Another aspect of the funding problem

What happens if a large secondary school at the centre of a multi-academy trust comprising a mix of both primary schools and a secondary school goes bust, perhaps because the original founders made some unwise decisions and there was then a drop in applications from local parents to send their children to the secondary school, aware that teachers were leaving the schools and concerned that standards might slip as a result? Or because there was an outflow of EU nationals from the area now Article 50 has been triggered.

Does the failure of the secondary school bring down all the primary schools in the MAT as well or can they survive on their own. At what point should the trustees decide to cut a financially unviable school adrift and will the Education Funding Agency allow them to do so if there are other assets in the MAT that might keep the school going for longer?

I am sure that there are civil servants in Coventry thinking about these types of scenario and perhaps role-playing them with Regional School Commissioners. How far have they progressed in their thinking should the MAT has a faith base and all the schools within it belong to the same faith or Christian denomination?

Sitting in the wings is the local authority, with whom the ultimate authority for providing every pupil with a school place still resides. What happens if the school that has just become financially unviable is in a rural area and the places at other schools require a large increase in the school transport bill? Who picks up the tab?

Obviously, the ideal solution is for the school buildings to open under a new administration, but will the government allow that to happen if it means writing off the debts of a school. To do so might encourage other schools to run up large deficit budgets, secure in the knowledge that the government will bail them out. One answer might be for the government to replace the trustees. But at what point? As soon as a deficit budget position is reached? When the deficit going forward looks as if it will reach a pre-determined percentage of current turnover after taking any falling rolls and thus falling income into account? If the financially unviable school is a faith school, can a new faith school replace it? To do so might well save on transport costs, but a replacement school that wasn’t faith-based might allow for transport savings. Of course, much will depend upon who has the ownership of the buildings?

With the demise of several UTCs and studio schools, plus a small number of other academies, these scenarios are no longer in the realm of the unthinkable. But, does there need to be a level playing field with some clear and open guidelines that don’t encourage schools to create deficits on their revenue spending.

At present, there is the ‘financial notice to improve’ from the EFA, but, the issue is what happens when the school or MAT doesn’t do so for reasons beyond its control? Time to re-read the Academies Financial handbook.

 

More on the financing of education

One of the joys of moving house is unearthing long lost papers. One such that came to light during my recent house move was a paper on the finance of education I wrote way back in 1981. I think it was in preparation for a talk to students at the then Chelmer Institute of Higher Education where many teachers for schools in Essex and the surrounding area were still being trained at that time.

Anyway, the significance of the paper today is not its purpose, but rather in its contents. At that time, the Thatcher government was wrestling with an economic crisis that everyone thought was dire. It is true that one of its consequences was the collapse of large parts of the manufacturing sector, especially in areas such as the West Midlands, where, for instance, glass making in Stourbridge was replaced by new activities such as shopping centres and the car industry went into a long period of decline that seriously affected the western side of the West Midlands.

Education wasn’t protected during the economic turmoil of that period and there was the added complication that school rolls were generally in a period of decline. As a result, school budgets came under severe pressure. Just as now, local government spending bore the brunt of public expenditure cuts and at that time schools was a locally provided service. A survey of 31 local education authorities, as they were then, conducted by ‘Education’ magazine during May 1981 revealed where the cuts in expenditure were being made.

Expenditure item London Met Districts Shire Counties  
7 LEAs 8 LEAs 16 LEAs Total
Meals & Milk 3 1 12 16
Central Admin 1 2 8 11
Non-teaching staff 2 0 5 7
transport 2 2 1 5
Buildings & Playing fields 1 2 2 5
Capitation 2 1 1 4
Pupil Teacher Ratios 0 1 2 3

The first point to notice is how much the funding of schools has changed over the past 35 years. The second point is that teaching staff, as measured by worsening the Pupil Teacher Ratio (PTR) was only recorded by three LEAs out of the 31 surveyed as an option for cuts. Of course, some LEAs might have made cuts in previous years, and those authorities with elections in 1981 might have tried to protect the more obvious front-line aspects of education that parents would notice, such as increases in class sizes. But, despite falling rolls teaching staff as measured through the PTR was largely being protected in these LEAs.

However, I think the table may provide some pointers about what is likely to happen over the next few years to those schools whose budgets come under pressure. Of course, in the present world of devolved budgets, it won’t be councillors in the 152 local authorities worried about re-election taking the decisions on budgets these days, but heads and governors and the CEOs of MATs.

