The National Funding Formula beckons and schools/ academies will feel the winter chill of financial reductions

1 Jan

Justine Greening, the Secretary of State for Education, unveiled to parliament on 14 December 2016 details of the National Funding Formula (NFF) for schools.   Consultations will close on 22 March 2017.

The introduction of the NFF will be a two-stage process.

(a)   From April 2018, the government will redistribute the overall school/academy funding to local authorities and directly to academies and free schools in accordance with the new formula.  However, local authorities will remain in control of allocating the school funding in accordance with their own, unique formulas.

(b)   From April 2019, there will be a National Funding Formula (which the DfE has styled a hard NFF) and local arrangements for the sharing will be eliminated.

Altogether, 10,740 schools/academies (54%) may see an increase but 9,128 (46%) could suffer severe losses.  Small rural schools/academies stand to gain and those in cities with increasing wealth will be hit.   But even schools which stand to benefit will see increases outweighed by extra expenditure over the rest of this parliament, i.e. to 2020.

Ms Greening said that schools/academies could lose up to 3% of their budgets over the next two years.  She told MPs: “The proposals for funding reform will mean that all schools and local areas will now receive a consistent and a fair share of the schools’ budget so that they can have the best possible chance to give every child the opportunity to reach their (sic) full potential.

“Once implemented the formula will mean that wherever a family lives in England, their children will attract a similar level of funding, and one that properly reflects their needs.”

However, the National Audit Office (NAO) accused the government of not increasing schools’ funding in line with inflation.   The average per pupil funding will rise from £5,447 in 2015/16 to £5,519 in 2019-20. This represents a 1.32% increase over four years.

Meanwhile, schools are having to make £3 billion savings to deal with the increased salaries, the introduction of a national living wage, higher national insurance contributions and increased contributions to the teachers’ pension scheme.   Every school/academy with an annual turnover of £3 million or more will also have to pay the apprenticeship levy.  According to the NAO, the savings schools and academies will be required to make equate to an 8% real terms cut between 2014-15 and 2019-20.

Additionally, the Department for Education (DfE) is phasing out the Education Services Grant – a slash of £615 million made over to local authorities and academies to provide for services to schools and academies.

The NAO’s report criticised the DfE for not being able to reassure the world and its dog that the savings would be achievable and its failure to communicate to schools/academies the pace of savings needed.

The NFF will compensate those schools with high mobility in-year as well as with pupils economically disadvantaged but not necessarily those who marginally fail to qualify for free school meals (FSM) – i.e. those pupils from JAM (just about managing) families.

The schools/academies likely to lose the most will be in Inner London and other urban areas where deprivation has fallen recently.   There are 49 local authorities set to have budgets lopped under the NFF and 101 areas will be better off.

There will be a minimum funding guarantee, which means that no school will lose more than 1.5% of its budget each year over the two financial years from April 2018.

Altogether, the budgets of 3,379 schools/academies will increase by more than 5 per cent. The maximum in 2018-19 will be 3 per cent, and a further 2.5 per cent in 2019-20.

The schools/academies set to gain the most include the following.

  • Those schools/academies that cater for high numbers of pupils living in disadvantaged areas that are not necessarily eligible for free school meals will gain. Outside London, the average gain for these schools is 1.4%.
  • Schools/academies with the highest proportion of pupils with low prior attainment but which are not in areas of high deprivation will gain 2.8% on average.
  • Small, rural schools/academies will gain 1.3% on average.
  • Primaries schools/academies in sparse communities that are both small and remote, will gain 5.3% on average.


The NFF has been a long time in gestation.   Councillors in poorly funded authorities have been screaming for years about the inequities of the distribution (by government) of finances to schools and academies.   The per (secondary) pupil funding for some schools in Tower Hamlets is currently double that of pupils in Wokingham, for instance.  The government knew that this could not be sustained.

However, it could not have chosen a worse time to bring in the changes, given that the value of the pound has plummeted, we are preoccupied with negotiating Brexit and the economy, while doing better than other advanced countries, is still trying to recover from the disasters of 2008.    Would it not have been more appropriate to have brought in a national funding formula during the days of plenty when the former Prime Minister, Tony Blair, was so full of education, education and education? Instituting the NFF will be, according to the National Governors’ Association, a fairer way of distributing what is not enough.

Notwithstanding, is there ever a good time to inflict pain?  We have had more than seven years of plenty.   The years of famine for many schools/academies are now following. We have now to develop the Blitz spirit of our ancestors, grit our teeth, tighten those belts, aim to generate income in entrepreneurial ways and do everything possible to minimise the negative effects on our children.

Every time I feel like criticising the government I think of the ill-conceived legacy that we will be leaving our children and our children’s children – i.e. the current national debt of £1.64 trillion, which will most certainly be rising to £2 trillion by 2020.

We cannot spend money that we just do not have.  We dealt with scarcity in the past.  Our ancestors weathered the Luftwaffe Blitz and lived to tell the tale.  Developing a frugality mind-set calls for much less resilience.  And, just in case we begin to feel sorry for ourselves and our children’s education, we should spare a thought about the kids of Syria.

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