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Poorest schools to receive £350m cash boost, but must wait for new national funding formula

The poorest funded schools in the country are to receive a cash boost after ministers announced that they will receive an extra £350 million from next year.

In statement to the Commons on Thursday morning, schools minister David Laws unveiled the additional pot of money, which he said was the “first huge step” in correcting an historically “unfair” school funding system.

Due to quirks in the current funding system, schools with the same characteristics and just miles from one another can receive wildly different sums of money as a result of which local authority they are in.

Mr Laws said a school in Birmingham with just 3 per cent of pupils in receipt of free school meals can get a higher level of funding than a similar school with 30 per cent of students on free school meals just a few miles down the road in Shropshire.

The money, Mr Laws said, would come from the existing protected schools budget as well as from extra cash handed over by the Treasury, but he stopped short of stating when a reformed national funding formula would be introduced.

“Given the importance to schools of stability and certainty in these difficult economic times, we have decided not to set out a multi-year process of converging all local authorities towards a single funding formula,” he said.

“We have concluded that the right time to do this would be when there are multi-year public spending plans, so we can give greater certainty to schools.”

And he added: “But the case for action is so strong that we intend to act immediately to deliver a substantial £350m boost to schools in the least fairly funded local authorities in the country. We will be able to achieve this without any local authority receiving a cut to its per pupil schools budget.”

The move means schools will receive a minimum funding level for the full basic amount, as well as deprived pupils, students with English as an additional language and even those with poor prior attainment. 

The extra money will mean schools in local authorities such as Cambridgeshire will receive a boost of around £20m from 2015/16.

In total around 60 local authorities, mainly in rural areas, will receive more cash, but some towns and cities will benefit, including Stoke-on-Trent Central, the constituency of shadow education secretary Tristram Hunt.

But while the extra money was welcomed by heads’ union the NAHT, it said it would be the last schools will hear of a fairer national funding formula during this parliament.

“It sounds pretty welcome,” Russell Hobby, NAHT general secretary, said. “They have done it without taking money from other schools’ budgets and connected the minimum funding level to things like deprivation, which is a good move.

“But it’s not a national funding formula and I think this is as far as it is going to go, certainly in this parliament. We have been waiting for a consultation on the fairer funding formula for months now, and this announcement suggests we won’t hear any more.”

Responding to Mr Laws’ statement, shadow schools minister Kevin Brennan demanded to know where the cash for the new funding formula would come from.

Mr Brennan also asked his opposite number to confirm there were “no losers in this announcement” and he suggested the government would hit areas with losses after the 2015 general election.

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