The implications of the National Funding Formula for schools.

Document type
Perera, Natalie; Andrews, Jon; Sellen, Peter.
Date of publication
17 March 2017
Education and Skills, Children and Young People
Social welfare
Material type

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This report states that the existing school funding system allocates money inconsistently across English schools, and that there is a strong case for introducing a new national funding formula despite public sector austerity measures. It describes detailed plans published in December 2016 by the Department for education relating to the construction of a national funding formula based on a combination of policy intentions and current practice. The authors explore the implications of these decisions on different areas, types of schools and pupils in England before considering the overall effect of the proposed formula alongside wider funding pressures forecast over the course of this spending period (up to 2019-20). They discuss the overall context of these measures and identify the following areas of concern:

  • the Department’s overall approach to funding for disadvantaged pupils seems to be inconsistent,  allocating almost one and a half times as much money to primary pupils than it does to secondary pupils, reflecting a policy decision to prioritise early intervention but proposing to allocate a greater weighting to disadvantaged secondary pupils compared to primary pupils; 
  • the proposed increase to low prior attainment funding (from £1.4bn to £2.4bn), combined with plans to use the Early Years Foundation Stage as a measure of whether a child is at risk of falling behind, heightens the current incentive for teachers to depress pupils results at the end of the Reception year in order to attract more funding to the school, and
  •  the Department is also proposing to spend £167m per year for schools that experience in year growth in pupil numbers and a further £23m on large volumes of pupils leaving or joining a school, but does not collect national data on these movements of pupils and thus proposes to spend the total of £190m based on how much local authorities currently allocate to certain schools.

They conclude that once inflation and other pressures are taken into account, all schools in England are likely to see real terms cuts in funding per pupil over the next 3 years, with many schools (around 5000) seeing further budget cuts after 2019-20 if the government fails to allocate more money to schools in the next spending review period and continues to converge schools towards the national funding formula.

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