Putting the fun into school funding: part 2

Posted by Simon Goulden on 16 Mar 2016

The case of the Assistant Rabbi’s egg

As I wrote before, the DfE has launched a new consultation, just Stage 1 mind you, into changes they are seeking to the National Funding Formula for schools in England by 2019-20.In a nutshell, the DfE wants to support the idea of extending opportunity for all pupils through a system which is fair (whatever that means), efficient and gets the funding ‘straight to the schools’ as the DfE says and is transparent, simple and predictable so that schools can plan better for the future. Those of us versed in the ways of governments must be thinking ‘what’s the catch’ but in truth, this broad brush consultation contains little which will raise too many eyebrows: perhaps that is why it has been drafted this way. This was, of course, before the announcement of the end of VA schools by forcing ALL schools to become academies by 2022. Although this will take us into the next parliament, I suppose the Conservatives are banking on another five years. We shall see.

But let us recap: currently the government funds schools through the Dedicated Schools Grant (the DSG), which is split into three blocks: the schools block, the high needs block and the early years block. Although these blocks are national, local authorities (LAs) are free to move funds between them to suit local needs and, perhaps, political priorities. Local Authorities also currently receive funding through the Education Services Grant (the ESG) for education services provided to all pupils or to maintained schools (our VA schools) only. The ESG to academies and free schools is allocated to provide equivalent services, the DfE notes. There are additional funding grants, too, covering 16-19 funding, pre and post opening grants for new academy converters, sponsored academies as well as a few other specific grants for schools. On its own admission, the DfE says that, up to now, a degree of local discretion has been valuable and rational, but the degree of variation is, it claims, well beyond anything that could be justified on the basis of differing local need. And of course, this government’s plans for making / encouraging/ forcing all schools to become academies means that it wants a more consistent – and centralised – approach. So to the three funding blocks the DfE wants add a fourth! To some who look to a Conservative administration to be one dedicated to ‘small government’, this must come as a bit of a surprise..

And so to the consultation itself. To those keen on a TLA (three letter acronym) count, I managed fourteen, all of which will be familiar to those ‘in the business’ but some such as IDACI, may be unusual. IDACI is not the name of a new sushi restaurant, but the Income Deprivation Affecting Children Index. You probably knew that all the time! The consultation talks about ‘soft funding’ by which it means the transition years and ‘hard funding’ by which they mean the new situation with all funding coming direct from the DfE. No, I don’t know why soft and hard, either.

Question 1 simply asks whether you agree with the DfE’s proposals for the funding system? An innocent enough question, but one which perhaps forestalls all subsequent questions (and there are 25 in total). After all, if you agree from the outset, why ask any others, you might ask?

Question 2 then asks you to agree with the notion of moving to a national funding formula form 2019-20, removing LA formula funding.

Question 3 asks whether the basic amount should vary with school phases (primary, KS3& KS4) and this is hard to gainsay, as we all know that costs greatly differ.

Questions 4-14 ask about which factors should still be included when the DfE sets the grant level. There are deprivation, low prior attainment, EAL, lump sum, sparsity, business rates, split sites, PFI, exceptional premises circumstances, historic spend and growth factors to be taken into account. These are largely technical and, to my mind, should still be included.  Question 13 asks about the transitional years and how monies to LAs should still be allocated. I think the answer to this question should be ‘yes’, but I leave it to you to decide.

Question 16 could have significant consequences for our schools and needs careful analysis. The consultation explains that the DfE wants add a final building block as an Area Cost Adjustment (ACA) to take account of cost variations based on geographical location.  This ACA should act as a multiplier on the National Funding Formula (the NFF: a TLA I’ve just made up!). There is currently a hybrid area cost adjustment (HACA?) instead of the old General Labour Market (GLM) measure. The HACA consists of two elements: teachers’ pay costs and non-teaching staff costs. There are arguments favouring both ways of calculating the adjustment and the consultation seems to indicate that they can be easily found and understood but, search as I might, I could not find an adequate (for me, at least) answer and the footnote reference to the DCLG (Department for Communities and Local Government) ‘Technical Guide to the ACA, 2013’ left me more confused than at the start. For example, it refers to the Labour Cost Adjustment (LCA) but the LCA draws its data on wage rates from the full Annual Survey of Hours and Earnings (ASHE). The ASHE has been developed by the Office for National Statistics (ONS) to replace the New Earnings Survey (NES). New acronyms to learn: oh goody! It was when I got to the ‘Anti-logged relative Wage Coefficients for ACA Areas’ that the headache started and I had to lie down in a darkened room for a while. Sufficient to say that it look to me that Outer London does less well than Hertfordshire and Buckinghamshire in terms of current uplift multiplier, which certainly does not seem right to me. Perhaps the hybrid scheme suggested might just benefit our schools, but it is really ‘above my pay grade’.

Question 17 refers to Looked After Children (LACs) and Pupil Premium Plus (PP+). It appears that the DfE will increase PP+ from 2017-18 and if we all like that approach it will tell us more in the second stage consultation. The question asks whether we like that approach.

Questions 18 and 19 refer to mobility and post 16 factors. You may think these minor technical matters with very modest funding attached, but for any of our schools where 10% of the pupils enter outside the normal times of the year and our secondary schools, they may make all the difference.

Questions 20 and 21 look at the 'soft’ funding and candidly note that some LAs will receive less funding in 2017-18 than they had in 2016-17 for their schools, meaning that setting a local formula that complies with current regulations and guidance will be more difficult. The questions ask whether LAs should be required to pass on all of their allocation to schools from 2017-18 and whether they should be given some flexibility in setting a Minimum Funding Guarantee (MFG).

And so to the finale. The consultation admits that some schools have recently been subject to reductions in funding of up to 1.5% per pupil per year and it even mentions the increased pension and NI burdens schools are now having to carry. It says (para 3.28) that ‘in order to protect the national schools budget,the government has taken difficult decisions to make savings on the education services grant and post – 16 education’. As ever, the devil will be in the detail. And, of course, with the ending of VA schooling by 2022 only announced on the 15th of March, you can only wonder who is actually pulling the strings at the DfE?

Questions 22-25 refer to funding LAs ongoing responsibilities and historic commitments. To them I would answer ‘yes, yes, don’t know and yes’ in that order.

And what, you may well ask is The case of the Assistant Rabbi’s egg? Well there is a well known Punch cartoon of 1895.  It pictures a timid-looking curate eating breakfast in hisbishop's house. The bishop says: "I'm afraid you've got a bad egg, Mr Jones." The curate replies, desperate not to offend his eminent host and ultimate employer: "Oh no, my Lord, I assure you that parts of it are excellent!"  Assuming that the community has no curates, but a number of assistant rabbis, the analogy seems to work perfectly well, even at over 120 years distance.

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