Nevertheless, I would be surprised if protecting teaching posts wasn’t still in a similar position in any table constructed in 2017. However, it might not be seen as quite as well protected as in the 1980s, since schools may be more prepared to cut optional subjects, especially at 16-19 than LEAs were in the 1980s.

It will be instructive to see how far MATs are prepared to trim back on central administration costs; surely an area for efficiency saving as LEAs identified in 1981. Do we need an index of central costs to school-based spending as was commonplace in the period when local authorities were being pilloried for retaining too much of the funding for schools.

Might we also see a return to hypothecated funding in areas such a professional development and IT spending as we have with the provision of free lunches to infant age pupils and funding for aspects of deprivation through the Pupil Premium and extra funding for children in care. This may be the only way to ensure any degree of uniformity of provision across a devolved funding system. Whether we should is another issue for another day.

 

 

School funding: Oxfordshire as a case study

A version of this article appear in the Oxford Times  newspaper of the 23rd March 2017

Why, when it has been generally acknowledged that state schools in Oxfordshire are poorly funded, has the government decided some Oxfordshire schools should lose even more of their income?  This was the conundrum facing those of us concerned about education in Oxfordshire just before Christmas when the government at Westminster announced the second stage of their consultation around a new fairer funding formula for schools.

Most of the secondary schools in the county stand to see an increase in their funding under the new proposals. That’s the good news, although it doesn’t extend to all the secondary schools in the county and the increase may not be enough to cope with the rising costs all schools face.

The really shocking news is the cuts to funding faced by the majority of the small rural primary schools across the county, especially those in the Chilterns, Cotswolds and across the downs. Although the cut is only a percentage point or two, it may be enough to create havoc with the budgets for these schools, especially as they too face general cost pressures through inflation and rising prices. Even the schools promised more cash, mainly schools in Oxford and the other towns across the county, won’t in many cases see all the extra money the government formula has assessed them as being entitled to receive. This is because the government has proposed a ceiling to the percentage increase any school can receive. A bit like saying, ‘we know we are paying you less than you deserve, but we cannot afford the full amount’.

I had anticipated the new formula was likely to bring problems, so tabled a motion at the November meeting of the county council to allow all councillors to discuss the matter. Sadly, the meeting ran over time and my motion wasn’t reached. Hopefully, it will be debated in March*, although that is just a day before the consultation ends. There has been no other opportunity for councillors to discuss the funding proposals. Parents and governors of schools should respond to the government’s proposals

I support the retention of small local primary schools where children can walk or cycle to school and the school can be a focal point for the community. It seems this model isn’t fashionable at Westminster, where larger more remote schools serving several neighbourhoods seem to be what is wanted. I know that retaining small local schools looks like an expensive option, but there are also benefits to family and community life by educating young children in their localities.

Were the local authority still the key policy maker for education, I am sure there would be a local initiative to the preserve the present distribution of schools by driving down costs. In a recent piece in this paper, the head teacher of Oxford Spires Academy specifically complained of the cost of recruitment advertising. Three years ago, I helped a group found a new free job board for schools that uses the disruptive power of new technology to drive down recruitment costs for schools. TeachVac www.teachvac.co.uk now matches jobs and teachers throughout the country for free at no cost to teachers or schools. We need innovative thinking outside the box of this sort in all areas to help sustain our schools in the face of government policies that threaten their very existence.

Across the county, all schools, whether academies or not could collaborate to purchase goods and services needed, whether regularly or only once a year.  This common procurement idea is much easier when academy trusts are headquartered locally. It becomes more difficult when their central administration has no loyalty to Oxfordshire. May be that’s why local academy chains have been more restrained in their executive pay than some trusts with a more limited local affiliation.

Cllr John Howson is the Lib Dem spokesperson on education on Oxfordshire County Council and a founding director of TeachVac http://www.teachvac.co.uk. He is a visiting professor at Oxford Brookes University. 

*The motion was debated and passed without the need for a formal vote. Councillors from all Parties expressing assent.

Funding takes centre stage

The launch of a report by the Education Policy Institute about the new government funding formula seems the have unleashed a renewed interest in the proposals, at least the proposals for schools, if not for the SEND High Needs block. https://epi.org.uk/report/national-funding-formula/ Even the, soon to be Osborne edited, Evening Standard had an editorial about the funding of schools in yesterday’s edition.

