written ministerial statement, schools minister Nick Gibb said councils will be forced to implement them from next year, describing the move as “a first step towards hardening the formula”. By forcing councils to use the minimum levels, the government will seek to avoid the sort of criticism frequently levelled at ministers about the current system, which doesn’t require the minimum amounts to be passed on to schools.

Now the Department for Education has published a consultation on its plans, which will involve schools that fall below the minimum levels in 2020-21 being “topped up” with additional funding. The consultation “focuses on how best to implement this change, seeking views on technical and operational arrangements, while also providing an opportunity for respondents to raise any wider issues”.

“In 2020-21 local authorities will continue to have discretion over their schools funding formulae and, in consultation with schools, will ultimately determine allocations in their area,” said Gibb in a statement published yesterday.

“However, as a first step towards hardening the formula, from 2020-21 the government will make the use of the national minimum per pupil funding levels, at the values in the school NFF, compulsory for local authorities to use in their own funding formulae.”

The national funding formula officially came into being in 2017 with an initial transition period of two years in which councils were to continue to allocate funding based on local formulae.

The intention was that the full national formula would be rolled out from September 2020, but its “hard” implementation was delayed last year after 73 of the 152 council areas moved their funding plans “closer” to what is proposed nationally and a further 41 brought in funding settlements “mirroring the NFF factor values almost exactly”.

Speaking in Parliament last week, Williamson said: “I can reaffirm our intention to move to a hard national funding formula, where schools’ budgets are set on the basis of a single national formula, as soon as possible.

“We recognise that this will represent a significant change and we will work closely with local authorities, schools and others to make the transition as smooth as possible. We are determined that no pupil will be held back from reaching their full potential.”

The DfE will publish illustrative school level allocations and provisional local authority level allocations in October.