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Answered: Six questions about the new schools national funding formula

Small, rural schools are set to gain under the changes, but schools in cities where affluence has grown will be hit the hardest

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Small, rural schools are set to gain under the changes, but schools in cities where affluence has grown will be hit the hardest

How is school funding changing?

At the moment, local authorities decide, within certain guidelines, how to distribute the money they receive from government between local schools. This means that a school in one part of the country could receive 50 per cent more funding than it would if it were based somewhere else.

To iron out these discrepancies, the government wants school funding to be set at a national level, using a formula that has been published today.

The new formula will take account of schools with high levels of in-year pupil mobility. It also places heavy weight on schools with pupils who are economically disadvantaged but are not necessarily on free school meals.

Which schools stand to lose out under the changes?

There are 9,128 schools that would have been funded at a lower level under the new funding formula, if it had been applied this year – 46 per cent of all schools.

The schools most likely to face reductions are in inner London and some other urban areas where levels of relative deprivation have fallen in recent years. The Department for Education document points out that London schools are still funded at the highest level of all schools, mainly due to higher salary costs.

There are 49 local authorities set to lose out under the formula.

By how much could funding drop?

The minimum funding guarantee will continue, meaning no school will lose more than 1.5 per cent for two years, or 3 per cent in total.

Are there any winners?

More schools – 10,740 – will win than lose, and 3,379 schools will see increases to their budget of more than 5 per cent. The maximum they can increase by in 2018-19 will be 3 per cent, rising to a further 2.5 per cent in 2019-20.

At local authority level, 101 areas will be better off under the formula.

The schools set to gain the most include;

  • Schools with high numbers of pupils living in disadvantaged areas that are not necessarily eligible for free school meals. Outside London, the average gain for these schools is 1.4 per cent.
  • Schools with the highest proportion of pupils with low prior attainment but which are not in areas of high deprivation. These gain 2.8 per cent on average.
  • Small, rural schools, which gain 1.3 per cent on average.
  • Primaries schools in sparse communities that are both small and remote, which gain 5.3 per cent on average.

The consultation document also makes three separate references to families who are “just about managing” – the JAMs whom prime minister Theresa May has repeatedly mentioned in speeches.

When will the changes take effect?

The introduction of the formula was delayed by a year, meaning it will come into effect in 2018-19. However, in the first year local authorities’ allocations will be handed down from the government using the new formula, but they will still able to decide how to share the money between the different schools in their area.

The following year most school funding will bypass local authorities altogether and be sent straight to schools. A £500 million pot of transitional funding is intended to support the move to a new system.

Can local authorities still put money from their main government grant towards pupils with special educational needs?

The “schools block” of the Dedicated Schools Grant will be ring-fenced, but councils will still have some flexibility in 2018-19 to move funding between the “schools block” and “high needs” blocks of money they receive.

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