The issue about school funding breaks down into two quite separate parts. Firstly, is the formula an improvement on what has gone before and secondly, is there enough money for schools and education in general. The answer to the latter is a resounding NO from almost everyone.  Hamstrung as it is by the-U- turn on increase in tax on the self-employed the government could have found a fig leaf to offer schools, such as abolishing the apprenticeship levy as the education budget already pays for teacher trainees; they could be re-badged as apprentices and it would at least help reduce taxation on schools facing NI and pension increases this year. The government also look guilty of breaking another manifesto promise. The 2015 General Election Conservative Party manifesto said:

“Under a future Conservative Government, the amount of money following your child into school will be protected. As the number of pupils increases, so will the amount of money in our schools. On current pupil number forecasts, there will be a real-terms increase in the schools budget in the next Parliament.” (Bold added by me)

On the first question about the new formula, the answer you receive will depend upon who you ask. Most of London loses and is unhappy, many urban areas outside London see gains, but these are capped and the picture in the rural areas is confusing: some win, others such as Oxfordshire have many schools that are losers. Thus, few feel really satisfied, especially when looking at the overall financial situation for their school over the remainder of this parliament

Part of the problem might be that civil servants don’t seem to have fully road tested the formula. Did Ministers allow them to? But, can we afford to close small secondary schools in the Yorkshire Dales; in Shropshire and no doubt in some other rural counties? The notion of rural seems different when decided at Westminster than when viewed from a county hall. In this lies the dilemma: in a national service, how much local discretion do you allow? Apart from rural schools, separate infant and junior schools will largely become a thing of the past under this new formula, as will small faith schools, many in urban areas on restricted sites that don’t allow them to expand. Is this what the government wants? Are large schools regardless of distance from a pupil’s home what is needed for efficiency in a time of austerity?

Why is the proposed formula slanted towards secondary schools when the Pupil Premium is primarily aimed at primary and early years’ pupils? What is the point of such a weighting for deprivation being different between the two funding streams? The period between now and the close of the consultation and what happens afterwards will be an interesting time.

 

Funding: the good years and the bad

The well-respected Institute for Fiscal Studies has today published a longitudinal study into the changing levels of education finance. https://www.ifs.org.uk/publications/8937

However, although factually accurate, as local authorities do still ratify the funding formula, the following statement early on in the report might be regarded as potentially mis-leading:

At the moment, it is local authorities that are responsible for determining the level of funding for state-funded schools. Each local authority receives a grant from central government, which it then distributes to schools in its area using its own funding formula.

After all, it is the Schools Forum, assisted by officers that decides on the local formula. Politicians, those that comprise the local authority, realistically now have no say in the matter, unless they are governors and elected through that route to the Schools Forum.

However, what the IFS have reminded us, at least in respect of schools, is that the 1990s were a period of funding constraint that lasted until the Blair/Brown leadership team took the brakes off education funding after their first few years of government when they were endorsing the Tory spending plans they had inherited in 1997: subsequently there was a period of increased funding as the new century unfolded. This allowed the creation of PPA time in primary schools and the growth in support staff numbers as well as generous spending on IT and improvements in pupil teacher ratios.

As this period coincided with the demographic downturn in pupil numbers, schools were relatively well funded, although the long period of decline in 16-19 funding commenced. The coalition supported school funding after 2010, but everyone now agrees that the next few years are likely to see reductions in real terms in school funding that will only be partially masked by increases in pupil numbers and any new national formula.

Even with tight floors and ceiling, there will be winners and losers with the new formula. This is partly because the gaps between the decisions on funding go way back into education history and are frequently associated with the municipal attitude to education and the size of the local tax base. When business rates were collected and spent locally, areas with good levels of industry and commerce often had well-funded education systems. As manufacturing and other industries declined, so did local funding and eventually business rates were nationalised. Successive governments missed opportunities to reform the basis of school funding preferring just to transfer the budgets to schools and away from local authorities and their politicians.

So, what happens now? If there is to be a period of austerity associated with cuts to funding to schools it is imperative that the cash is used wisely. But one person’s saving can easily translate into another’s burden. Close rural primary schools and someone has to pay for the transport of the pupils to another school. The same is true if small sixth forms are axed as no longer affordable. In the commercial world it is clear who takes decisions over cutting branches of banks or supermarkets that don’t pay. Who now decides on where schools are located: parents through the admissions system; the EFA as the national funding agency; MAT; Regional School Commissioners, but not presumably local authorities?

Many of the issues fudged when funding was adequate cannot be ignored when cash is being squeezed out of the system.

 

 

Have you tried TeachVac yet?

