16th December 2016 1:00
By Blue Tutors
The way schools are funded in the UK is set for a historic change in the next few years in a bid to make a fairer system than the status quo, which amounts to a “postcode lottery” for most children. Some schools with similar intakes receive 50% more than others; the amount of money spent per student varies wildly from £3,363 in Blackpool to £6,920 in certain areas of London. This has resulted in up to £20,000 spending gap by GCSE between pupil in the 10% of best and worst funded schools in similar areas.
This heterogeneity came about as the current system allocates money to schools through local authorities, who receive money from the Department of Education. In 2006, in a bid to ensure that funds were spent on schools and not on other investments made by local authorities, Labour ring fenced educational funding. A decade later, this strategy has backfired, as the distribution of spending has remained the same as that in 2006, despite significant demographic changes in the meantime. There are also 152 different local authorities each using their own way of deciding how to share money between their schools leaving highly inconsistent and precarious funding policies nationwide, leading many to call for a fairer system.
The government itself calls the current system “outdated, inefficient and unfair”. In order to address the regional variation in funding, the government has proposed a new system whereby funds are administered directly to schools from the central government, bypassing the local authority’s discretionary allocation. This fairer, more transparent and stable system calls for a national formula for calculating how much each school will receive. The new system will be more equitable on a per student basis, with a base rate per student, and then additional funding taking into account particular needs and geographic differences in the cost of operating a school. Factors like the number of students with English as a foreign language or from disadvantaged backgrounds (often taken as the number eligible for free school means), low prior attainment or special educational needs, as well as schools in rural areas and certain subjects will increase the per capita spending, whereas schools with lower fixed costs (eg. rent) because of their location will receive less.
Who are the winners and losers in this new system? One of the main aims of the new national funding formula is to address the disadvantages faced by schools in suburbs and shires. As such, on the whole, funds will be moved from urban to rural areas, with most major cities seeing up to 3% cuts in their budgets. The hardest hit is the City of London, however Manchester, Norwich and Wigan will also see large reduction. On the other hand, nearby Blackpool, Essex and Cambridgeshire will see a modest increase.
Nicky Morgan originally announced that the changes would come into effect in the academic year 2017/18, gradually phasing out the role of Local Authorities over a two-year period, however, after the change in Education Secretary, the shift has been postponed by a year until 2018. Justine Greening has added another 14-month consultation on the details of the changes to take place and on how to phase in the change for those expecting cuts. This has come as a hard blow to around 100 local authorities were promised an increase budget, many of which are already operating at a deficit and facing increasing pension contributions. There is a petition calling for an interim £20 million in ‘transitional funding’ to be spent to cover schools already at breaking point while they wait for the changes to come into effect.
Sadly, despite the overhaul of the system, there is no increase in the overall budget and does not obscure the ever-widening overall funding shortfall. Schools will have an 8% budget cut in real terms over the next 3 years, meaning even those who gain from the reallocation will see smaller budgets by 2020. The NUT says that the system is at breaking point, with many schools faced with no other option but to increase class numbers or cut the length of the school day, the number of teachers and the range of subjects they offer in order to find the savings they are being asked to make. The overriding message is that the new system is merely a redistribution but ultimately means cuts for 90% of schools, just more for some than others, leaving schools across the board in need of serious investment.