Funding pledge: What it means for your school...

Written by: Julia Harnden | Published:
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What will the government funding pledges – announced earlier this term – mean for your secondary school? Funding specialist Julia Harnden looks at the figures

For those of us whose daily life revolves around funding policy, government spending reviews have been an anchor in an otherwise very stormy sea.

Every few years the government undertakes a review of public sector spending and sets expenditure limits for the government departments that oversee our public services.

Governments determine the period of time that such a review will cover, but often it is three or even five years. The current review period ran from 2015 and finishes at the end of March 2020.

So while uncertainty around Brexit, and whether or not austerity is over, has been bewildering at best, we have known that decisions about education spending (along with the rest of the public sector) from April 2020 onwards would have to be announced this year – by autumn at the latest.

In the 12 months running up to autumn 2019 interested parties worked hard to create a body of evidence that would support the Department for Education (DfE) in its negotiations with the Treasury.

Much of this work focused on securing sufficient funding for education – money which is needed to take schools out of the increasingly precarious financial situation that has become the norm in recent years.

The Association of School and College Leaders (ASCL) produced the True Cost of Education report (Harnden, 2019) which assesses the funding needed by schools to meet the basic expectations upon them.

The House of Commons Education Select Committee published the findings of its inquiry into school and college funding (2019) which called on the government to commit to a multi-billion cash injection and a strategic 10-year funding plan.

And a coalition of unions and the f40 campaign group worked together to determine what was needed to set education back on course and offset almost five years of real-terms cuts. The ask was £12.6 billion by 2022/23 (ASCL, 2019).

In the summer it became clear that the most likely course of action would be a transitional rather than full spending review, which would probably cover a shorter period of one year.

Would we get a deal or simply a roll-over? What we actually got was a mixture of both.

Schools

A very welcome, three-year settlement for schools (DfE, 2019a) is a clear acknowledgement of the crisis that we are living through and recognition of the importance of predictability in strategic financial planning.

The settlement for primary and secondary schools means that by 2022/23 there will be an additional £7.1 billion in the pot compared to 2019/20 levels.

This will accrue over three years with an additional £2.6 billion in 2020/21; £4.8 billion in 2021/22; and reaching £7.1 billion in 2022/23. It is worth noting that the settlement years are financial years, so academies will not see any additions until September 2020.

The prime minister spoke a lot about “levelling up” per-pupil funding when he first took residence at Number 10. Minimum per-pupil funding (MPF) levels will rise to £3,750 for primary pupils and £5,000 for secondary pupils in 2020/21. The policy intention is to address the geographical variations that currently exist and funding will target historically low-funded schools in low-funded areas.

The “test” for determining whether a school is entitled to a top-up to ensure it achieves the MPF level considers both pupil-led funding – age-weighted pupil unit (AWPU) and additional needs funding – and some school-led factors – lump sum, sparsity. This means that schools whose pupils demonstrate less demand for additional needs funding are likely to benefit most from an MPF top-up. In other words, schools in less challenging areas are likely to attract more of this funding.

Schools that are at, or above, the MPF level already will need to look to the funding floor and the increased values attached to the National Funding Formula (NFF) for increases in 2020/21.

The funding floor has been set at +1.84 per cent for 2020/21. All schools will see an increase in their pupil-led funding of at least 1.84 per cent compared to 2019/20. The NFF indicative allocations (DfE, 2019b) and NFF factor values (DfE, 2019c) have been published. Schools can check the impact on their funding calculated at national level.

Early analysis indicates that around one in four primary and secondary schools will see only funding floor increases of 1.84 per cent. Around 40 per cent of primary schools will benefit from increases between five and 10 per cent and just over one-third of secondary schools will achieve increases of between four and five per cent.

Local flexibility

All of this information applies to the DfE calculations of individual school budgets. These are added up to inform the total pot that a local authority receives for all the schools in the area. In 2020/21 the local authority will still use a local distribution formula, which in most cases will be close to the NFF.

However, the local authority can still move up to 0.5 per cent of schools block funds. This can only be done with School Forum approval.

High needs

The pressures on high needs funding are well documented and exist for a variety of reasons including the impact of reforms introduced under the Children and Families Act 2014; an increase in the number of education health and care plans (EHCP) – currently rising at 10 per cent (or around 30,000) per year; and a basic shortage of state-funded special school places.

The spending round had delivered an additional £780 million to the high needs block of the dedicated schools grant in 2020/21. All local authorities will see an increase of at least eight per cent in cash terms – the funding floor.

Evidence indicates that around one-third of local authorities will get eight per cent increases. There is also a cap on gains of 17 per cent in cash terms, which will limit the gains of about one in five local authorities.

The additional high needs money is an increase of about 12 per cent on 2019 levels, which is much needed.

However, it is worth noting that if EHCPs continue to rise at current rates much more will be needed in years two and three of the settlement. It is ASCL’s view that the distribution methodology for high needs funding should be much more closely targeted to need rather than historic spend, which currently drives a significant portion (nearly half) of the current mechanism.

Funding for 16 to 19-year-olds

A one-year settlement of £400 million will, at last, allow an increase in the standard learner rate. The current rate (£4,000) has been frozen since 2013. In 2020/21 the learner rate for 16 and 17-year-olds following full-time study programmes will be £4,188.

For students with SEND or for those following a T level programme the learner rate for 18-year-olds will be protected at £4,188. However, for students following more traditional programmes the learner rate for 18-year-olds falls to £3,500. We think that the full-time rate should be maintained for students following all types of programme.

In summary

On balance, we did get a deal. It would be even better if it was a three-year settlement across the whole sector and closer to the £12.6 billion that we asked the chancellor for. I think we are witnessing, at least some, acknowledgement by the government that our education system is in crisis. Our job now is to keep the pressure on. After all, there will have to be a spending review in 2020...

  • Julia Harnden is a funding specialist at the Association of School and College Leaders.

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