Fairer funding – when can we expect it?

What do we want? Fairer funding. When do we want it? Now!
So goes the cry from schools and areas that consider they are not currently funded fairly. At last the government has accepted it’s urgent. However, as I said in my previous post, you wouldn’t want to start from here; we have a complex historical system to unravel.

Will we ever reach a point where funding is agreed to be fairer? DfE would do well to add a note of caution in their communications about the length of time it might take to see much of a difference, given where we’re starting from.

As an example, consider the 2013/14 simplification of local formulae, which reduced the number of factors LAs could use. This caused a redistribution of funding, not between areas, but between schools within each LA. No extra funding was provided for the increases. However, schools losing funding were given Minimum Funding Guarantee protection, limiting losses to -1.5% per pupil per year.

In some areas there wasn’t enough money to cover the cost of protection while funding the increases. LAs were therefore allowed to reduce the extra funding that the gainers were entitled to, in order to balance to the available pot. To boil it down to its simplest form, let’s refer to this as capping.

In 2013/14, the first year of the simplified formula, on average 35% of schools in both sectors received Minimum Funding Guarantee protection. Two years later, 22% of primary schools and 19% of secondary schools are still being protected. In one LA, the figure is 95% of primary schools, and in four LAs, 100% of secondary schools. There don’t appear to be any published statistics on the extent to which gains are being capped to pay for these ongoing levels of protection.

The outcome of this balancing act isn’t even, nor is it predictable. The LA currently decides annually how much money goes into the different factors (e.g. primary per pupil compared to KS3/4, deprivation rates and so on). In future DfE will decide. This drives the total level of protection needed in an area, which in turn determines how many schools need to be capped. Over time, protection reduces, releasing the extra funding to the gainers.

The problem is that when there is no extra funding in the system, the need for protection slows down the journey to the new formula.

Given that the new formula is likely to involve a major redistribution of resources between LA areas, it is possible that a good number of LAs will see a majority of their schools requiring protection. The rate of change for gainers could be even slower than in the 2013/14 reforms, unless losses are implemented rapidly.

Predicting the pace of travel towards the pure formula for local schools will be tricky; if capping is calculated nationally, it will depend on the overall level of protection and the rate at which this decreases. DfE says there will be a transitional period, but we don’t yet know how long this will be, nor what it means in practice.

The key question is how much annual protection does DfE intend to give to those losing out from the new national formula?

This will be crucial in determining the speed at which extra money will get to the winning schools. I would expect the consultation to seek views on the sort of reduction that could be achieved without impacting adversely on standards, but naturally there are many different views on that.

The higher the protection, the longer it will take for the winners to see the extra money in their budget shares. So schools that believe they should gain substantially from the new formula may have a long wait. It’s going to be interesting to see how this plays out over the coming year.