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Demystifying the Schools Funding Formula

Children and Young People’s Finance Service – September 2008

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General Background • Schools Budget funded by ringfenced Dedicated Schools

Grant (DSG)• Financing regulations determine the content of the Schools

Budget and LEA Budget• The Schools Budget has two constituent parts –

The Individual Schools Budget – delegated to schools by the Funding Formula

Centrally managed Schools Budget – centrally retained to meet costs such as SEN, Early Years

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What Is the Funding Formula?• A mechanism to ensure a equitable and transparent

allocation of a fixed resource to all schools• Defined by national regulation but able to take into

account local requirements if supported within the legislation

• Can differentiate between school categories but cannot differentiate between schools in those categories

• Maintains a balance between simplicity and the need to deliver funding for particular circumstances

• Result – it’s Complex!

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Development of the Funding Formula• Uses factors that are proxy indicators of cost• Remnants of past governmental delegation requirements –

e.g. % pupil lead funding, minimum AWPU increases• Local delegation strategies - e.g. SEN funding, former

teacher pay grants• Legislative requirements – e.g. Minimum Funding

Guarantee• DCSF expectations associated with ‘Ministerial Priorities’

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What is in the Funding Formula and Why?

• Age Weighted Pupil Unit – the number of pupils on role in January immediately preceding the financial year (school places in special schools)

• Ghost Pupils – additional funding to ensure that schools are able to meet the KS1 class size initiative

• LSC Funding – received from the LSC for schools sixth forms, local authority purely acts as banker

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What is in the Formula and Why?• Special Educational Needs – determined with reference to

prior attainment and the index of multiple deprivation to reflect the cost of those pupils that may require additional support

• Site Specific Factors – Funding to recognise the cost of occupation of property based upon site and building size

• Small School Protection – determined by size of school to recognise schools have overheads irrespective of pupil numbers

• Minimum Funding Guarantee

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Funding Schools Outside the Formula

• Not allowed under the financing regulations

• Retrospective pupil number adjustments prohibited

• Schools able to access contingency funding in certain circumstances BUT only where they experience unexpected pupil number growth or unexpected SEN costs

• Jeopardises the objectivity of the formula

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Administrative Arrangements

• Formula is published annually in the Section 52 Budget Statement – this is a public document and available on the County Council Website – contains details of all budgets for maintained schools and local authority expenditure

• Reviewed by the Schools (Funding) Forum – needs to be fit for purpose

• Amended after consultation with schools with Forum approval• Historically, amended incrementally - responding to the

environment, funding arrangements and DCSF expectations• Tends to be built upon rather than reviewed• Ability for changes within a defined multi-year period are limited

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In Summary …..

Any Questions?