What are the aims behind a school funding formula?

Last week I attended a conference put on at the LGA’s conference centre in London by the f40 Group of authorities concerned about school funding, and how it is distributed. Despite its location close to Houses of Parliament, no representative from any London authority was listed in the delegate list. I suppose that’s not surprising in view of the relative distribution of funding across the different local authorities in England.

The historical differences between the funding of schooling across local areas in England goes way back into the history of State education and how it was funded. In an article I wrote in the Oxford Review of Education way back in 1982, I said that local government then managed eighty per cent of spending on education. Even then, recognition that monitoring of what was happening, as the education system developed from just a limited scheme of elementary schools into a more elaborate and widespread system, especially after the passing of the 1944 Education Act, was contained in an HMI publication of 1981 entitled Report of HMI on the effects of local authority expenditure policies on the Education Service in England.  (DES, March, 1982).

Over the next thirty-five years power flowed inexorably from local authorities towards central government. During this changeover period, school funding became more centralised, but also increasingly distributed directly to schools, without local government being able to do much more than try to influence what was happening.

Also, throughout the changeover period, there were calls for a recognition that the existing system was unfair and based upon factors that prevented some areas from funding education as they would have wanted. This was especially the case in the period between the 1944 Education Act and the late 1980s when local government funding, of which most education funding was a part, was not hypothecated and some authorities chose to divide up their spending in less generous ways in terms of funding schools than did others. However, the unfairness resulting from the local retention of business rates always meant some areas had to receive extra funding from central government once it was agreed that a minimum national level of funding was required to operate the school system.

After the Education Reform Act, the idea of curriculum lead funding gathered pace, and calls were increasingly heard for a National Funding Formula for schools. Despite work conducted during both the period of the Labour government between 1997 and 2010, and the period of coalition government, it was only the post 2015 that the DfE and Ministers grasped the nettle and produced the outline of a policy for such a Formula: possibly some Ministers might have wished that they had left well alone. Nevertheless, by 2018, a National Formula existed and was being implemented.

Despite the explicit basis of a formula for schools designed around four basic building blocks: basic pupil funding via an age-weighted pupil unit and a minimum guarantee per pupil; additional needs criteria; a school element including a lump sum and finally an area cost adjustment, the outcomes don’t seem to satisfy many as the f40 conference discussions revealed. Indeed, under the new formula the rank order of high funded and low funded local authority areas remains not totally dissimilar to what was there before.

Perhaps my greatest anxiety arising from the new formula, and expressed by others at the conference, as well as having been expressed before in this blog, is that small rural primary schools have generally not been given sufficient funds to survive the next few years in their present form.

Now, if that is what the government want in order to rationalise spending and cut out waste, so be it. Whether the votes in rural areas will see it in the same way, is entirely another matter. But, it does highlight how values and funding are inextricably linked. At one time Mr Gove, when Secretary of State, wanted to do away with the sump sum completely for all schools: marking certain closure for small schools. The present formula retains a lump sum, but as Peter Downes in Cambridgeshire has worked out, not one especially supportive of small rural schools. The triple weighting of additional needs through a deprivation factor, English as an additional language and prior low attainment of pupils can more than balance out the sparsity and lump sum factors when overlain by the use of a geographical area cost adjustment.

As was once said by commentators of a former system for allocating education funding in the 1970s. ‘..has a deceptive appearance of simplicity. If it is a cost projection of existing policies then there is often disagreement about each element – cost, projection and existing policy all means.

Perhaps not much changes in government.

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