Nicky Morgan launches consultation on national fair funding formula for schools

School funding will be delivered via a national funding formula from 2017, the terms of which will be established during a series of consultations launched by the education secretary today.

The proposals will end historical inequalities in the funding system which have led to schools in some parts of the country receiving an average of £6,300 per pupil while others get as little as £4,200. Such discrepancies exist because funds are still distributed on the basis of historic calculations made when the demography of some regions looked very different to now.

Today’s consultation proposes giving schools a flat per-pupil fund and topping it up based on individual pupil needs (such as low attainment), “school costs” and “area costs”.

In a statement, Nicky Morgan said the funding formula will be “the biggest step towards fairer funding in over a decade – ensuring that pupils get funding that genuinely matches their need”.

She added that pupils from disadvantaged backgrounds will “continue to receive significant additional funding to overcome entrenched barriers to their success”. The Conservative Party promised in its manifesto at last year’s general election to continue funding the Pupil Premium, an additional top-up fund for children on free school meals.


The role of local authorities

The planned change means that local authorities (LAs) will play a diminished role in the handing out of school funds. At present, LAs are able to decide how school funds are distributed across a local area, which can lead to large discrepancies.

According to the government, a secondary pupil with low prior attainment attracts £2,248 of additional funding in a Birmingham school, compared to just £36 in Darlington. In other local authorities, these pupils do not attract any additional funding.

However, the education secretary said that local authorities will continue playing “a vital role in the distribution of high needs funding as they are best placed to make important local decisions about children with special educational needs and disabilities”.


What will be in the national funding formula?

The consultation proposes four factors be taken into account when allocating school funding:

Basic per pupil funding – a core allocation for the cost of teaching all pupils

Funding for additional needs – including deprivation, low prior attainment and English as an additional language

School costs – including fixed costs and those related to schools serving rural communities

Area costs – ensuring that additional funding goes to schools in parts of the country where costs for infrastructure are highest


What is the timescale for change?

The government has said this initial consultation will agree the factors to be included in the formula. Once those have been determined, a further consultation will seek views on the weighting of the various factors. It is only in the later consultation that the full impact of the formula on areas across the country will be revealed.

Several senior political figures, including Councillor Ivan Ould – chair of the f40 campaign which has fought for the formula changes – last week speculated that concerns over the London mayoral elections were delaying announcements about the formula. It is believed London boroughs could be among the biggest losers in the formula changes.

A Department for Education spokesperson said at the time that the allegations were “irresponsible” adding that the government was due to consult and would be encouraging people to take part.


Spreading cash, but not adding to it

Although the re-distribution of money has been welcomed by many school leaders, primary head teacher Lyn Knapp last week warned a Westminster conference that budgetary pressures were growing – and without more cash finding its way into education, rather than existing funds being redistributed, schools would struggle.


Changes to national insurance and pensions have cost her school an extra £88,000 per year but no extra money is forthcoming. The government has so far only pledged to maintain and protect school spending until 2020, but not increase it.


The consultation can be viewed here.


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  1. Kevin Quigley

    Well some of us have been waiting for this for a very long time. Our school was one of the worst funded large primaries in England. Last year the local funding formula changed so we had a very welcome increase but that has been entirely wiped out by increases in NI and pensions. Frankly, if we could get a couple of hundred pounds per child extra it would mean a huge difference for us.

    But the cynic in me is waiting for the sting in the tail. What conditions will accompany this change (which for most non city schools should mean an increase in budget)? Forced academisation?

    • How quickly increases come through will depend entirely on the speed with which the government proposes to cut funding from other schools, since DfE clearly doesn’t believe that this policy warrants additional funding. I’m sure they will get huge complaints – half the schools will say they shouldn’t have funding cut, and the other half will say their increases should come more quickly.
      What is also a concern is whether there will be any joining up between High Needs funding and Schools Block funding, otherwise schools may find they have to absorb more of the support costs for pupils with SEND – if LAs can’t move funding between the blocks to cover pressures, highly inclusive schools and those with specialist provision might suffer, but everyone will have to manage more of the lower level SEN costs.

      • Alistair Thomas

        It’s true that there probably won’t be new money applied to this although the government is always finding new money for political projects. For example, the fair funding top-up was £390M – it was new money. Universal Infant FSM apparently cost £1B / year for 3 years + another £1B of capital investment. UIFSM will be of marginal benefit, Fair Funding is likely to be transformational, yet you can see, fairness has not been top of the government’s list, at least not until now.

        One missing piece from these “principles” is education services, which underpin all of the funding blocks (EY, Schools and Post 16 – High Needs is really a service supporting other blocks too). How can you consult properly on education (not just schools) if you miss out a vital part of the discussion?

        It’s an important part of the piece for another reason too. Services are about to be cut by 75% creating a “saving” of £600M. Put aside for a moment that this is an insane idea because services are one area of funding where there is no duplication, this “saving” will be used to mitigate the rebalancing by boosting the lowest funded, reducing the amount the well funded have to lose. It’s all creative accounting of the worst kind. It’s also not enough to level the playing field.

        Now, there is £2.5B in the schools formula for deprivation (IDACI and FSM) and £2.5B in Pupil Premium aimed at the same need. The former isn’t accounted for specifically unlike PP. It may well be used as general funding for all anybody knows. Remove this duplication and that would go a long way to rebalance things.

