Transcript School Funding Reform: Next Steps

School Funding Reform
Susan Acland-Hood
Director of Education Funding, DfE
F40 Fair Funding Conference
Thursday 6 February 2014
A look back on 2013
The financial climate remains challenging
But the schools budget has been protected and prioritised
• The schools budget will be protected in real terms in 2015-16.
• We will consult on how best to introduce a new national funding formula to make
sure that money is distributed fairly and transparently.
• The pupil premium will also be protected in real terms, continuing our commitment
to support disadvantaged pupils.
• We will continue to fund the growth of our flagship academies programme but we
will also make sure that the central costs come down, saving £150m in 2015-16.
• Savings of £200m to the Education Services Grant, reflecting the evolving role of
local authorities.
We know the current system needs reform
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A school in Birmingham which has only 3% FSM pupils receives more funding than a school in Shropshire
which has over a third of FSM pupils.
A secondary school in Lancashire with 337 pupils and 34% FSM pupils receives 46% more funding than a
school in Hertfordshire with similar characteristics.
A primary school in Birmingham with 203 pupils and 55% FSM pupils receives 37% more funding than a
similarly sized school in Salford.
Level of funding of schools
with high deprivation intake
Level of funding of schools
with low deprivation intake
Phase
Size
Primary
Phase
>=300 pupils
FSM Ever 6 %
0% to 5%
EAL 3 %
0% to 5%
LPA %
0% to 5%
Size
5
FSM Ever 6 %
EAL 3 %
LPA %
Primary
>=300 pupils
25% to 30%
0% to 5%
15% to 20%
It has not kept pace with changing pupils’ needs
£4,700
45%
£4,600
35%
£4,400
30%
£4,300
£4,200
25%
£4,100
20%
£4,000
15%
£3,900
10%
£3,800
Proportion of Pupils with Characteristic
40%
£4,500
SBUF (LA per pupil funding rate)
• Reading, Croydon and
Hillingdon all have a higher
proportion of pupils with
FSM and English as an
Additional Language but
lower rates of funding
when compared with
Lancashire, Wakefield and
Southend-on-Sea, even
after we adjust for
difference in area costs.
5%
£3,700
Southend-on-Sea
Wakefield
Lancashire
Hillingdon
Croydon
0%
Reading
£3,600
ACA deflated 2013-14 Schools Block per-pupil Unit of Funding (£)
FSM 2013
EAL 2013
Source: Published 13/14 DSG Allocations & SFR21/20113 “Schools, pupils and their characteristics: January 2013”
We made a number of important changes in 2013-14
The 2013-14 changes were our first step towards a national funding formula. We have:
• Improved the transparency of the Dedicated Schools Grant – allocating funding through 3
identifiable blocks for schools, early years and high needs
• Simplified local formulae – moving from 37 variable factors to 12 comparable and consistent
ones
• Ensured maximum delegation to schools – giving head teachers greater control and ending
schools-block LACSEG
• Simplified and speeded up the process for funding academies – reducing the time lag from 17
months to 5 months
• Streamlined funding for pupil with high needs - ensuring that specialist and mainstream
settings are funded on an equivalent basis
In 2013, more funding was based on pupil need
The early signs are that we are succeeding in moving towards a more pupil-led system.
In 2012-13 most authorities distributed between 60% and 75%* of funding through their pupil
led factors. In 2013-14 however, all local authorities (with the exception of the Isles of Scilly) are
allocating at least 77% per cent of funding through a combination of the pupil-led factors.
Number of LAs
Total % of funding through pupil led factors
80
70
60
50
40
30
20
10
0
70
69
41
32
27
10
10
8
0
0
20
1
0
1
18
7
12-13 Funding
2
1
14
13-14 funding
* For this analysis, we derived the 2012-13 schools block pupil led funding by excluding some lines we deemed as ‘early years and high
needs’ funding from the 12-13 ‘school budget shares’ on section 251. We then aggregated them up to LA level. For 13-14, we used the
schools block proformas . In both cases we identified the AWPUS, deprivation, prior attainment, looked after children and EAL as pupilled factors.
And there was greater consistency in the per-pupil rates
In both primary and secondary phases, we can see some consistency in the per-pupil allocations
and increases compared to 2012-13. The majority (83%) of local authorities set their primary
AWPUS within the range of £2,250 to £3,250.
50
45
40
35
30
25
20
15
10
5
0
45
46
35
33
28
17
7
10 10
0
2
KS3 Basic amount per pupil
Number of LAs
Number of LAs
Primary Basic amount per pupil
30
19
5
12
6
24 01 03 01 12
40
35
30
25
20
15
10
5
0
37
36
32
31
30
25
22
18
17
12
3
5
0
0
0
1
7
7
1
2
6
0
0
3
6
00 1
For KS3, 76% of local authorities are allocating between £3,500 and £4,500 per pupil, and for
KS4 74% are allocating between £4,000 and £5,000 per pupil.
12-13 funding
13-14 funding
And overall a very large proportion of the budget was being
allocated through the basic entitlement
Almost half of local authorities are allocating between 75% and 80% of their schools block
funding on the basic per-pupil entitlement – significantly more than in 2012-13.
