The Optimus blog

The blog that inspires leaders in the UK education sector

The Optimus blog

The blog that inspires leaders in the UK education sector

John Viner

National funding: new broom, old cobwebs

For most school business managers, the most immediate and urgent concerns will surround funding and it’s important to appreciate that nothing is going to change in the immediate short term.

What, you may ask, happened to the much-vaunted National Funding Formula promised from 2017?

Details of the schools’ revenue funding for 2017-18 were finalised long before Brexit jumped out at us. So, it’s reasonable to focus on what April 2017 might bring and then listen carefully to the sounds of the approaching changes that will accompany the long-awaited common funding formula.

Unsurprisingly, the 2017-18 funding arrangements, whether by the DfE for maintained schools or the EFA for free schools and academies, are broadly similar to the current years.

State-funding for LA schools

However, there are a few changes that may have a marginal impact. The list below refers to state-funding for LA schools (SBMs in free schools and academies can ignore the bits about the ESG and local authorities).

  • The Dedicated Schools Grant (DSG) blocks (the eleven factors that make up the DSG) have been ‘realigned’ to reflect current (LA) spending patterns.
  • Funding for the Education Services Grant (ESG) retained duties (£15 per pupil) has been transferred into the school’s block of the DSG. This will look like a cut to the ESG.
  • The Post-16 funding factor has been removed. This will look like a cut too, save that there is some protection through the Minimum Funding Guarantee.
  • LAs will be able to retain money from the DSG for the statutory duties previously covered by the ESG.
  • In anticipation of lower KS2 performance, funding for low prior attainment in Year 7 will be based on a national figure to iron out regional variance.

Efficiency, value for money and continued challenge

In a letter from the director of the Academies and Maintained Schools Group, prior to the allocation of the current year’s funding, Sue Baldwin says:

‘As you will be aware, we are facing a period of challenging overall public finances in coming years, which will impact on school budgets. We have already placed a great deal of emphasis on academy trusts and free schools using robust financial planning and monitoring systems, but this will become even more important. I know you are all committed and striving to drive down cost and drive up value for money year on year, as well as improving outcomes for the children and young people in your schools. The need to ensure efficiency remains a priority for all of us.’

So, the watchword remains efficiency and value for money in a context of continued challenge. Many SBMs will be aware of the ‘Efficiency Toolkit’ and it seems that this may still be relevant for 2017-18.

So, what of the National Funding Formula?

One of the most obvious concerns that business managers would be quite right to raise is that we were promised that the new basis for school funding would be in place from 2017 and so far, it seems, we are no further forward.

This has not gone unnoticed and questions have, literally, been asked in the house. In fact, in both houses. In July, the new Secretary of State for Education made an announcement to the House of Commons while, almost at the same time, Junior Schools Minister, Lord John Nash, made a similar announcement in the House of Lords.

We must get our approach right

Their statements justified the delayed timescale by pointing out that ‘this is a once in a generation opportunity for a historic change and that we must get our approach right’

The new arrangements will apply from 2018-19. The secretary of state reported: ‘This is an important reform, which will fairly and transparently allocate funding on the basis of schools’ and children’s actual needs, rather than simply on historic levels of funding tied to out of date local information.

‘Along with the record levels of funding for schools announced at the spending review, and our commitment to the pupil premium for pupils from disadvantaged backgrounds, a fairer funding system will set a common foundation that will enable schools – no longer held back by a funding system that is arbitrary, out of date and unfair – to maximise the potential of every child. It will provide a crucial underpinning for the education system to act as a motor for social mobility and social justice.’

No reduction in funding for LAs – for the time being

The initial consultations suggested that the National Funding Formula seems to have the broad support of headteachers, teachers, governors and parents.

Justine Greening promised to publish the government’s response to the first stages of consultation when parliament returns in the autumn and will later set out the arrangements for more detailed consultations.

The government has promised that, in 2017-18, no local authority will see a reduction from their 2016-17 funding. They will retain the current minimum funding guarantee for schools - so that no school will face a funding reduction of more than 1.5% per pupil next year in what it receives through the local authority funding formula.

Final allocations for schools will follow in December on the basis of pupil numbers recorded in the October census. The Secretary of State will shortly publish the Education Funding Agency’s operational guide to schools funding in 2017-18.

So, watch for the autumn stage of consultation on the common funding formula and make sure that you submit your response. Whether or not it looks like ‘record levels of funding’, it will be no good complaining later if you missed the opportunity to have your say now.

More on financial management in schools


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