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School Reform

Volume 542: debated on Monday 26 March 2012

Today I am announcing our next steps in reforming the school funding system. These build on the plans we consulted on in July 2011, “A consultation on school funding reform: Proposals for a fairer system”. Since that consultation, we have given very careful consideration to creating a system that allocates funding on a fair and transparent basis and targets additional funding towards pupils who need it the most.

The current system for funding schools makes raising the aspirations and attainment of all pupils difficult to achieve because funding does not always reach the pupils who need it most; we are clear that we need to tackle this. We want funding to follow pupils and pupils with additional need to attract additional funding. We also want to enable good schools to expand more easily so that more pupils can benefit and we want schools to know easily how their budgets have been calculated so they can plan better.

In our last consultation we sought views on the introduction of a national funding formula, which would distribute money to local authorities based on the current needs of pupils. We also proposed simplifying the way that local authorities distribute that money to schools so that the whole process is more transparent and supports the needs of pupils.

Support for reform was widespread but responses also suggested this model would need refinement and careful implementation. Getting the components and implementation of a fair national funding formula right is critical and we need to manage transition carefully so there is the minimum disturbance for schools. In the current economic climate, stability must be a priority.

The plans we are setting out today in “School funding reform: Next steps towards a fairer system” are our first steps towards introducing a national funding formula and explain how the system will operate from 2013-14.

They show how local decision-making will be much simpler, more transparent and efficient. They will mean that administrative burdens on schools, academies and local authorities will be reduced and that funding arrangements are more understandable to head teachers, principals and governors, with less need for complex data and calculations. Local arrangements will be strengthened by improvements to schools forums.

Schools will receive the stability they need as our plans also announce that the minimum funding guarantee will remain at minus 1.5% per pupil for 2013-14 and 2014-15. Schools will also be able to receive earlier notification of their budgets and academies will be funded on a more comparable and equitable basis through the Education Funding Agency.

As well as funding for schools, our plans will support locally-driven simplification of the funding arrangements for early years and a new funding system for children aged 0 to 25 who have high educational needs. Improvements to funding for high needs provision will mean it can be more responsive and will enable greater choice for children, young people and their parents.

I am also taking steps in advance of introducing a national funding formula to address a clear anomaly in the current funding system where a small number of authorities receive funding at a level that does not reflect the mandatory pay levels for teachers in their schools. The local authorities affected are Haringey, Barking and Dagenham and Newham.

All these steps will prepare us for introducing a national funding formula in the next spending review that will ensure fairer funding across the country, where funding follows pupils, schools have more control over their budgets, and children are funded on a more equitable basis no matter where they live.

Copies of this publication will be available in the Libraries of both Houses.