Biggest change to funding

You will have seen our earlier blog (click here) announcing that the Department for Education is consulting about a ‘national funding formula’.

This proposal is the most significant to effect school funding for a number of years and it is essential that all schools and academies consider the implications both for the sector and their own school. If the proposal are accepted, the national funding formula will be in place from 2017/18, just over 12 months from now it is proposed that local authorities will distribute funding for the first two years, but that all institutions will be funded directly from 2019-20. It is proposed that the factors within the formula will be divided into four blocks – the consultation document explains how many of the existing factors are used in the new formula plus a new factor to address in-year pupil growth. The table below sets out the main points covered. Proposals include arrangements for schools to move from their current position to a national ‘hard formula’ over three years. It is proposed that a national minimum funding guarantee (MFG) will be the methodology used to protect those schools that are due to lose from the national funding formula and address the needs of those that are due to gain. The transition to a hard formula will be complete by 2019/20.

Per pupil costs	Additional needs	School costs	Geographic costs
Basic per pupil funding	Deprivation Low prior attainment English as additional language	Lump sum Rates Premises Growth	Area cost adjustment

The government is proposing to introduce a fourth block within the Dedicated Schools Grant (DSG), a central schools block for local authorities, to combine the retained duties within the education services grant (ESG) and the centrally held elements of the DSG. This will be distributed to local authorities. Some protection for the ESG for academies will remain in place until 2020. There are currently 152 different funding formulas in England. In the forward of ‘Fair funding – getting it right’ published by National Association of Head Teachers (click here for a copy) it says: ‘The scale of this is demonstrated by a comparison between a primary school in Chalford in Stroud, with £4,914 per pupil, and a primary school in Tower Hamlets where equivalent funding is £7,630.’ Other commentators have quoted similar discrepancies. Where the average is, where a national formula would sit is not easy to determine. But based on the figures what is the impact on the Tower Hamlets primary school if it gets say £6,500. What is the impact upon you? School Business Services believe all schools need to take part in the debate. Consider information in the documents published by the DfE, consult with colleagues and governors and respond to the consultation.

• Schools national funding formula consultation, 3.2 MB (PDF document)
• The case for change and consultation summary, 1.8 MB (PDF document)
• The current funding system, 2.3 MB (PDF document)
• Equality analysis, 1.0 MB (PDF document)

You can respond to the consultation online. The closing date for the stage one consultation is 17 April 2016 When you are ready to start preparing possible 3-5 year financial plans, looking at different scenarios, School Business Services will be happy to assist you. Give us a call on 0345 222 1551 or speak to your consultant.