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Justine Greening gives education a financial uplift

18 Aug

I        Introduction

On 17 July 2017, the Education Secretary, Justine Greening, pledged an extra £1.3 billion to schools and academies over the next two financial years in an announcement in parliament.  The aim is to provide a per-pupil increase of at least 0.5% for every school/academy in 2018/19 and 2019/20.

While this is welcome, the reality is that instead of a significant cut in the budget, it will be a real-term freeze from now to 31 March 2020.  Over a four-year period up to that point, schools/academies will face a 4.6% cut in their finances, according to the Institute of Fiscal Studies (IFS). Education spending in the UK is expected to shrink from 4.4% of the gross domestic product to 3.8%. Today, the government spends 18% more on state pensions than on education.   Unsurprisingly, the teacher unions are calling for an extra £2 billion a year.

According to its manifesto in the run-up to the 8 June 2017 election, the Conservatives promised to raise the schools’ budget by £4 billion by 2022 to ensure that no school lost out under the National Funding Formula (NFF) which is to be introduced in the next financial year.   The IFS is of the view that Ms Greening’s promise is more generous than plans in her party’s manifesto and matches those of the Liberal Democrats.

While it will be up to Local Educational Authorities (LEAs) to act as post men and women when distributing the budgets to schools following the government allocation, Ms Greening is introducing a minimum level of per-pupil spending in 2019-20 set at £4,800 for every secondary school/academy.  (The minimum funding level per pupil for primary schools has yet to be announced at the time of writing.)   While youngsters in Berkshire will benefit from rise in the current per-pupil secondary funding of £3,991, those in Tower Hamlets where the per-pupil funding is £6,906 will have to endure the reduced pain of lesser financial cuts than expected.

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Trusts need to do more to curb the salaries of MAT CEOs

18 Apr

On 15 December 2016, the government launched the second-stage consultation on a National Funding Formula – the same day on which the National Audit Office warned that schools in England were facing a cut of 8% per pupil in real terms by 2019/20 which translates into £3 billion.

The proposed formula – for which consultations have now closed – will result in over 9,000 schools/academies losing out.  Money will disappear from London and other urban areas and moving to schools/academies – mainly in the shire counties – which currently receive less.  However, 11,000 (circa) schools/academies will gain, albeit they will see much lower increases than they had been made to believe because at the 9,000+ schools/academies the reductions will be phased in.

Education has enjoyed more than seven years of plenty with those in the profession drinking deeply from the financial well of generous governments.   Schools/academies that have been spendthrifts will suffer. Those who have been over-careful had been severely berated by their local authorities and the government for not giving their (current) pupils their just financial desserts.   Those that had been judicious and saved enough for a rainy day, will postpone suffering for a few years.

In the long-term, most schools/academies will have to provide more with less simply to survive, if not flourish.

It is, therefore, not with a little surprise and angst that I read the piece written by The Secret CEO (in The Times Educational Supplement of 31 March 2017).  The poor guy (his silhouette at the end of the article suggests that it is a “he”), who leads a multi-academy trust “somewhere in England” is “fed up” (the unfortunate devil) with reading “article after article about the ‘shocking’ salaries CEOs of MATs receive”.  He spends the entire article criticising critics for criticising the Chief Education Officers of Multi-Academy Trusts over the salaries they receive.

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The National Funding Formula – Assessing the Impact of Proposals

18 Apr

I        Introduction

School governors across the country have informed the National Governors’ Association (NGA) in no uncertain terms that funding is the biggest issue they are currently facing and the biggest issue they are likely to face in the near future.   It is true that there will be over 10,000 winners (54%) among schools, in terms of increased funding balanced off by 9,000+ (46%) losers.  However, by 2020, all schools (‘academies’ is used interchangeably for “schools” in the rest of this article) will find they are facing funding reductions by 2020.   The Education Policy Institute (EPI) – a think tank – said in one of its recent reports – The Implications of the National Funding Formula for Schools – that any cash increases awarded to schools via the National Funding Formula (NFF) will be cancelled by cost pressures.

According to the EPI, the redistribution of the basic per pupil sums, the use of wider area-based measures of deprivation and the increased amounts of funding for pupils with low prior attainment will mean that money will move from schools with the most disadvantaged pupils to those with pupils who come from “just about managing” (JAM) families.

Drilling down, the EPI made the following discoveries – based on the proposed NFF.

