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National Funding Formula – A Clearer Picture

Date published: Date modified: 2022-10-25
  • National Funding Formula (NFF) details revealed, yet should be seen against broader picture of budget cuts and rising costs
  • Regardless of whether you’re set to be an NFF winner or loser, challenging financial times lie ahead
  • Thorough planning will help your school or academy thrive through uncertainty and enable you to maintain the highest educational standards

We finally have some information on the national funding formulae. Justine Greening has announced the second consultation stage, and you have until 22 March 2017 to comment.

Guided by clear, fair principles

The principles of the NFF are clear and understandable. It is without doubt unfair that schools in certain local authorities receive 50% more funding than identical schools in other parts of the country.

The NFF will iron out these discrepancies, but inevitably there will still be losers as well as winners.

  • The total funding pot will remain unaltered, so it’s really about allocation of funds
  • Overall, most schools are unprotected from the real-term cuts to funding
  • The National Audit Office has warned that schools in England are facing an 8% cut in funding per pupil by 2019-20 as a result of £3bn worth of cuts

NFF winners and losers

More than 9,000 schools in England will lose funding, many in London and other urban centres such as Birmingham and Manchester.

Schools set to lose funding are protected by the minimum funding guarantee of minus 1.5% per pupil year on year, with no school facing an overall reduction of more than 3% per pupil.

However, even schools set to receive more funding are facing challenging times:

  • Any gains from the new formula will be swallowed up, in many cases by general funding cuts and rising costs
  • Schools in many local authorities are also seeing an increase to the pension rate they pay into the Local Government Pension Scheme for non-teaching staff

As for those set to lose out, the reduction may well coincide with rising costs. If you’re facing this worst-case scenario, you need to react quickly.

  • Prepare detailed forecasts taking account of the changes.
  • This will enable trustees/governors to make informed decisions over difficult issues such as the need for restructuring.

Whatever the outcome, the next few years will no doubt prove challenging.

If you’re looking for advice on effective financial management during difficult times, contact us to discuss ways we can support you.  

By Andi Brown
SAAF Education 340 110

22 February 2017

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