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A new report by the public spending watchdog raises concerns about the fairness of the Department for Education’s system for allocating funds to schools
The Department for Education has ‘levelled-down’ school funding for the most deprived children in England while boosting funds to the least deprived schools, a new report by the public spending watchdog published today reveals.
According to the National Audit Office (NAO), there has been a relative redistribution of funds in this way since 2014-15. Its analysis shows how the most deprived schools have seen the “largest real-terms reductions” in per-pupil funding, while in 2020-21 the least deprived saw the biggest increases.
Between 2017-18 and 2020-21, the most deprived schools saw a 1.2% real terms reduction in per-pupil block funding – compared with a 2.9% increase for the least deprived fifth of schools.
The NAO states that 8.3% of the most deprived fifth of schools saw a real-terms decrease in per-pupil funding; the proportion was 83.6% in inner London and 55.4% in the rest of the country.
By contrast, Kent and Buckinghamshire – which have still retained grammar schools – all saw real-term increases. According to the report, the south-east, the south-west, including Bristol and Bath, and parts of the East Midlands, all gained money.
In ‘Red Wall’ seats – where the Conservatives have made gains nationally at the expense of Labour – Birmingham, Durham, Tyne and Wear and parts of the Tees Valley have all lost money.
The shifts come after the introduction of a national funding formula designed to be more transparent and provide greater consistency to how school funding is allocated across the country.
Gareth Davies, head of the NAO, recognised that the new formula meets “its objective of making the way it allocates school funding more transparent and consistent”, but he raised concerns that “it is less clear whether it has met its objective of allocating funding fairly”.
A key policy spoken of by Boris Johnson’s administration has been ‘levelling-up’ – the notion that the same opportunities should exist in all parts of the UK, given the disparities which exist within the country. Details of what this might involve have been less forthcoming.
The new NAO figures appear to go against the Government’s claims that it wants to level-up areas of deprivation and help poor white disadvantaged pupils as well people from ethnic minorities.
Patterns of Redistribution
The national funding formula includes ‘minimum per-pupil funding’, which means that every school will receive at least £3,750 per primary pupil and £5,000 per secondary pupil. This is due to increase to £4,000 for primary school pupils and to £5,150 in secondary schools.
Although more deprived areas and schools continue to receive more per-pupil funding than those that are less deprived, the difference in funding has narrowed.
Most London boroughs and cities with high levels of deprivation, such as Nottingham and Birmingham, “saw real terms decreases in per-pupil funding allocations between 2017-18 and 2020-21”.
In contrast, the Department for Education “allocated the largest increases to local authorities that had the lowest per-pupil funding”. This means that areas with low levels of deprivation, including in the south-east and south-west of England, received real terms increases of around 1%.
The report states that this represents a “shift in the balance of funding from more deprived to less deprived areas”.
As a result, the NAO states that the Department for Education should review “whether the shift in the balance of funding from more deprived areas to less deprived areas, and from more deprived schools to less deprived schools, means it is adequately meeting its objective of matching resources to need”.
The Wider Funding Pattern
The NAO report also casts doubt on the Government’s claims to have boosted the education budget since 2014. Although school funding increased by 7.1% in real terms between 2014-15 and 2020-21, the growth in pupil numbers means that the real-term funding per pupil was only 0.4%.
At the same time, increasing costs for everything from teaching staff to supporting students with health and care plans, meant the cost pressures on mainstream schools exceeded funding increases by £2.2 billion.
The NAO recognised that funding increases in 2020-21 were “projected to exceed cost pressures”, however, it expressed concern that the Department for Education “did not take account of the potential impact of COVID-19 costs and funding” in its assessment.
An additional £3.3 billion between 20220-21 and 2024-25 has been allocated to help schools cover costs relating to the Coronavirus pandemic, but the NAO notes that we do “not know the extent to which this covers cost pressures”.
The catch-up fund has been widely criticised for not going far enough to support children and the impact of the crisis on their education. It includes a £1.4 billion Coronavirus recovery package which works out at £50 extra funding per pupil per year, or £310 per pupil over three years. The Education Policy Institute has recommended that a much larger sum – £13.5 billion – would be required to meet children’s needs.
School budgets have also faced a cut to pupil premium funding worth an estimated £125 million, although these figures have been disputed by the Schools Minister Nick Gibb. The TES revealed the ‘stealth cut’ would leave a £118 million black hole in schools budgets.
The Department for Education said: “The National Funding Formula is levelling-up school funding and delivering resources where they are needed most. It ensures that the areas with high proportions of students from disadvantaged backgrounds are receiving the highest levels of funding, providing £6.4 billion in funding for pupils with additional needs in 2021-22.
“We are providing the biggest uplift to school funding in a decade – £14 billion in total over the three years to 2022-23 – investing in early years education and targeting our ambitious recovery funding, worth £3 billion to date, to support disadvantaged pupils aged two to 19 with their attainment.”