1
School funding
reform
School Business Managers
North East July 2013
Mukesh Parekh
Academies & Maintained Schools
The case for reform
 Previous system complex, opaque, unfair and often perverse
 School Funding Reform (2012): first step towards a fairer system
and the national funding formula
– Introduction of 12 factors for bases of calculating funding
 High needs: Special Educational Needs / Learners with Learning
Difficulties and/or Disabilities (to age 25) funding reform
 Review of implementation in spring 2013
 2014/15 factors announced in June 2013
How it felt for schools and
academies
 Overly complicated
 Too bureaucratic
 Opaque
 Poorly communicated
 Prone to error and
interpretation
Design of the LA funding model
 Twelve standard factors are available for use in the local
funding model
 Two of the factors are compulsory
– basic entitlement (age weighted pupil unit or AWPU)
– deprivation
 The other 10 factors are optional
 Local authorities can suggest exceptional factors
 The final proforma is agreed in the Schools Forum
Existing 2013/14 allowable factors












Basic entitlement (Compulsory)
Deprivation
(Compulsory)
Prior attainment
Looked after children
English as an additional language
Pupil mobility
Lump sum
(Max of £200K)
Split sites
Rates
Private Finance Initiative (PFI)
London fringe
Post-16
Exceptional factors
 LA’s can include additional exceptional factors. Must have
dedicated criteria and must be pre-agreed by the EFA
 Exceptional costs
– Maximum of 5% of schools in a local area
– Circumstances must have a financial impact greater than
1% of the school’s budget
Minimum Funding Guarantee
 MFG set at -1.5% per pupil for 2013/14 & 2014/15
 The following aspects excluded from protection:
–
–
–
–
–
Post-16
Early years
High needs
Lump sum
Rates
 Local authorities could apply for additional exclusions
– For example bulge classes where the money should not
be built into your baseline as it will disadvantage you in
subsequent years
Schools Forum reform
 New Schools Forum regulations
– Only the DCS, Chief Finance Officer and Lead member (or
their deputy) can be LA members of the Schools Forum
– The need for a minimum of 16 members has been removed
– LA staff cannot vote on their own proposals, only the other
members of the Forum
– Academies are entitled to proportional representation on the
Forum
– EFA has observer status at meetings
Schools Funding Reform
Summary (Stage 1)
 Introduction of 12 Factors funding methodology
 HN funding Reformed to Planned Places plus top up
funding
 New Schools Forum regulations
 Post 16 Funding Reforms
Review of 2013-14 arrangements
(Spring 2013)
 Continuing a clear commitment to reform funding systems
 Looked at getting views on are we moving towards national
consistency
 Getting views, on areas of concern and possible changes
 Looking specifically at three factors, prior attainment, pupil
mobility and the lump sum
 Deadline for views was 26th March
 2014/15 factors announced in June 2013 and EFA has started to
work with local authorities on implementation
Beginning the second year of school
funding reform – the context
 Changes introduced in 2013-14 were the first step towards a
national funding formula for schools
 Radical change – needed to ensure no unexpected outcomes
and Ministers committed to reviewing the impact
 Result of review, together with changes for 2014-15 published
4 June 2014
 Compared to stage 1, changes for 2014-15 are relatively modest
Building on 2013-14 reforms…
 The simplified local formula remains
 Limited set of factors to be used for school formula distribution
 LA proforma submissions in October and January
 The high needs system remains broadly as in 2013-14
 The Minimum Funding Guarantee continues at -1.5% per pupil
(Exclusions apply)
The changes for 14-15 are therefore a development
of 13-14 and continue the journey towards a
national funding formula for pre-16
The principal changes for 2014-15 (1)
 New factor – an allowance for sparsity, aimed at supporting
necessary small schools, mainly in rural areas
 Maximum allowable for a sparse school is £100,000 - flat rate or
tapered
 Eligibility based on size of school and distance to second
nearest school:
– Primary schools – max: 150 pupils, min: 2 miles distance
– Secondary schools – max: 600 pupils, min: 3 miles distance
Next nearest school
5 miles
4 miles
3 miles
Nearest school
2 miles
1 mile
1 mile
1 mile
2 miles
Key
Next nearest school
1st nearest school
Distance to 2nd nearest school
The principal changes for 2014-15 (2)
 Changes to the lump sum:
