Schools across the country are unfairly funded as a result of an historic and out-of-date system. In March last year, the Secretary of State confirmed that we would rectify these injustices with a new national funding formula, it will be introduced during the next spending review period. The Secretary of State also announced a number of changes to the school funding system to pave the way for a national funding formula. These changes took effect from April 2013.
This started a welcome journey towards a fairer and more transparent funding system, but following consultation with the sector a number of improvements to the initial arrangements need to be made.
The Department carried out a review to understand how the changes introduced in April 2013 have been implemented. We published a document on 12 February seeking views from our partners, and officials also undertook fieldwork in 11 local authorities spread across the country.
We are grateful to the many MPs, head teachers, governors, local authority officers and parents who have taken the time to contribute as part of the review.
Today we are publishing a document which sets out the changes we will be making to school funding arrangements in light of the findings from the review.
In order to maintain momentum towards a national funding formula, we will ensure that more money is targeted to pupils. We will require local authorities to allocate a minimum of 80% of their funding on the basis of pupil characteristics and we will also be setting a minimum amount that each pupil should receive.
In our consultation there was concern about the ability of local authorities to support small schools in rural areas. From April 2014, therefore, we will enable local authorities to provide additional funding for schools in sparsely populated areas.
The document also sets out new flexibilities to provide different amounts of funding to cover the fixed costs of primary and secondary (as well as middle and all-through) schools. These new flexibilities will ensure local authorities can act to take account of varying fixed costs between different types of school. Schools that merge will also be able to keep some of their funding for fixed costs for at least the first year.
We will continue to target support on deprived and vulnerable pupils. Local authorities will be required to target additional funding to deprived pupils in addition to the pupil premium. We are also making changes to ensure that those pupils who are less likely to attain well at the end of the primary or secondary phase are identified and attract additional funding.
We also want to encourage local authorities to provide the right level of additional funding for schools to enable them to support looked-after children, regardless of how long the child has been in care.
We made significant changes to the funding arrangements for pupils with special educational needs last year so we are not making any further substantial changes in 2014. We are, though, intending to require all local authorities to provide notional SEN budgets to their schools on the basis that the school will meet the costs of the first £6,000 of additional support required by a pupil with SEN.
In the document we are publishing today, we are providing the detailed findings from the review, the approach which will be put in place from April 2014 and technical guidance on this for local authorities. Copies of these documents will be placed on the Libraries of both Houses.
Taken together, these changes will further strengthen our funding reforms and will help us move towards our aim of ensuring that pupils attract a more consistent amount of funding wherever they go to school in the country.