        I doubt LAs will have any part in allocation let alone the ability to move funds between blocks. The whole point of a national formula is that block funding is determined by pupil factors and numbers. HCLI SEN is supposed to have its own formula and should therefore be fair and fully funded. One of the findings of the recent HN consultation was that the whole concept of “notional SEN” where some proportion of non HN factors in the schools block could be conflated with High Needs support “already in the budget” was broken. There are no HN funds in the schools block. The LCHI SEN (the LPA factor) is for completely different strategies operated by mainstream staff. The specialist resources for HCLI SEN interventions have to come on top of the schools budget. Again, national formulae should make this a lot clearer because 151 LAs will not be making it up as they go along. One consequence of all this transparency / consistency is that we may find that we have been underfunding HCLI SEN as a nation.

        There’s a lot to talk about. I hope everyone will get engaged, inform an opinion and give it to government because they are sorely in need of some basic common sense and good advice.

  2. John Connor

    Launching the consultation is one thing, but while there’s a Tory candidate for London mayor, the actual formula won’t emerge until it’s obvious that London is a lost cause for the Tories. They’re not going to give London boroughs a kicking before that election.

  3. If this is like Nicky Morgan’s plan to reduce teacher workload it will be a long time coming. She is fast becoming the queen of over promising and under delivering.

    Perhaps the DfE will issue new advice to Primary Schools on the KS2 English Curriculum and the meaning of specific words.

    Definition: Consultation.
    Something which looks like you are doing something. Allows you to fend off complaints and kick the issue into the long grass. If you do actually do something you totally ignore all the views that you have received from the people who actually know something about the issue, and accept the advice of your mates who went to the same school that you did.

  4. Alistair Thomas

    If this consultation is going to be about principles, then the first principle to be established is: Is this going to be just about schools again or are we going to look at all education funding for 0 – 19. Early Years is a vital part of education. Post-16 is too, but apparently it already has a national formula …

    They ask: “What should be in the formula?”. Well since Post-16 already one maybe we should just adopt that one with different rates – job done. But wait, does the Post-16 formula have factors for Basic entitlement, special needs and cost adjustment? Actually, I don’t know the full answer here, but the little I do know about Post-16 is that despite facing deprivation, LCHI SEN and EAL challenges, just like all other education phases, that formula just isn’t designed that way. Since we’re being asked about the ideal structure of a funding block, which factors it should contain, maybe we should look at all phases of education and try and establish some common themes. That might just lead to a more consistent pupil experience across phases.

    This a once in a generation opportunity to fix education funding. Let’s not mess it up and miss opportunities for synergy by doing it piecemeal.

  5. Alistair Thomas

    In an earlier post I suggested that we must look at the big picture of education funding, not just another narrow look at schools.

    With that established, I don’t have a problem with removing councils from education. Cut off the head of the LA by all means, but to write off the rest as somehow not massively contributing to the operation of education is a monumental mistake and symptomatic of an ivory towers approach. There are man-millennia of education expertise invested in our LA officers – they are a mission-critical national asset – apparently about to be sold for scrap or simply assigned to landfill.

    Yes, 151 LAs reinvent the education funding wheel (albeit within a nationally limited local formula) based on massively inconsistent funding per pupil. This is something central government has more than a casual hand in, not least today’s Pupil Premium which builds on 3 previous tranches of deprivation funding (which go largely unaccounted for, at least in terms of their benefit to the deprived). A national formula will fix this at a stroke because a county will get education funds based on the (census recorded) needs of its pupils.

    Is it as simple as saying that “since we now have funding according to pupil need, we can just give it schools”? That would be nice but utterly simplistic, even if it would relieve central government of the troublesome intervention of local government. A cynic would say that this is the real reason for the initiative, but whilst that goes too far, it is certainly the driver of a short-sighted, ideological implementation of what is mainly a fantastic idea.

    If you believe that every child matters, and by inference, every school, every community matters etc, then a one-size-fits-all policy from the centre cannot be the perfect solution because, by definition, it is an average. It will serve everybody averagely well, and nobody (except possibly the average) particularly well.

    You can’t have a system tuned to the need of every pupil or even every school, so some compromise is required. How about 80% national consistency starting from a national formula, 20% tailoring to local need by flexing the formula slightly? The local experts that could provide that local tailoring are about to be made redundant. Could schools come together and arbitrate transfers of funds between each other to meet local need better. A pipe dream, particularly since pupil-based funding sets them at each other’s throats.

    The problem with keeping the LA as currently exists is that they act like they know better than school leaders. They are the adults, we are the naughty children. This attitude is toxic and it may well be what stops school leaders ultimately trying to save the best bits of a broken system. This is what we need to fix and it shows better than anything else that governance of education and funding of education are two sides of the same coin. The answer is to keep the LA officers and bring them under control of local education leaders.

    There is a lot of talk about a school-led system, but even this lacks vision. Early Years and Post-16 education are vital parts of the system. We need an education-led system. Not only do we need to keep a redesigned local system of governance, we need to rethink regional governance too. The very name of the current system: “Regional Schools Commission” tells you that Early Years and Post-16 don’t feature. Actually 70% of maintained primary schools aren’t represented either. Is this really the government’s strategic vision to replace the LA? 2/10 for effort – see me after school.

    Actually there is a need for regional coordination of collaboration between local areas. The country needs a comprehensive and cohesive system of local,, regional and national governance of education. It needs to be led by educators for the benefit of the educated, and a national funding formula will fit right in. The system I’ve described is more easily remembered as: Governance of education, by education, for education – nothing less will do. How about them principles?

    Thank goodness we’re about to be consulted on the matter. We can all tell the government what is needed.