School leaders warn of more redundancies in wake of funding formula delay

Schools face making more redundancies and multi-academy trusts will be hampered from taking over struggling schools, education leaders have told Schools Week, as the implications of the government’s decision to delay the national funding formula surface.

Justine Greening announced today that plans to overhaul school funding into a national formula, which the government says will end historical inequalities of regional formulae, would be pushed back a year until 2018.

Schools Week previously revealed this was likely to be the case, as the political fall-out of a Brexit vote put even further pressure on the process that already seemed behind schedule.

Micon Metcalfe
Micon Metcalfe

But now leaders are considering the implications of the delay, announced as their schools prepare to break up for the summer holidays.

Schools Week has been told the government’s decision could halt academy conversions and also leave schools facing more redundancies.

School business director Micon Metcalfe (pictured right), who also trains other education leaders, said the announcement “extends uncertainty over school budgets when leaders are consistently saying they need better funding to maintain their current provision”.

She added: “Schools need to be able to start to understand and plan for the implications. When it is implemented there needs to be sufficient protection in order to minimise the turbulence in an already stretched sector.”


Growth of academy trusts will be slowed

A headteacher of a school in a poorly-funded area, who did not want to be named, told Schools Week: “We have no money left. We hence can’t carry out due diligence on schools we may be merging or taking over. They also have no money so are seeking to join up to make savings.”

He said, in the short term, this means growing the multi-academy trust (MAT) will cost money. “We may therefore have to join or merge with a different MAT and their perspective is not as supportive of government change [as ours] or the same with regard to the curriculum.”

This view was echoed by Mike Cameron, a school governor and former teacher, who said the delay makes it harder for MATs to take on new schools “especially in areas where funding is expected to fall”.

We have no money left

“This will slow the move towards the government’s aim of a fully-academised system. Unless, of course, the DfE intends to give financial guarantees to MATs in such circumstances.”

A study by the Institute for Fiscal Studies last year revealed school budgets will see a real terms cut of 8 per cent between last year and 2020.

While the government says it has “protected the overall core schools budget in real terms”, schools are facing increased pressure on outgoings, such as increased pension and national insurance contributions.


Schools have no choice but to make redundancies

A governance expert, who did not want to be named, told Schools Week that many schools have eroded their reserves to nothing and have cut “everything back to the bone. All that is left is staff.”

Adding: “Schools have been hoping that the funding change would provide enough support to restore a balanced budget, and held off making cuts to see whether that would be the case.

“Another year is not sustainable and cuts will have to be made now. Support staff first, but they are cheap. Teachers will soon follow.”

Schools Week has already revealed how both schools and large MATs are being pushed into slashing their wage bills.

A whitehall source also said the delay, and another year of funding under the currently “unfair” local formula method, will simply mean the future rebalancing of funding under the new national formula will take longer.


Was delaying was the right call?

But Jonathan Simons, head of education at think tank Policy Exchange, told Schools Week: “It’s the right thing to do, under the circumstances – the delay caused by various elections and the referendum and subsequent political changes meant that the timing would have been unreasonably tight. Better to do it right, than do it in a rush.”

Allan Hickie
Allan Hickie

Allan Hickie (pictured left) , an academies specialist from accountancy firm UHY Hacker, said the fact Greening has committed to introducing the formula is a win itself. He said lots of academies he works with are from Kent, an area known to be underfunded.

“Schools have been working on the basis of ‘we are going to get [funding next year] what we have now’. Any uplift in funding would be better sooner; it will be difficult and harder then it would have been [next year], but they will get by and know a year down the line they will be getting extra funding.”

However he said schools “on the brink” of using their reserves could have to look at emergency funding.

Greening said today the government will respond to the first stage of the national funding formula consultation in autumn.

A second consultation on the proposed detail of the policy – which will reveal which schools will gain or lose cash – will now not be launched until later this year, and decisions will be made in the new year based on the findings of the consultation.

Russell Hobby, general secretary of the National Association of Head Teachers (pictured right) , said: “Schools cannot yet put in place budget plans for the Russell-Hobby-cutoutcoming years, so we hope the government, and the new Secretary of State, will continue to work with school leaders to ensure this delay is the final one in a debate that has raged for so many years.

“Continued consultation and timely publication is essential for this massive change to work properly.”


Government must now “get it right”

Greening said response to the first consultation gave a “strong sense” the policy represents a “once in a generation opportunity for an historic change”, and said the government “must get it right”.

She said no local authority would receive a reduction in their 2016-17 funding from the government, and has released more detailed guidance on how funding is being calculated.

Greening said the government will also retain the current minimum funding guarantee for schools – meaning no school can face a “funding reduction of more than 1.5 per cent per pupil next year in what it received through the local authority funding formula”.

Most of all, it seems school leaders now hope the extra time will allow Greening to get the formula right.

Frank Norris, director of the Co-operative Academies Trust, said: “I hope that the government uses the additional time to engage fully with schools so that it gives good notice of proposed changes and explains fully the rationale. The Secretary of State is correct in stating that this is the right solution for all and that it is fair.”

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  1. The comment that the delay makes it harder for MATs to take on new schools “especially in areas where funding is expected to fall” is revealing. Does this mean MATs only want to cherry pick schools with healthy financial prospects? I thought the idea was that MATs could generate efficiencies through economies of scale?