Defining ‘fair funding’ for schools

So far, DfE hasn’t provided a clear definition of what ‘fair funding’ for schools would look like, focusing instead on a deficit model: the obvious unfairness of significant differences in funding between similar schools. The Secretary of State cites two identical schools with a difference of over 50% in their funding. Have you found an identical school to yours and how do you compare?

We’ve been round this loop before, when there was extra money in the system. How much easier it would have been then, to give more to those who were not being provided for fairly. When you can only right a wrong by taking money away from another set of children, a shadow is cast over the process, setting school against school, and LA against LA. The cries of ‘unfair’ are likely to be amplified.

Given the challenges, perhaps it’s not surprising that the tone has changed slightly, with more references to ‘fairer funding’, although the Chancellor’s Blue Book still refers to a national fair funding formula. I will comment in a later post about the implications of including early years and high needs funding in the review.

To manage expectations, DfE needs to be more specific about what constitutes fair funding for schools. Some articles have referred to the lowest funded authorities needing more money. But most people would say fairness implies funding should be aligned with needs. Some schools and areas will always receive less than others, because their needs (and therefore their requirement to spend) are lower.

Someone asking for directions for the journey might well be met with the response ‘Well, I wouldn’t start from here’. There are two main reasons why we have such a wide range of funding at individual school level:
• Idiosyncrasies in the current Dedicated Schools Grant (DSG) per pupil rates, derived from what local authorities (LAs) were spending in 2005/06;
• LA decisions on how much goes into each pot within the local school funding formula.

(Note that the Schools Forum takes decisions on the structure of the formula, but can only advise the LA on the values applied to each factor.)

The critical issue is how great the funding variation should be between schools with different needs. The government will decide which factors should still be included in a national formula, and what proportion of available funding should be allocated to each one.

What weightings will DfE attach to deprivation, to English as an Additional Language, prior attainment (as a proxy for lower level SEN), small schools, regional cost differences and so on? Will high pupil mobility still be recognised? Deprivation will attract considerable discussion, because of the attainment gap. Will the additionality of the Pupil Premium be diluted or lost, posing a risk to the long-standing aim of narrowing the gap?

Inevitably there are many parties lobbying for their own interests, but fair decisions need to be rooted in a clear and impartial evidence base. Never has it been truer to say you can please some of the people some of the time…

This year DfE started to address the issues. An extra £390m was given to a range of authorities, using a notional formula based on the national average for every individual formula factor (although some factors were scaled back to what was affordable). If this produced a higher allocation than the existing grant, the authority received the higher amount. While we should be pleased that the extra £390m is now locked into DSG, the calculation used isn’t sustainable: average factor values would continue to rise. A new approach is needed.

DfE needs to be clearer about whether LAs will completely lose their discretion over the distribution of money between local schools. Will adjustments be possible (to a limited extent) for highly significant local issues that are not catered for in the national formula? Will LAs still be able to move money between blocks, e.g. to address rising high needs?

What about Multi Academy Trusts? They currently receive the grants for all their academies, and can redistribute the funding between them on the basis of the Trust’s priorities. If this is still permitted, it could pose a serious practical obstacle to achieving DfE’s goal of equivalent funding for schools with similar characteristics regardless of their location.

It will take one huge balancing act to address these issues. The devil really will be in the detail, and the sooner the debate starts, the better. There will be a lot of schools and LAs anticipating gains from the process, and many may be disappointed if these do not materialise. Schools urgently need to know if they are facing cuts, how much they could lose, and how soon they will lose it.

Let’s hope the promised consultation is a genuine one, with transparent examples of the impact of different options, and objective responses from stakeholders that are taken seriously when Ministers make their decisions. Otherwise, DfE needs to brace itself against accusations of unfair funding.