Schools funding shake-up 'to create fairness across England'

A major shake-up of schools funding in England aimed at removing historic differences in the amount of money on offer in different parts of the country has been unveiled.

Education Secretary Nicky Morgan said the reforms would mean the "biggest step towards fairer funding in over a decade", ending a situation where a school in one area can receive over 50% more than one with a similar mix of pupils in a different part of the country.

Under plans to sweep away the existing system, she insisted that every school will get funding that "genuinely matches their need".

Chancellor George Osborne confirmed the Government would introduce a new formula in his Autumn Statement in November last year, leading to concerns from Labour and unions that the plan could direct money away from cities to "leafy shires".

The Department for Education (DfE) insisted the new formula would end the funding "postcode lottery" and money would go straight to schools rather than being directed to local authorities.

The current system is "outdated, inefficient and unfair", the DfE said, and could mean a school in one part of the country could receive 50% more than an identical school with the same children in another place "simply because of an accident of history".

The Education Secretary said: "We want every school in England to get the funding it deserves, so that all children - whatever their background and wherever they live in the country - get a great education.

"The introduction of a national funding formula from 2017-18 will see the biggest step towards fairer funding in over a decade - ensuring that pupils get funding that genuinely matches their need. It will also ensure that pupils from disadvantaged backgrounds continue to receive significant additional funding to overcome entrenched barriers to their success.

"This is a key part of our core mission to extend opportunity to all children and provide educational excellence in all parts of the country: rural and urban, shire and metropolitan, north and south."

The Government's proposals would consider four factors in determining core schools funding: basic per pupil funding; funding for additional needs, taking into account factors such as deprivation, low prior attainment by pupils and whether they had English as an additional language; school costs, including those relating to schools serving rural communities; area costs, ensuring extra funding in high-cost places.

Once the principles behind the new formula have been agreed, a second consultation will seek views on the weighting of the various factors.

This second stage consultation will set out full illustrations of the impacts of the funding formulae across schools and local authorities, giving an indication of which areas will lose out.

The variation in funding under the current system means that although Rotherham and Plymouth have similar proportions of pupils from poor backgrounds eligible for free school meals, Rotherham receives nearly £500 more per pupil.

Demographic changes have also left the funding settlements out of date - in the last 10 years the proportion of pupils in Lincolnshire eligible for free school meals has more than doubled while in Southwark, south London, the rate has nearly halved.

Decisions made by local authorities can also alter the amount available to headteachers. A secondary pupil with low prior attainment would attract £2,248 of additional funding in Birmingham, compared with £36 in Darlington while in other local authorities, these pupils would not attract any extra cash.

From 2016-17 an "invest to save' fund will be made available to schools to help them cope with the change to a national funding formula.

Shadow education secretary Lucy Powell said: "While the principle of so-called fair funding is the right starting point, the devil will be in the detail. Even before any changes to the funding formula, all schools will see their budgets cut by at least 8% in real terms over the next five years, having a huge impact on teaching and frontline resources.

"The Tory Government has dodged the difficult questions about school funding ahead of this year's elections because they know that many parts of the country, including London where they face a key election, will lose even more from schools budgets.

"Now that they've fired the starting gun on a funding review, they should get on with the detail and not leave schools in the dark."