Solve the formula problem;Opinion

Successive governments have clung to an unjust, over-complicated school funding system for political reasons, argues John Dunford. But the case for change is now irresistible.

WHEN it comes to schools, we are truly becoming one nation. We have the national curriculum, national testing at 5, 7, 11 and 14 and examinations at 16, 17 and 18. Class-size restrictions for younger pupils, targets for achievement at 11, 16 and 19, and the pay structure for teachers are all determined nationally. So why do we not have a national funding formula for schools?

Across the country, we shall soon have one system of performance-related pay and, probably, the same formula for all of our post-16 education in schools and colleges. The case for a national funding formula then becomes irresistible.

The existing school funding system is indefensible. There can be no sense in a standard spending assessment (SSA) system which allocates pound;2,620 for the education of a secondary pupil in Leicestershire but pound;2,927 for a pupil of the same age in Hertfordshire. The SSA for Manchester secondary schools is pound;3,494, while the comparable figure for Leeds is only pound;2,925.

The funding for primary schools is similarly inequitable, with pound;2,037 for pupils in Staffordshire but pound;2,228 for their more fortunate counterparts in Essex.

Inequalities are not confined to England. A 1,200-pupil comprehensive in the Vale of Glamorgan would have pound;250,000 more in its budget if it were situated in the neighbouring local authority of Ceredigion.

The culprit is the SSA, the formula by which central government money is allocated to local authorities and which is supposed to take account of local variations, such as additional educational needs and the number of children on free school meals.

A major injustice in the formula is the area cost adjustment, which fails to recognise that the price of books, computers, examination fees and many other items is the same throughout the country. The London weighting is the only difference in teachers' salaries, which are the same in all other areas.

The assessment formula is so arcane that its "scaling factor" runs to 14 decimal places and is said to be understood by only two people in the whole country.

What is needed is an activity-led funding model which does not use proxy indicators like free school meals, but lays down funding parameters in terms of educational activity - class size, subjects taught, age of pupils, and so on. A national funding formula based on activity-led funding could also take into account the precise effect of London weighting, the number of pupils with English as an additional language, prior attainment levels and any other parameters which affect the cost of education.

With an increasingly centralised system and 80 per cent of a school's budgetary obligations determined by a national pay structure, it is difficult to put forward cogent arguments against a national funding formula, but there are two main reasons why both Conservative and Labour governments have declined to change the SSA system. Both are political rather than educational.

When a Secondary Heads Association delegation met the combative education minister, Eric Forth, five years ago to discuss the appalling state of school funding, he was frank about his reasons for opposing the introduction of a national formula. "Changing the system will create winners and losers," he said, "and losers make more noise at election time."

The second reason, which also appeals to politicians of all parties, is that a complicated formula such as the SSA enables central government to blame local authorities for deficiencies in funding, whether the authority spends above or below the SSA level.

Even the most centralist of governments recognises that local government has its uses and this is certainly one of them. Inevitably, local education authorities continue the game of pass the parcel when blame is being allocated. A national funding formula would be more transparent and would expose the reality of who is responsible for school funding much more clearly.

Because of the way local taxes are now applied to education since the demise of the poll tax, it is harder for local authorities to make a significant difference to the education budget without a substantial rise in the council tax. This is the "gearing effect" - it takes approximately a 5 per cent rise in the council tax to produce a 1 per cent increase in spending on education.

If the local democratic process is not to lose its interest in education completely, then there has to be a place for local top-up in education spending; but the core funding for schools must still come through the tax system and a fair national formula.

The SSA is supposed to be a national formula which takes account of local conditions, but it is manifestly unfair - and young people in many parts of the country are disadvantaged by it.

John Dunford is general secretary of the Secondary Heads Association

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