Source · Select Committees · Public Accounts Committee
Recommendation 5
5
In 2018–19, the Department introduced a new national funding formula with the aim of allocating...
Conclusion
In 2018–19, the Department introduced a new national funding formula with the aim of allocating funding for schools more transparently, consistently, and fairly.6 We reported in October 2021 that the national funding formula had led to a re-balancing of funding away from more deprived schools towards less deprived schools. Between 2017–18 and 2020–21, average per-pupil funding fell in real terms by 1.2% for the most deprived fifth of schools, but increased by 2.9% for the least deprived fifth.7 We challenged the Department again about the impact of the national funding formula and minimum funding levels on 1 C&AG’s Report, Financial sustainability of schools in England, Session 2021–22, HC 802, 25 November 2021 2 C&AG’s Report, paras 1.2–1.3 3 C&AG’s Report, paras 3, 12 4 NAO report on School funding in England, Figure 3. 5 C&AG’s Report, para 1.6 6 C&AG’s Report, School funding in England, Session 2021–22, HC 300, 2 July 2021, para 2.6 7 HC Committee of Public Accounts, School funding, Twenty-First Report of Session 2021–22, October 2021 8 Financial sustainability of schools in England deprived schools and children.8 The Department told us that the critical thing was that funding followed deprivation and need, particularly at pupil level. It explained that the shift in the balance of funding between schools reflected changes in relative need over time, but the most deprived areas still received more funding than the least deprived.9 The Department also said that it saw areas with similar levels of deprivation but with very different outcomes for their children, based on similar levels of resource. It explained that it wanted to work with schools on how they used their funding to help them get the best possible outcomes.10
Government Response
Not Addressed
HM Government
Not Addressed
1: PAC conclusion: The Department does not understand well enough why there is so much geographical variation in maintained schools’ financial health and why maintained secondary schools are under particular financial pressure. 35 1: PAC recommendation: The Department should thoroughly investigate the geographical variation in in the financial health of maintained schools, determine the underlying causes and decide whether some schools or local areas need extra support from 2022–23 to be sustainable. 1.1 The government agrees with the Committee’s recommendation. Target implementation date: March 2023 1.2 The national funding formula (NFF), introduced in 2018-19, distributes funding to schools fairly, regardless of geographical location. The formula does not discriminate between maintained schools and academies. The formula is updated annually based on schools’ and pupils’ characteristics. 1.3 It is local authorities’ responsibility to supervise maintained schools, and the Department for Education (the department) expects local authorities to closely monitor maintained schools in financial difficulty, taking action as necessary under their local schemes. 1.3 The department annually publishes information on the reserves of maintained schools, based on schools’ Consistent Financial Reporting (CFR) returns, including analysis of reserves in different phases, and a local authority level breakdown. The latest statistics show a smaller proportion of maintained schools in deficit in 2020-21 compared to 2019-20. The percentage of secondary schools in deficit reduced from 27% to 19% in 2020-21. 1.4 The department monitors variations in phases and will collect perspectives on financial health and explanatory factors from local authority-maintained schools in different geographical areas. The department’s School Resource Management programme is available to schools, allowing them to access available tools and support. The expertise of School Resource Management Advisors (SRMAs) can be deployed to help local authorities and their schools identify opportunities to make better use of their funding. The department will continue to engage and support those local authorities, with schools in deficits, to request Action Plans and offer SRMA expertise to understand and provide advice on addressing these deficits.