A National Funding Formula for schools will be based on a “fair and rational” assessment of pupil need, including the number of disadvantaged children on roll, the chancellor has pledged.
School leaders have welcomed the news that the government intends to tackle the inequalities in per-pupil funding that exist between schools in different areas.
Chancellor George Osborne said the government would work towards the introduction of a national funding formula to end discrepancies that can amount to millions of pounds between schools.
However, questions have been raised about the “winners and losers” that changes to the funding system will create.
Speaking in the House of Commons last week, Mr Osborne set out details of the government’s planned spending for 2015/16. He said the Department for Education’s (DfE) budget would increase from £52.8 billion in 2014/15 to £53.2 billion in 2015/16 and pledged that “schools spending will be protected in real terms”.
Announcing a national funding formula, Mr Osborne said: “School funding across the country is not equally distributed, but distributed on a historical basis with no logical reason. The result is that some schools get much more than others in the same circumstances.”
School funding varies due to different school characteristics but also because of how local authorities fund schools according to these factors.
The DfE has already looked into the issue, running a consultation over funding in 2011. At the time it found that there were differences of as much as £1,800 per-pupil between some secondary schools.
The majority of schools receive between £4,000 and £7,000, although figures in 2009 showed that schools in Leicestershire received as little as £3,728 per pupil compared to a school in the City of London which received £7,603.
The chancellor’s Spending Review documents reveal that funding will be based on an assessment of pupil need: “In future, the amount of funding a school receives will be based on a fair and rational assessment of the needs of its pupils, including how many pupils are disadvantaged.”
However, in 2011 an analysis by the Institute of Fiscal Studies warned that any move to a national formula would create ”winners and losers”. It said: “Even under a reform that sought to minimise the amount of disruption, roughly one in six schools would see cuts in funding of 10 per cent or more compared with existing policy, while one in 10 schools would see their funding increase by 10 per cent or more.”
The Association of School and College Leaders welcomed the chancellor’s announcement, but warned that it will be a long process. General secretary Brian Lightman said: “The longer it is delayed, the more difficult the decisions that will have to be made. We have been pressing for fairer funding for many years and we are under no illusion about how much work there is to do.”
Mr Osborne has also pledged £4.6 billion for capital funding in 2015/16 for school repairs and to invest in new school places. However, he has cut £200 million from local councils’ education funding in order, he says, to give the money directly to schools.
Cllr David Simmonds, chairman of the Local Government Association’s Children and Young People Board, said this was short-sighted: “The government’s promise to protect school budgets has been undermined by this disproportionate 20 per cent cut to the vital support they receive from councils.
“The Education Services Grant pays for councils to help drive improvements in the classroom, tackle non-attendance, and support schools in managing their finances and assets so that buildings are up-to-scratch and equipment is up-to-date.
“These all have a direct impact on the quality of our children’s education. There will be no easy choices for local authorities to make when deciding which they can no longer afford to pay for.”
The government has also been attacked for funding what Mr Osborne said would be an “unprecedented increase” in its free school programme.
The chancellor unveiled plans to create another 180 free schools in 2015/16, as well as 20 university technical colleges, which specialise in vocational pathways, and 20 alternative provision studio schools.
Mr Lightman added that free schools have already been created in areas that have a surplus of places and if this were to happen with the new 180 schools planned for 2015/16 it would be “an unacceptable waste of taxpayers’ money”. He added: “The DfE needs a strategic, co-ordinated national plan to make sure that all areas have the right number of school places and that money is spent responsibly.”
Dr Mary Bousted, general secretary of the Association of Teachers and Lecturers, said: “When government spending is under such huge pressure it makes no sense for it to continue squandering money on poor value pet projects, allowing free schools to be set-up regardless of where there is a need for more school places.”
Russell Hobby, general secretary of the National Association of Head Teachers, added: “The government’s announcement of more free schools amounts to an inefficient use of a limited capital budget: meaning that, in the face of rapidly rising numbers of young pupils, too many schools are built at the wrong time, in the wrong phase, and in the wrong place.”
It comes as a report by the Committee of Public Accounts found that the DfE has no idea whether the £5 billion it is putting towards meeting the shortfall in school places by March 2015 will be enough. For more on this story, see SecEd's report by clicking here.