Analysis: Are local authorities about to scupper the DfE’s school funding plans?

13th July 2017 at 17:46
A "soft" landing for the government's funding overhaul would see councils retaining some powers over school budgets – but would they use them?

The education world is poised to discover what is in store for school funding.

The government is set to confirm the amount of money schools will receive over the next five years, as well as its final plans for a national funding formula. Many experts expect this to happen by Thursday, when Parliament rises for the summer recess.

It is widely expected that the formula will be introduced in a “soft” form for the foreseeable future, owing to the hung Parliament.

This means that the overall funding pot for each local authority will be set according to the formula, but councils will be responsible for allocating that money to schools in their patches.

In theory, town halls would not be obliged to hand schools the precise amounts they are “owed” under the national formula. But would they take advantage of this power?

Why would local authorities want to veer away from the national formula?

Councils argue they are often best-placed to make school funding decisions.

The Local Government Association says the formula set out last December is too rigid. For example, it could restrict the ability of councils to prop up their budgets for pupils with special educational needs and disabilities (SEND) – which are under increasing pressure - with cash taken from other parts of the schools budget.

Another concern is the amount of money that the formula would hand to schools with high numbers of deprived pupils.

Tes understands that some local authorities would choose to spend less on these pupils, if given the chance, in order to free up money for struggling small schools – perhaps by calculating “deprivation” in a narrower way than is set out in the national formula.

The F40 group of local authorities that have historically attracted the lowest levels of school funding strongly argues that the formula gives too much to disadvantaged children who already attract pupil premium money. The group has outright rejected the formula as it stands.

The amount of overall school funding that the government provides is likely to affect the scale of any rebellion against the formula – particularly among historically lower-funded areas expecting a budget increase. These areas – many of which are represented by backbench Tory MPs – would take strong exception against any plan that would still deliver school cuts.

Could local authorities choose to completely ignore the formula?

No. Central government already imposes restrictions over the “local formulas” currently used by councils to distribute school funding.

For example, local authorities have to provide a basic “per pupil entitlement” of at least £2,000 for primary pupils and £3,000 for key stage 3 and 4 pupils.

They must also take into account the deprivation levels among pupils at each school, although there is flexibility over how they calculate this.

Is there anything else the government could do to further restrict councils’ powers?

According to the Education Policy Institute, the Department for Education could “significantly reduce the role of local authorities through secondary legislation”.

This could, Tes understands, involve setting a specific amount for the “per pupil entitlement”, rather than simply a minimum value.

Or the DfE could, for example, change the size of the “lump sum” that councils are allowed to give pupils – which could affect smaller schools in particular.

What other restrictions do councils face?

Councils could face a local backlash if they give schools less than they are owed under the national formula.

Tes understands some councils believe it would be possible to persuade some schools to sacrifice a portion of the funding they would have been allocated under the national formula, in order to help nearby schools in particularly dire financial straits.

But this is likely to involve difficult local discussions, especially if schools are facing real-terms cuts.

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