Deciding how to distribute billions of pounds of taxpayers’ money will always generate controversy, and the national funding formula for schools has been no exception.

But a sweetener offered by the government over the summer, in the form of a £1.3 billion boost, helped to make the formula far more palatable for many of its critics.

This money - taken from elsewhere in the Department for Education budget - was aimed at ensuring that no school will lose out financially when the formula is introduced in 2018-19. It means that every school can now expect a cash increase of at least 1 per cent per pupil by 2019-20.

But can there really be winners without there being losers, too?

One important detail in the final version of the formula published last week could store up “real problems” for the most needy pupils, a funding expert warns.

The change means that local authorities will, from next year, only be able to prop up their “high-needs” budgets with up to 0.5 per cent of the money from the main block of school funding they get from central government.

High-needs funding is aimed at pupils with special education needs and disabilities, and is under particular pressure as the number of SEND pupils grows - partly because of more conditions being diagnosed and partly because more children are surviving serious health conditions that cause developmental delays.

‘Real problems’

Julie Cordiner, an education funding specialist at consultancy School Financial Success, says that in 2017-18, 80 local authorities transferred a total of £118 million into their high-needs budgets. Of these, 44 would have breached the 0.5 per cent limit if it had been applied that year, she adds.

She warns that, as the pressure on high-needs budgets continues to grow, “there could be real problems” as a result of the new guidance. Transferring money to high-needs budgets will only be permitted with the agreement of local schools’ forums.

In contrast, some schools - such as those with low numbers of SEND pupils, or those in areas deemed to have been “under-funded” - are now set to see increases of up to 20 per cent over two years.

This is despite the fact that most schools will have any budget increases “capped” at 6 per cent over the same period.

The reason that some schools will be allowed to breach this limit is because the latest version of the formula exempts the new “minimum” per-pupil funding - amounting to £4,800 for secondary pupils and £3,500 for primary pupils - from the cap. This helps schools that receive a relatively low proportion of their funding from specific pots aimed at helping needy or deprived pupils.

A DfE spokesman confirmed that the change would be of particular benefit to schools that would not have attracted particular pots of funding associated with having, for example, a high number of SEND pupils or being based in a deprived area.

Primary schools in remote rural areas, meanwhile, have emerged as among the biggest winners. This follows fears that small rural schools would become financially “unsustainable” under the government’s earlier plans.

Funding levels for primary schools in “sparse rural areas” will rise by 6.7 per cent on average by 2019-20.

Overall, rural schools will gain 3.9 per cent on average, while schools in the most remote areas will see their budgets grow by 5 per cent.

More generally, however, there are questions over whether funding levels will be high enough, even with the additional £1.3 billion.

Geoff Barton, general secretary of the Association of School and College Leaders, says the funding still looks “way too low to allow schools to deliver the quality of education they want to provide and which pupils need”.

Ultimately, whatever the aim of the formula, individual school budgets will be decided by the preferences of local authorities (see pages 14-15), meaning we will have to pay close attention over the next year to determine who the true “winners” and “losers” will be.