Recommendation 4

The Ministry of Housing, Communities and Local Government has now set out the detail of its new funding formula for home to school transport but not yet set out its plans for monitoring whether it proves to be successful in aligning funding with local need. In 2023–24, home to school transport (pre-16) accounted for approximately 3.7% of total local government spending, but is one of the fastest growing areas of local authority spending. In response to the escalating pressure it has been placing on local authority budgets in the past decade, MHCLG has announced a new funding formula for home to school transport from April 2026 to better align funding allocated through the local government finance settlement with local need. MHCLG assures us that the formula reflects rural and urban differences, for example, by basing funding on journey time rather than miles travelled. It published details on the formula after the evidence session. Although it represents a much smaller proportion of the total, spending on ‘SEND transport’ post-16 is growing proportionately faster than for pre-16, but is not covered by the new formula. MHCLG has yet to set out how it intends to monitor the impact the new funding formula has on local authorities. recommendation MHCLG should write to the Committee to set out how it will assess whether the funding formula changes better align with local needs in practice.