Basic entitlement as % of total funding
80
67
70
Number of LAs
60
50
45
40
34
33
12-13 funding
28
30
23
20
13
10
10
5
0
13-14 funding
22
0
0
12
5
2
5
0
00
00
0
Less 50% to 55% to 60% to 65% to 70% to 75% to 80% to 85% to 90% to 95% to
than 55% 60% 65% 70% 75% 80% 85% 90% 95% 100%
50%
But there was still considerable variation on other factors –
deprivation, in particular, is complicated
Two-thirds of local authorities are allocating between £1,250 and £2,750 per FSM pupil but the
total range of funding spans from below £500 to over £5000 per FSM pupil.
In turn, the proportion of funding spent on deprivation also varies across the country from 1%
to 25%. We recognise that this variation is due not only to the variation in funding levels
across the country, but also to the approaches that different authorities take in targeting
funding to deprived pupils.
We continued our reform programme for pre-16 funding
Following the review of the 2013-14 funding arrangements, we made some important changes
for 2014-15:
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A new sparsity factor to support small schools in rural areas
Flexibility to set separate lump sums for primary and secondary schools
Flexibility to support good or outstanding schools with falling rolls (if population is set to
rise)
A requirement to spend at least 80% on the pupil-led factors
The review was shortly followed by an announcement in the June 2013 spending round that we
would consult on how best to introduce a new national fair funding formula in 2015-16.
We’ve spent the past few months considering some important questions:
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What is ‘fair’?
Should we prioritise moving schools quickly to a new formula or should we prioritise stability
and move at a more considered pace?
Should the priority be to pull low-funded areas up?
How do we balance the need for a simple and transparent formula against the need for
responsiveness to the particular circumstances of schools?
We also made important changes to high needs funding
New arrangements for 2013-14 meant that:
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Schools meet any extra costs for children with SEN up to £6,000 – the threshold will be
mandatory for all LAs in 2014-15
Schools receive the funds to meet the needs of all their pupils up to this threshold through
the local formula which includes factors such as FSM and prior attainment
For costs above this, the pupil’s home LA provides top-up funding
For special schools and units, the LA/EFA funds every place at £10,000, and then the LA
provides top-up funding for excess costs – this will apply to all age groups 2014-15; for 201314 post-16 pupils get a different amount
LAs have the flexibility to give extra funding to some schools with a high proportion of pupils
with SEN, where the local formula is not able to target SEN funding effectively
We believe there is a continuing need for LAs to explain to their schools how the new high needs
funding system works, so that they are reassured that funding is still available.
And some LAs probably need to look again at how they derive the notional SEN budget and how they
support schools with high concentrations of pupils with SEN. We have sought to provide maximum
flexibility to allow this.
We are extending Free School Meals
• Every child in reception, year 1 and year 2 in state-funded schools will receive a
free school lunch from September 2014.
• The aim is to improve academic attainment and save families money – over the
course of a year the average family spends £437 on school lunches per child
• Approximately 4 in 10 children living in poverty not eligible for free school meals
• In pilot areas:
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students were found to be on average 2 months ahead of their peers elsewhere
around 2% more children reached target levels in Maths and English at Key Stage 1;
while at Key Stage 2 the impact on achievement of between 3% and 5% was a bigger
improvement than the 3.6% boost that followed the introduction of a compulsory
literacy hour in 1998
academic improvements were most marked among children from less affluent families
there was a 23% increase in the number of children eating vegetables at lunch and an
18% drop in those eating crisps
• Disadvantaged students at sixth form colleges and further education colleges will
also be eligible for free school meals from September 2014.
• Overall cost of approximately £600 million
We also published a review of efficiency in schools
We found some interesting new results
Another interesting new result
We committed action to support efficiency
• Introduce a simple indicator of overall school efficiency for schools to compare
their effectiveness with other schools.
• Develop a benchmarking report card comparing financial and performance data
with similar schools
• Work with schools to exploit economies of scale in national purchasing and develop
a real time price benchmarking system
• Provide greater access to clusters by providing small start-up grants to enable
clusters of primary schools to take on an SBM
• Strengthen our expectations of governor’s roles in driving financial efficiency and
develop financial training specifically for governors through the National College.
• Remove unnecessary restrictions that constrain how workforce decisions can be
tailored to the requirements of individual schools
A look ahead to 2014
We will confirm arrangements for pre-16 funding
On the Dedicated Schools Grant:
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Ministers announced last summer that we would be consulting on a National
Fair Funding Formula.
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We will shortly be publishing a document with proposed arrangements for
2015-16.
On Universal Infant Free School Meals
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We will confirm the allocations for each school and details of how we intend to
allocate £22.5m to small schools in 2014-15
We will implement recommendations from the Efficiency
Review
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We expect to introduce a new summary schools benchmarking report card this
year
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As part of that, we are developing options for a new metric which will enable
schools to compare their efficiency with other schools of a similar type
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We are developing new material for training school governors on financial
matters which will be available in April
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We hope to run a grant scheme this year to promote the employment of school
finance managers by about 200 clusters of primary schools
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We are continuing work on securing better purchasing deals for schools and on
providing them with a better tool on which to see the best deals that are
available
Questions?
If you don’t get a chance to ask your question today, here are my contact details:
Susan Acland-Hood
Director, Education Funding, DfE
[email protected]