(1)        Primary schools with fewer than 30% of pupils on free school meals (FSM) are expected to gain around 1% and secondaries 0.9% on average.  The total sum will be £275 million.

(2)        Disadvantaged primary schools (i.e. those with over 30% of FSM pupils) are expected to gain around 0.4% while disadvantaged secondary schools set to lose around 0.3%.  This will amount to a net increase of around £5.6 million for the most disadvantaged primary and secondary schools.  The reality is that many will see reductions to their budgets.

(3)        The most disadvantaged primary and secondary schools in London are expected to lose around £16.1 million by 2019/20.

(4)        Funding distribution based on area deprivation – commonly known as Income Deprivation Affecting Children Index (IDACI) – means that pupils living in the least deprived areas will experience the highest relative gains.

(5)        The additional funding for low prior attainment will mean that the lowest-performing schools in the country are set to gain £78.5 million more than the top-performing schools.  This will have a painful effect especially in London, where the net loss to the highest performing primary schools will be around £16.6 million.

(6)        Small primary schools are due to experience an average increase of 3.5% – i.e. £22.7 million overall.  Small secondary schools, on the other hand, are unlikely to see any changes in their budgets.

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Proposal to add VAT to private school fees – a knee-jerk notion

18 Apr

Two politicians at the opposite ends of the spectrum of thinking – Michael Gove, former Education Secretary, and Jeremy Corbyn, leader of the Labour Party –  have come together on a plan to “soak the rich”.

Writing in The Times (Put VAT on school fees and soak the rich) on 24 February 2017 Gove pointed to “group of highly successful enterprises that is pretty much insulated from the present row about business rates” – private schools – because they are charities.  Because private schools are VAT-exempt, writes Gove, “the wealthiest in this country” are able “to buy a prestige service that secures their children a permanent, positional edge in society at an effective 20% discount”.

Turning to the knotty issue of the number of scholarships and bursaries these schools provide, he criticises (with a rhetorical question) the small number of students given educational opportunities from depressed areas of the country such as Knowsley, Sunderland, Merthyr Tydfil and Blyth Valley.

Two months later, Jeremy Corbyn, Labour’s leader, and the Shadow Education Secretary, Angela Rayner, came up with a not dissimilar proposal to charge parents VAT on the fees they pay to private schools, with a view to using the income to offer free meals to all children in primary schools.

Rayner told the BBC: “There are many private businesses that are paying VAT that are struggling.  I don’t see why the state school system should subsidise the private sector.”

She added: “The evidence from the National Centre for Social Research (NCSR) and the IFS (the Institute of Fiscal Studies) have both been quite clear that actually providing universal school meals at primary level will raise attainment.”

She was backed by Labour’s headquarters which claimed that research had shown that access to free school meals improved educational attainment by two months.

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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.”

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Implementation of the National Funding Formula postponed

28 Aug

I           Secretary of State’s Announcement

On the 21 July 2016, Ms Justine Greening, the new Secretary of State for Education, submitted a written statement to Parliament explaining that the National Funding Formula (NFF) which was due to take effect in the next financial year would be postponed to 2018/19.

Readers will recall that on 7 March 2016, the Department for Education (DfE) issued the first of its two stage consultation process on the national funding formula on the basis of which it sought views on

  1. the principles that underpin the formula and
  2. the pupil characteristics and school factors it should include in the formula.

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Developing children’s financial nous

28 Aug

The love of money is the root of much evil, but money, per se, makes the world go round.   Maslow would, in all probability, have placed money at the base of his triangle of human motivation – an essential for meeting physiological needs, which includes food, water, warmth and rest.  The best things in life may be free – such as the air we breathe, the songs of birds that we hear and the happiness emanating from the good life.  However, to appreciate these, human beings need food, water and creature comforts, which are not available unless humans have enough money.

It is sad, therefore, that in the United Kingdom, we have accumulated a national debt of £1.5 trillion – a debt that we will be expecting our children, grandchildren and future generations to pay back to the world.  And this debt can increase.

Schools/academies are suspect for not devoting sufficient time to teaching pupils/students how to manage money. Why else would so many, in a straw poll of 2,500 students between the ages of 11 and 16 carried out by The Times Educational Supplement (TES), list financial themes among the 100 things they would like to do before they finish their schooling such as “Learn what to do if you are in debt”, “Learn how to save money” and “Learn about taxes, mortgages and rent”.   In short, they are keen to learn how to survive (if not flourish) in the world of austerity that they will face. Continue reading