Recently, a head teacher told me he wasn’t using TeachVac www.teachvac.co.uk because there must be a catch. I don’t see how you can offer a free service without there being a catch, the head told me. Clearly, this head wasn’t a user of twitter, Facebook, LinkedIn or one of the other disruptive new technologies that are free to use. I wonder if this head grumbles about the cost of recruiting staff, but doesn’t do anything about it.

Now let me be absolutely clear, and please do pass this on to others, TeachVac www.teachvac.co.uk was established to do two things. Firstly, to offer a free recruitment service to schools, teachers, trainees and returners and, secondly, to use the information to collect better data on the working of the labour market for teachers about which in recent years, since the decline of the local government employers surveys, we have known relatively little.

I suppose it is the cynicism of the current age that many in education don’t believe a group of individuals would have set up TeachVac in the way it was just for altruistic reasons. But they did.

Does TeachVac pass on details of those that register to anyone: no it don’t. Does TeachVac bombard users with adverts every time they log on or receive a match; no it doesn’t. Is TeachVac a front for a larger organisation trying to corner the recruitment market that will then charge monopoly prices once it has removed the competition: no it isn’t.

My motivation in gathering a group of like-minded individuals around me to establish TeachVac was based upon putting back something into the education world in the only area where I had some expertise. A decade ago, the government tried to help the recruitment of teachers through the School Recruitment Service: it failed. Why it failed makes for an interesting story and tells us much about the nature of schooling in this country. Happily, most of those that lead our schools are more interested in teaching and learning and the pupils in their charge than worrying about the systems that support them. Unhappily, without a supportive middle tier this can lead to heads relying on those that don’t seem to have an understanding about driving down costs.

Now, it may well have been legitimate to say when we started nearly three years ago; we will wait and see if TeachVac succeeds. After all, nobody wants to sign up for a one-day wonder. But, Teachvac has now into its third recruitment round and hasn’t missed a day of providing matches when there have been new vacancies to match. You cannot do better than that for service.

With the demise of the National Teaching Service, before it even ventured beyond the pilot stage, and the Select Committee today endorsing the need for a national vacancy web site as a way forward, as I mentioned in my previous post, TeachVac is there for the sector to take-over. In another post, I will explain what is stopping that happening.

 

Making money from schools

Why would anyone want to take the risk of running a ‘for profit’ school when there are so many easier way to make money out of state education? At one time, companies and foundations from the USA and Sweden were going to revolutionise schooling in England, while making a profit at the same time. Seems it didn’t happen quite that way. The academies that both the Erudition Schools Trust and the Learning Schools Trust opened have all been re-brokered away from the groups that originally founded them and now both of the groups are seemingly no more.

Another education experiment originally from the age of new Labour capitalism has bitten the dust. But, that doesn’t mean you cannot make money from schools. Books, furniture, resources, services such as accountancy, human relations, payroll and legal services, as well as construction and the maintenance of school buildings and facilities can all be offered at a profit. Then, as regular readers know, there is the recruitment industry that thrives on helping schools find staff.

Many years ago, in 1999 to be precise, the then Education Select Committee started an inquiry into ‘The role of private companies in the management and supply of state education services’. I don’t think it was ever completed.  I noted in my written submission that J S Mill had taken the view  in his essay  entitled On Liberty that the role of the state was to ensure the education of its citizens and not necessarily to operate the schools. The question was, and still is, how can The State achieve its end of educating its citizens without paying more of taxpayers’ money than is necessary?

The National Audit Office and the Public Accounts Committee are there to see that where possible public funds are used judiciously. I would say wisely, but I am not sure that is always the case. Mill, was convinced that the State should not necessarily run the service of education. But are politicians and these days, educationalists, any better at obtaining value for money if the service is run by others: sometimes not.

In 1999, I pointed out that the CEO of an education company with a turnover of £48 million earned £122,000 whereas a Chief Education Officer, remember them, of an authority with an education budget of more than £150 million didn’t even earn a six figure salary.  Presumably, the difference was the price to be paid for risk. You can find the same differentials today between CEOs of MATs and chief officers in local authorities, but with, in my opinion, less justification.

Some of us do try to challenge the orthodoxy, by taking the disruptive approach allowed by new technology. TeachVac www.teachvac.co.uk is one such attempt. Like Twitter, Facebook and many other on-line service sit is free to users and makes its money in other ways. In the case of TeachVac, analysing the growing amount of data and using it to provide additional paid services.

With growing concerns about school funding it is time to develop mechanisms for driving down private sector charges to schools. The government’s recent initiative in IT procurement is a good example of what can be achieved.