School funding reform
School funding reform

School funding reform

DummiesLast time I checked, ‘School funding – for Dummies’ was not an Amazon best seller. Truth is, I didn’t check. Apart from school leaders and school business managers, who has an interest in school funding (not even all school leaders are interested, that is what they have school business managers for.) The Dummies guide will arguably, never be written, but that does not stop me from feeling that I should have at the very least have a handle on the basics of how our school is funded.

Sadly we join the fray right in the middle of funding reform. In March 2012, the government set out plans to introduce a “simpler and more transparent school funding system.” In July 2012, they published ‘School funding reform: arrangements for 2013-14’, announcing the final funding arrangements for the financial year 2013 to 2014. This is where I started.

Funding 2013-14

The rationale was to make school funding arrangements simpler and fairer, to give school leaders more control over how they spend their budget, to introduce more transparent school and college funding arrangements. To make sure school and college budgets are set on time and are predictable and to make sure funding always reaches the pupils that need it most. Finally to announce details of the national funding formula by Easter 2014? So we are expecting a national funding formula?

My notes quickly resembled an abbreviations glossary;

  • Deprivation – based on Free School Meals (FSM) and/or Income Deprivation Affecting Children Index (IDACI)
  • Education Funding Agency (EFA)
  • Dedicated Schools Grant (DSG)
  • “Schools Block” element of the DSG to schools?
  • Separate Key Stage 3 and Key Stage 4 rate for basic per-pupil entitlement
  • A basic per-pupil amount (age-weighted pupil unit or AWPU
  • Looked after children (LAC)
  • Lower cost SEN
  • English as an additional language (EAL)
  • Minimum funding guarantee (MFG)
  • Ethnic Minority and Traveller Achievement Support (EMTAS)

Most were familiar, some like the “Schools Block” required a little further Googling. The total DSG is split into three separate blocks, a schools block which is intended to fund individual school budgets, an early years block which funds pre-school education in all settings, and a high needs block which funds special schools and all non-mainstream educational functions (including top ups to schools for individual pupils with additional or special educational requirements). Schools Block is based on pupil numbers as recorded on October 2013 School Census, multiplied by a per pupil unit of funding.

The 2013-14 reforms, were reported to have lead to local authorities, working with their Schools Forums, to develop new local formulae, using simplified and consistent formula factors. This would appear, to the lay-person a positive step.

This was then followed by the February 2014 review that noted “to what extent we needed to make small changes in 2014-15 in order to move closer to a national funding formula.”

So, are we, or are we not, moving towards a national funding formula? Towards a goal of a pupil-led funding system or consistent basic entitlement per pupil?

Findings from the Review and Approach for 2014-15

All but two local authorities allocated 80% or more of their delegated DSG. A minimum threshold is supported. A minimum of 80% of delegated schools block funding is to be allocated through an appropriate and locally determined combination of the pupil-led factors. (but not yet a a national funding formula).

The pupil-led factors are: the Age Weighted Pupil Unit (AWPU), prior attainment, deprivation, scarcity, pupil mobility and service children, looked after children (LAC), lump sum (Schools with falling rolls unlikely to be included).

So what of the remaining 20%?

Prior Attainment – it is reported that defining “pupils with low cost SEN” was difficult, however prior attainment was considered a “reasonable proxy.” A key factor for for Secondary schools –  currently, pupils qualify for the prior attainment factor at KS2, if they fail to achieve a level 4 or higher in English AND maths, approximately 10% of pupils. Only 20% of pupils who achieved a level 4 in English or maths went on to achieve the 5 (A*-C) GCSEs including English and maths. In 2014-15, pupils will be identified as having low prior attainment, if they fail to achieve a level 4 or higher in English OR a level 4 or higher in maths, approximately 21% of pupils.

Deprivation – local authorities have to ensure that deprived pupils attracted additional funding, in addition to the Pupil Premium. From reading the policy, it is safe to safe that this is localised and complicated but it is clear that more funding will be available. It is needed, 37.9% of pupils who qualified for free school meals achieved 5EM A*-C, compared with 64.6% of pupils who do not qualify in 2013.

Sparsity – a factor which measures the distance pupils live from their second nearest  school.  An optional sparsity factor will be introduced in 2014-15.

Pupil Mobility and Service Children – starting in 2014-15, a 10% threshold will be applied to the mobility factor, so that it will only support schools which experience a significant change in their pupil numbers.

Lump Sum Funding – in 2013-14 local authorities were able to provide a single optional lump sum to all schools up to a maximum of £200,000. That has been reduced to £175,000, another move towards a pupil-led funding system (though there is more flexibility in the policy).

Looked After Children – In 2014-15 local authorities have to use a single one day or more measure for both primary and secondary.

High Needs Funding – I needed to research further. In simple terms it is funding designed to support a continuum of provision for pupils and students with special educational needs (SEN), learning difficulties and disabilities, from their early years to age 25. As far as I understand it, the DfE had not ywt confirmed how they will fund growth in the High Needs Block at this point.

Academies’ Budgets

Many academies that initially receive their budgets based on estimated pupil numbers have their funding adjusted to reflect in-year pupil counts through a process called the pupil number adjustment. In line with principles of funding simplification overall, the DfE intended to consider introducing a simplified method for calculating these adjustments to 2013/14 budgets. More research needed here.

What happens if estimated pupil numbers are significantly lower or higher?

Interesting notes

The overall schools budget will stay at the same level on a per pupil basis before the addition of the Pupil Premium, the actual level of each school’s individual budget will vary.

To protect schools from significant budget reductions, the Minimum Funding Guarantee (MFG) will ensure that no school sees more than a 1.5% per pupil reduction in 2014-15 budgets (excluding sixth form funding in mainstream schools) compared to 2013-14 and before the Pupil Premium is added. This is the same methodology as for 2013-14. The Pupil Premium level of funding for 2014-15 was detailed in the December report to Schools Forum, as follows:

  • Primary School FSM – £1,300 per pupil (increase from £953 in 2013-14 – following a late addition of £53)
  • Secondary School FSM – £935 per pupil (increase from £900)
  • Children in care – £1,900 per pupil (increase from £900) – effective from the child’s first day in care rather than after six months. From  2014-15 it will also include children who have been adopted from care or leave care under a special guardianship or residence order.
  • Service children – £300 per pupil (remains the same but expanded to include those children whose parents are no longer in the armed forces)

The secondary AWPUs show a similar pattern. For key stage 3 AWPUs, 73% of local authorities are allocating between £3,500 and £4,500 per pupil, and for key stage 4, the majority (77%) are allocating between £4,000 and £5,000 per pupil. Again, the authorities with the largest secondary AWPUs are mostly in London.

What for 2015-16

David Laws oral statement (March 13th) on minimum funding levels sets out how to allocate the additional funding fairly. That for 2015 to 2016, every local authority will attract a minimum funding level for every pupil and every school. More can be found here.

The original four factors David Law outlined, was extended to five  in the the Fairer schools funding in 2015-16, which remains open for response until April 30th.

  • a per – pupil amount (‘age weighted pupil unit’);
  • pupils who are from deprived backgrounds;
  • pupils who have been looked after, for example in foster care;
  • pupils with low attainment before starting at either their primary or secondary school;
  • pupils who speak English as an additional language

In addition, two school characteristics;

  • a minimum funding level for each school on top of its per – pupil funding (‘lump sum’); and
  • a minimum funding level for small schools that are essential to serving rural areas (sparsity sum)

So that brings the funding up to date. Not quite a Dummies guide however writing this summary has at least helped me make some sense of the funding fog.


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