|Date:||22 March 2017|
|Authors:||Chris Belfield and Luke Sibieta|
New funding formula could imply further cuts to per-pupil spending of 7% for around 1,000 schools after 2019–20
In a consultation that closes today (March 22), the government has set out ambitious plans to implement a national funding formula (NFF) for schools in England. Its goal is to ensure that similar schools in different parts of the country receive a similar level of funding per pupil. Given current inequities, this is a long overdue and welcome change.
Moving to a single funding formula inevitably creates winners and losers, and this reform comes at a time when schools budgets overall are under pressure. It would have been preferable to have reformed the system in the 2000s when there was more money around.
The government has thus proposed putting in place protections for schools up until 2019–20, which will ensure no school sees a fall in its budget of more than 3% in cash-terms between 2017–18 and 2019–20 (or a real-terms cut of about 6%). Because of these protections, and the fact that a number of schools are currently a long way from their implied formula allocations, only about 60% of schools will be on the main formula by 2019–20. Around 1,000, or 5%, of schools would still be more than 7% above the funding level dictated by the main formula, and could expect cuts of that magnitude at some point after 2020.
These are among the findings from a briefing note by IFS researchers, published today and funded by the Nuffield Foundation, which explores the government proposals to replace 152 different local authority funding formulae with a single national formula. This reform comes at a time when schools are part way through making their first real-terms cuts to school spending since the mid-1990s. The planned real-terms cut of 6.5% in spending per pupil between 2015–16 and 2019–20 would be the largest cut in school spending per pupil over a 4 year period since at least the early 1980s and would return school spending per pupil to about the same real-terms level as it was in 2010–11. In looking at the effects of the NFF up to 2019–20, we complement findings from the recent report from the Education Policy Institute, and we also extend this to look at potential scenarios after 2019–20.
As in the government proposals, all figures provided in this release are in cash-terms, unless otherwise stated.
Key findings include:
Luke Sibieta, an author of the report said:
“If fully rolled out across England, a national funding formula would ensure similar schools in different parts of the country receive a similar amount of funding. While this has been the ambition of successive governments, they have consistently shied away from the hard choices such a reform entails. The current government is to be applauded for making specific proposals and setting out the reasons for the choices it has made.”
Chris Belfield, another author of the report said:
“Somewhat inevitably, this reform creates winner and losers, and it comes at a time of severe pressure on school budgets as we are currently in the tightest four year period for per-pupil spending in English schools since at least the early 1980s. The government has put in place transitional protections to help smooth the transition process up to 2019–20. However, there is significant uncertainty about what will happen after 2019–20. This is a big omission considering only 60% of schools will be on the main formula in 2019–20. The formula could imply around 1,000 schools would face a further 7% cut to their budgets in the next parliament.”
Notes to Editors: