Prepare to tighten your belts

29th June 2007 at 01:00
Government squeezes budgets and plans raids on unspent cash in school accounts. But consultationto begin next month on improving funding system

schools' budgets are to become tighter under the new three-year funding arrangements announced this week - and it could lead to job cuts, say unions.

The Government confirmed this week that the per-pupil minimum funding guarantee, currently set at 3.7 per cent per year, could be set lower than anticipated cost rises from 2008 to 2011.

Schools will have to wait until the autumn before the new level of the guarantee is announced.

In a blunt statement, Jim Knight, schools minister, said that efficiency savings will have to be made and he has ratcheted up the mechanism for clawing back money unspent in school balances.

The Government estimates there is pound;1.6 billion languishing in school accounts. Local authorities will soon have to distribute 5 per cent of surplus balances.

AJmajorJconsultationJon developing a fairer and more transparent funding system will start next month and come into action around 2011. However, headteachers' unions have said this may be too long to wait for some schools.

But there was also some welcome news. Following the three-month consultation, ministers announced new "pupil by pupil" deprivation funding.

This will be allocated to tackle pockets of disadvantage in traditionally better-off areas. And grants will be available in exceptional circumstances, for example if there is a sudden surge in pupil numbers due to factors such as immigration.

There will also be a specific formula grant for funding for 14- to 16-year-olds taking diplomas.

As Chancellor, Gordon Brown made clear his aim to curb public sector spending and as Prime Minister he is unlikely to change his tune. However, he has repeatedly said he wants to raise the funding for state school pupils to that spent on private pupils in 2005-06, although no date has been set.

Unions are already angry that the Government refused to follow a School Teachers' Review Body request to revisit the current two-year pay deal in the light of rising inflation.

Malcolm Trobe, president of the Association of School and College Leaders, said that if the minimum funding guarantee dropped below cost levels in already poorly funded authorities, managers might be forced to cut staff to make savings.

"We need to see a clear definition of what they mean by efficiency in a school," he said. "It's not the same as industry: we don't have a simple inputoutput measure."

The Department for Education and Skills says it has increased funding per pupil by pound;1,800 in the past decade, equivalent to a 66 per cent real terms increase.

A spokesman for the Depart-ment for Education and Skills said headteachers will not be "left on their own" in working out how to make savings, and would be offered guidance on how to save on bills.

The department said it will consult widely on determining what shape a new funding formula for distributing the dedicated schools grant would take.

Local authorities' funding allocations and the schools' minimum funding guarantee for 2008-11 will be announced in the autumn. Budget shares for individual schools will be announced in spring 2008.

Details at a glance

Increases to the per-pupil minimum funding guarantee will continue, but at lower levels.

A review of the current funding formula will be launched in July and a new fairer system is planned to start around 2011.

Schools will be expected to make improvements in efficiency.

Tax credit data will be used to pinpoint pockets of deprivation and allocate additional money.

Exceptional circumstances grants will be available to schools with a sudden surge in pupil numbers or pupils who don't speak English.

A reform of funding in early years provision, to create a fairer system for both private, voluntary and maintained sectors.

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