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School Funding: Update and Analysis

Date published: Date modified: 2022-10-25

Two key changes to school funding were announced by Justine Greening, Secretary of State for Education, on 17 July 2017. They were:

  • Introduction of new National Funding Formula (NFF) for schools and pupils with high needs.
  • Additional £1.3bn to support core funding for schools in 2018 – 2019.

Is this good news for schools and academies? Where has the funding come from? And what does the announcement mean in real terms for your school, academy, or multi-academy trust?

As ever, we’re here to help throw light on the latest funding updates affecting your school or academy. 

Why has Greening announced additional funding now?

After listening to the concerns raised during the general election – and hearing stories about headteachers asking parents for donations and extra cash – Greening asked parliament for more money so that she could help struggling schools to reduce deficit budgets.

After this attempt failed, she managed to produce the extra funding from her own department’s efficiencies and savings.

Where has the new funding come from?

Greening’s announcement, made on 17 July in her speech to parliament, was met with confusion along with the accusation that she was simply taking money out of smaller education projects to please the masses, following months of complaining.

After some discussion, the following points were clarified:

  • The bulk of the cash will be taken from £600m of unspecified new cuts to the Department for Education’s budget.
  • £200m will come from the free schools budget, although Greening claims that the government isn’t cutting the free schools programme but it is “just financing it in a different way”. As a result, 30 of 140 planned new free schools will instead be local authority schools.
  • £420m will come from the capital budget for building and repairs – this will mostly affect funding for “healthy” pupils’ sports facilities and wellbeing.

What do the changes mean for your school?

In Greening’s view, this “fairer school funding … will deliver the biggest improvement to the school funding system for well over a decade.” Apparently, the new formula will provide an increase in the basic amount that every pupil will receive, while pupils with additional needs have their funding protected.

A minimum of £4,800 has been promised for every secondary school pupil. What’s more, every local authority will be able to give schools a cash increase through the new formula that will – the government claims – put an end to the unfair postcode lottery system.

What do others make of the changes?

You probably won’t be surprised to learn that not everyone was thrilled.

Worth Less? – the prominent schools funding campaign group made up of head teachers across 17 counties – expressed their dissatisfaction with the delays on the new funding formula.

They’ve asked to examine the precise details of these changes carefully, so that schools and parents can understand exactly what these announcements mean for each individual pupil.

Former shadow education secretary Lucy Powell has also expressed concerns. Her view is that we shouldn’t be worrying about whether the £1.3bn is new or old money. Rather, the main point is that the sum is still £1.7bn short of the figure that the National Audit Office decided was required to maintain funding at its current levels, given the rising pupil numbers and general costs.

What’s SAAF’s take on the latest updates?

On the surface, the announcement would appear to be a good news story. However, the concern still remains that the “additional” funding is not new money. It is recycled monies and the pinch will, therefore, be felt somewhere, be it immediate or further down the line. 

The funding quantum allocated for nursery pupils to KS4 has not seen an increase for a number of years (excluding ringfenced funding such as pupil premium). However, school costs continue to rise, be it due to salary increases or non-staffing inflationary increases.

The 1% pay award school staff have become accustomed to since 2010 means salaries, according to the teachers’ unions, have fallen 15% behind inflation. The lack of increase in funding also means a continued financial pressure within our schools, so the recycled funding may only serve as a sticking plaster in the short term.

In my opinion, the longer-term impact of the funding shortage can only be repaired if the funding quantum is increased annually in line with inflation.      

Many secondary schools already receive £4,800 per pupil, raising the question whether these schools will see a decrease in funding to enable the increase in other secondaries currently below this new threshold.

Also, what does this really mean for secondaries above the threshold, as they continue to feel the pinch of increased costs and stagnant (possibly falling) funding?  

How can you ensure that your funding is in good hands?

If you are beginning to panic about the state of your funding, then we’re here to give you complete peace of mind.

SAAF Education consultants work to ensure that your school or academy uses its budget and expenditure as efficiently as possible, giving you detailed information on how to construct a better plan for the future. Identifying areas for improvement in everything from your software systems to your financial strategy, we’ll ensure you’re prepared for whatever lies ahead.

Click on the button below to see how SAAF’s finance support can benefit you.

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By Su Johal
SAAF Education 340 110

19 July 2017



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