School funding increases following the government’s latest “levelling up” deal will benefit pupils from more affluent backgrounds the most, a new analysis reveals.

Over a four-year period, disadvantaged pupils and pupils from ethnic minorities or with English as a second language will have received real-terms funding increases at around two-thirds the rate of their better-off peers, an analysis by the Education Policy Institute, published today, shows.

Between 2017-2018, the last year before the introduction of the new National Funding Formula, and 2021-22, in both primary and secondary schools, pupils eligible for free school meals will have received increases at around two-thirds the rate of their more affluent peers.  

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White British pupils will have seen increases at nearly double the rate of non-white British pupils, while pupils for whom English is an additional language (EAL) will have received increases at half the rate of pupils for whom English is their first language.

The difference between 2020-21 and 2021-22 is also striking, especially at primary school level.

Support for disadvantaged pupils

The analysis shows that in primary schools, while the average increase in funding is 1 per cent, pupils who are eligible for free school meals, have EAL or are non-white British will see an increase of 0.6, 0.3 and 0.5 per cent respectively.

Their non-FSM, non-EAL and white British peers will instead see their allocated funding increase by 1.1, 1.2 and 1.4 per cent respectively.

At secondary level, the difference is less pronounced. Both FSM and non-FSM pupils will receive a real-terms funding increase of 0.5 per cent.

However, non-white British pupils will see an increase of 0.3 per cent against a 0.7 per cent for their white British peers, and EAL pupils will receive a 0.2 per cent addition on this year’s funding compared with 0.6 per cent for their English native speaker peers.

Jon Andrews, author and deputy head of research at the Education Policy Institute, said:  “Our analysis shows that the longstanding link between school funding and pupil need is being eroded by the policy of ‘levelling up’.

“By directing a proportion of additional funding towards schools with historically lower levels of funding, the government is ensuring that pupils from more affluent backgrounds see greater increases than those from poorer backgrounds.

“The result is that over a four-year period, disadvantaged pupils will have received funding increases at around two-thirds the rate of their better-off peers.”

Narrowing differences and the coronavirus challenge

Pupils with FSM or EAL and non-white British pupils still attract more funding than non-FSM, non-EAL and white British peers (on average, £240, £330, and £310 respectively at primary level, and £370, £540 and £510 respectively at secondary level) to reflect the level of needs.

However, the report highlights that these differences are falling, with pupils with arguably higher needs receiving a smaller funding increase.

The prime minister’s drive to “level up” school funding, the EPI explains, means that more funding is directed towards schools that have previously been funded at a lower rate; schools which, on average, have fewer pupils from poorer backgrounds.

This means that the link between funding and pupil need is being weakened, the report claims.

And while there was emerging evidence that the attainment gap between disadvantaged pupils and their peers was at risk of widening even before the pandemic, schools closures have exacerbated inequalities.

David Laws, executive chairman of the Education Policy Institute, said: “School closures this year will have been especially harmful for the learning outcomes of the poorest pupils. Those from disadvantaged backgrounds will need maximum support to ensure their life chances are not damaged by this period of disruption.

“But by skewing extra funding towards more affluent pupils, the government’s approach of ‘levelling up’ school funding is fundamentally at odds with this goal.

“Now, more than ever, we need well-targeted policies to prevent a real social mobility setback in this country. There appears to be very little evidence of this in the government’s latest school funding plans.”

‘Not enough money’

Julia Harnden, funding specialist at the Association of School and College Leaders, said: “While we welcome the extra investment the government is putting into schools and its efforts to make the funding system fairer, the simple fact is that it isn’t enough money to do the job properly.

“The reason that the extra funding disproportionately benefits affluent pupils is that many of these children will be in schools in areas which have traditionally received the lowest funding rates and which are now being ‘levelled up’.

“These schools absolutely do need this extra money because they are in a dire financial situation.

“However, the problem is that many schools in deprived areas, where funding rates are higher to support disadvantaged pupils, are getting lower uplifts, because the government isn’t putting enough money into the system to increase their funding to the same extent.

“In fact, we are concerned that some of these schools may be worse off in real terms because school costs are rising above inflation.”

‘Badly’ targeted

Another way the link between need and funding is being weakened, the report argues, is by linking the Teacher Pay Grant to pupil numbers and not pupil characteristics.

The report reads: “This ignores the fact that schools operating in more challenging circumstances tend to employ more teachers and so will face higher costs from increased salaries.”

The TPG will be used for the final time in 2020-21 and then be incorporated into core schools funding, added to the basic per-pupil funding allocations. This means that its link to pupil numbers will be maintained.

Mr Andrews told Tes: “The TPG has always been linked with pupil numbers - we’ve long pointed out that it leaves poorer schools out of pocket.

“By being absorbed into core schools’ funding and still based on pupil numbers, it remains badly targeted.”

The average funding per pupil in the EPI analysis School Funding Allocation 2021-22 has been calculated on the basis of published school level allocations pupil characteristics data from the school census.

Pupil characteristics can overlap, but EPI told Tes that calculations of funding for pupils with overlapping characteristics (for example, an EAL pupil eligible for free school meals) were not possible with the available data.

A Department for Education spokesperson said: “Schools are receiving a £2.6 billion boost in funding this year, as we invest over £14.4 billion in total over the three year period through to 2022-23 compared with 2019 - giving every school more money for every child.

 “The funding formula continues to target funding to schools which have the greatest numbers of pupils from disadvantaged backgrounds, providing £6.4bn in funding for pupils with additional needs, representing 17% of the formula’s total funding.

“Schools which have been historically underfunded will also receive the greatest increase as every child deserves a superb education - regardless of which school they attend, or where they happen to grow up - with our £1 billion Covid catch up package on top of this, levelling up opportunities for every young person up and down the country.”