School funding in England
The Pupil Premium
September 2014
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What is the pupil premium?
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The pupil premium is funding that specifically targets deprived pupils to tackle the
attainment gap between pupils from a low income background and those from a more
affluent background.
It was introduced in 2011 and supports disadvantaged pupils from reception to Year 11.
Schools are required to account for how they spend the pupil premium money to support
these pupils. The Government believes this is the best way to address the underlying
inequalities for deprived children and to ensure that extra funding reaches the pupils who
need it the most. Since its introduction the premium has been extended to include service
children and children that are looked after by the LA.
Although the Government has made much of the premium’s introduction, saying that it has
set aside extra money to help children from deprived backgrounds, additional funding to
tackle deprivation is not a new idea. Additional funding for pupils registered for Free School
Meals (FSM) was a feature of the previous Government’s school funding system too.
How does it work?
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The premium is allocated to schools for each of the pupils registered for FSM at any point in
the last six years (known as ‘Ever 6 FSM’). From the 2014-15 financial year the premium is
also allocated for children that have been ‘looked after’ by the LA for one day or more and
children who have been adopted from or left care under certain circumstances. Children
from service families receive the ‘service premium’ but at a lower rate.
The premium is allocated on a flat rate basis. For 2014-15 the amount per pupil registered
for FSM is £1,300 for primary aged pupils and £935 for secondary aged pupils. The rate for
children who are looked after is £1,900. The amount for service children is £300.
Funding for the premium is outside the Dedicated Schools Budget and is paid to schools via
the LA. The Education Funding Agency (EFA) pays the premium directly to academies.
It is not ring-fenced, meaning that schools and academies decide themselves how to spend
it. The Government wants head teachers to make the spending decisions but it also wants
them to spend the money appropriately and be accountable. The performance of
disadvantaged pupils (compared to other pupils) is included in performance tables and the
use of the premium is part of the Ofsted inspection framework.
How do schools spend the pupil premium?
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Schools can obtain advice on how to spend the premium from the LA or from other
educational organisations. The Sutton Trust, set up to improve social mobility through
education, has developed a toolkit to assist schools in spending the premium effectively.
The Pupil Premium Awards, set up jointly by the Times Educational Supplement, the DfE
and Deputy Prime Minister, awards cash prizes of up to £10,000 to schools in England that
are seen to be using the pupil premium most effectively.
A Pupil Premium Champion has been appointed by the Government – John Dunford
(previously Chair of Whole Education, the Chartered Institute of Educational Assessors and
General Secretary of ASCL).
The premium is used in a variety of ways. Examples include early intervention schemes
and setting up individual and small group tuition classes. Schools can extend the school
day to include breakfast support sessions to help pupils improve their research and IT skills.
National Union of Teachers: Pay, Conditions and Bargaining September 2014
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Some schools have purchased laptops and some have used it for music tuition classes.
Some schools are funding schemes that improve school attendance and to provide careers
guidance. Some schools use the premium to reduce class sizes and to recruit specialist
teachers or teaching assistants.
Whilst this appears to be progressive, the NUT is concerned that in reality schools have to
use the pupil premium to plug the gaps caused by funding shortages elsewhere and that
the money gets subsumed into the rest of their budget. Despite the relatively high increase
for primary schools from 2014-15; there is still a concern that many schools will have
already earmarked this money to provide services that were traditionally provided by LAs.
Many services, essential to schools, have been cut due to Government cuts to LA funding.
Others share our concerns. The Institute for Public Policy Research (IPPR) published a
report1 in 2013 highlighting problems with the pupil premium. The IPPR said that schools
face pressures to spend their resources on things not directly related to tackling educational
inequality and that the premium is subject to competing demands. The IPPR also echoed
our concerns that for the majority of schools, the pupil premium is not additional money.
The Sutton Trust submits questions to the annual teachers’ survey undertaken by the
National Foundation for Educational Research2 in order to establish what the top priorities
are for the use of the pupil premium and how spending decisions are made in schools.
The 2014 set of survey results found that 21 per cent of teachers responding did not know
the main priority for spending in their school. The survey also found that 3 per cent of
teachers said the main priority for the pupil premium in 2014 was to offset budget cuts
elsewhere. In secondary schools this figure was 5 per cent – where the pupil premium is a
lower per pupil amount. Nearly a quarter of teachers thought that the pupil premium in their
school was not targeted at pupils from a low income background suggesting that schools
are not using the premium for its intended purpose.
The pupil premium in the context of education cuts
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The Government claims that school funding has been protected and the pupil premium is
additional funding - the spending review for 2015-16 set out plans to protect school
budgets, including the pupil premium. Education was seen as one of the ‘winners’ of the
2015-16 spending round but the real picture is very different. Far from being protected,
schools have seen real-terms cuts. Without a major increase in overall funding, the
planned school funding reforms will create ‘winners and losers’ as budgets are recalculated.
Research3 by the Institute for Fiscal Studies (IFS) estimated that the real terms fall in public
spending on education between 2010-11 and 2014-15 would represent the largest cut in
education spending in any four year period since the 1950s. Education spending reached
6.4 per cent in 2009-10 but fell to 5.5 per cent in 2013-14 with more cuts planned in 201415.
According to the IFS only the most deprived schools will see real-terms growth in budgets,
despite the pupil premium, due to a freeze in cash terms on per pupil funding. The majority
of schools have already seen a reduction in real-terms spending – the IFS predicted in
2011 that as many as two thirds of primary schools and 80 per cent of secondary schools
would experience budget cuts.
The NUT will continue to make the argument that school budgets have already decreased
and that the uneven distribution of the pupil premium does not compensate for the realterms cuts that schools face, and the loss of key support services from LAs.
IPPR Report: Excellence and Equity, tackling educational disadvantage in England’s secondary
schools. Published June 2013
2 NFER Teacher Voice Omnibus survey: Spending Priorities for the Pupil Premium, published annually
3 IFS Report: Trends in education and schools spending, briefing note BN121, published October 2011
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National Union of Teachers: Pay, Conditions and Bargaining September 2014