The final version of the national funding formula (NFF) for schools was announced last week, in what education secretary Justine Greening hailed as a “historic” moment.

It follows years of calls for the big and sometimes apparently arbitrary regional differences in school funding to be ironed out. The new formula is aimed at ensuring that schools’ budgets are set according to a consistent set of national principles, based on the particular needs of their pupils.

But there are already good reasons to believe that this formula will not live up to its “national” billing. It is set to be interpreted differently by individual local authorities and “flipped on its head” by multi-academy trusts (MATs).

This means that, by the time the money reaches schools, their budgets could vary significantly from the amounts they are owed under the formula.

James Nicholson, director of finance and resources at the E-Act multi-academy trust, says his MAT is using the formula as a starting point, but will ultimately look at the circumstances of each school before deciding how to allocate money across the chain.

“We’ve started to move towards the NFF,” he says. “But rather than saying, ‘We’re working towards £x per pupil,’ we’ve flipped it on its head to say, ‘What does this school need?’”

Nicholson adds: “The MAT will be dealing with its specific circumstances and its specific schools. There’s an argument that a MAT might say, ‘That’s fantastic we’ve got the NFF. For our schools, in our specific circumstances, we might want to tweak that.’”

E-Act is unlikely to be the only MAT taking this approach, says Leora Cruddas, chief executive officer for Freedom and Autonomy for Schools. She believes her MAT members will use their “organisational autonomy” to decide for themselves how much money is required by the schools in their chains, after the formula comes in. Earlier this year, Academies Enterprise Trust’s director of education, Andrew Thraves, predicted that MATs would grow and become more spread out across the country as a result of the funding formula, in a deliberate attempt to balance out any gains or losses by schools within the chain.

He said: “Although the government suggests 20 schools is a good size, and localisation is good because of better communication, better running from the centre … in actual fact, with the NFF, you might argue the opposite - regionally disparate MATs, with schools in many different areas, are more likely to benefit or not lose out as much locally.”

Challenging the trusts

MATs are already able to pool a proportion of funding for the schools in their chain; the amount “varies enormously” depending on their funding agreements, says Julia Harnden, funding specialist at the Association of School and College Leaders. They can then distribute this money to schools, according to their financial priorities.

But this approach could be about to get much more controversial because of the Department for Education’s changes. Schools have been told that their budgets are being set according to a national formula, aimed at providing consistent levels of support for particular types of pupils - for example, those with special educational needs, from deprived backgrounds or with low prior attainment.

And the DfE has already published the amount that every school in the country can expect to gain under the formula, being introduced from 2018-19.

So if MATs choose to distribute funds in a way that diverges substantially from these official allocations, academy heads are more likely to challenge the decision, says Harden.

Cruddas says that MATs will set budgets for schools based on the principles of “fairness and equity” enshrined in the formula. “It’s up to the MAT to take an overview [of all their schools],” she says. But fairness is subjective. And, although controversial, the current plans have been arrived at following a democratic process involving two government consultations attracting more than 26,000 respondents, and countless parliamentary debates.

Is there a risk that MATs will undermine the notion of a “national” formula, by coming up with their own definitions of “fairer” funding?

Cruddas says that trusts will need to think carefully before transferring cash between schools. “The NFF seeks to address the historical inequities in the funding system. If the MAT was simply going to move money around to shore up the status quo, that would undermine the principles of the NFF,” she adds.

Malcolm Trobe, director of public affairs at ASCL, believes there could be justifications for MATs diverting money from one school to another; for example, fluctuating pupil rolls or a school in special measures that needs extra support. But he warns: “We don’t want money shifting around to deal with bad management or bad financial planning.”