– LAs can now choose to have different lump sums for primary
and secondary schools – with middle schools getting a weighted
average
– The lump sum is now capped at £175,000 per school
– Where two schools amalgamate the new school will receive
85% of the total of the lump sums of the predecessors for the
next full year
The principal changes for 2014-15 (3)
 Other factors with changes:
– The looked after children factor must now apply to any child in
care for one day or more
– The prior attainment factor has changes in its measurement at
Early Years Foundation Stage and Key Stage 2. For EYFSP it
will apply to pupils not achieving a good level of development;
for KS2 it is will apply to pupils not achieving level 4 in English
or Maths
– The mobility factor now applies only when the number of
“mobile” pupils exceeds 10%
The principal changes for 2014-15 (4)
 Other restrictions:
 Basic entitlement for primary pupils must be at least £2000; and
for secondary pupils at least £3000
 At least 80% of delegated funding must be distributed via pupilled factors
 For 2014-15 we are not putting any constraints on the
primary/secondary ratio
The principal changes for 2014-15 (5)
 LAs may create a “falling rolls” fund to support good and
outstanding schools and academies with temporary falling rolls
in advance of a population bulge
 Schools Forum must approve the criteria and be consulted on
allocations (and the EFA will check that criteria are compliant)
 Schools Forum – membership must include a representative
from an institution providing education to 16-19 year olds, other
than schools or academies (replacing the 14-19 partnership)
Exceptions
 Local authorities can apply for exceptions to be made for:
– Exceptional premises factors (13-14 approval can be
automatically carried forward if criteria still met)
– Exclusions from the MFG
– Changes in pupil numbers as a result of reorganisation or
changes in years of admission
– Sparsity calculation if the “crow flies” measure produces
perverse results
– Variation to the lump sum for amalgamated schools
 Ensure that your local authority and Schools Forum are aware
of any unusual circumstances for your school
The principal changes for 2014-15 – high
needs
 In 13-14 we recommended that authorities delegated sufficient
funding to allow schools to meet up to £6000 of special needs
costs. This is now mandatory
 Local authorities should develop criteria to support schools
with disproportionate numbers of high needs pupils
 The operational guidance sets out how high needs places will
be adjusted for 2014-15 (further guidance due in July)
 For special schools and academies with post-16 pupils we will
be consulting on setting the place value at £10,000 in place of
the normal post-16 values
Factors for 2014/15 allowable factors













Basic entitlement (Compulsory)
Deprivation
(Compulsory)
Prior attainment
Looked after children
English as an additional language
Pupil mobility
Lump sum
Sparsity
Split sites
Rates
Private Finance Initiative (PFI)
London fringe
Post-16
Minimum set
Change
Change
Change
Change
New
Equal treatment
 When constructing the formula, authorities must take into
account the characteristics of all maintained schools,
academies and free schools in their area.
 When incurring central expenditure (other than de-delegated
budgets), maintained schools and recoupment academies must
be treated on an equivalent basis.
 All high needs providers must be treated on an equivalent
basis when making placements.
Your Role as Business Manager
 Develop your understanding of the LA funding formula and its
impact for your school or academy.
 Accurate Census returns are key to determining the bulk of
your funding – ensure an accurate and timely return.
 Know who represents you on the Schools Forum and liaise
with them about the LA formula for 2014/15.
 Make sure the LA is aware of your circumstances which may
impact on MFG and or exceptional funding.
Sources of information
 The announcement on 2014-15 funding arrangements is at –
http://www.education.gov.uk/schools/adminandfinance/financialmanagement/schoolsrevenu
efunding/a00221523/review-of-2013–14-school-funding-arrangements
 For the latest guidance on Schools Forums
please see –
http://www.education.gov.uk/schools/adminandfinance/financialmanagement/school
srevenuefunding/schoolsforums/a0070290/guidance-for-schools-forums-on-theirrole
 For analysis of LA Proforma return 2013/14
http://media.education.gov.uk/assets/files/pdf/a/january%20proforma%20analysis%2
0vfinal.pdf
1
School funding
reform
School Business Manager
North East
July 2013