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Three-year School Funding Settlement

Volume 699: debated on Monday 19 July 2021

Today I am confirming provisional funding allocations for 2022-23 through the schools, high needs and central school services national funding formulae (NFF). The allocations distribute the final year of the three-year school funding settlement that the Secretary of State for Education announced to Parliament on 3 September 2019. Core school funding increased by £2.6 billion in 2020-21, and is increasing by £4.8 billion and £7.1 billion in 2021-22 and 2022-23 respectively, compared to 2019-20.

These allocations are part of the annual funding cycle. They are separate to the three major interventions we have made to support education recovery in response to the covid-19 pandemic—over £3 billion in total. All of that support for recovery will be provided on top of the funding allocations announced today for local authorities and schools.

Funding through the schools NFF is increasing by 3.2% overall in 2022-23, and by 2.8% per pupil. The NFF will distribute this funding based on schools’ and pupils’ needs and characteristics. The main features in 2022-23 are:

The core factors in the NFF (such as basic per-pupil funding, and funding for additional needs such as deprivation) will increase by 3%.

The funding floor will ensure that every school is allocated at least 2% more pupil-led funding per pupil compared to its 2021-22 NFF allocation.

The minimum per pupil funding levels will increase by 2%, compared to 2021-22. This will mean that, next year, every primary school will receive at least £4,265 per pupil, and every secondary school at least £5,525.

Support for small and remote schools (through the “sparsity” factor) will receive a further increase. In 2022-23 the additional funding that such schools can attract is rising to up to £55,000 for primary schools, and up to £80,000 for secondary schools—in both cases, a £10,000 increase from 2021-22. We are also moving to using road distances instead of straight line distances when measuring a school’s remoteness. This will significantly increase the number of schools attracting this funding. As a result, the funding allocated through the sparsity factor is increasing from £42 million in 2021-22 to £95 million in 2022-23.

High needs funding is increasing by £780 million, or 9.6%, in 2022-23—following the over £1.5 billion increase over the last two years. This brings the total high needs budget to £8.9 billion, an increase of over a third since 2019-20. The high needs NFF will ensure that every local authority receives at least an 8% increase per head of population, with some authorities seeing gains of up to 11%. This vital extra resource will continue to help local authorities manage their cost pressures in this area, while the Government remain focused on completing the cross-departmental review of the SEND system to ensure that it supports children and young people with SEND as efficiently and effectively as possible.

Central school services funding funds local authorities for the ongoing responsibilities they continue to have for all schools. The total funding for ongoing responsibilities is £284 million in 2022-23. In line with the process introduced for 2020-21 to withdraw funding over time based on the historic commitments local authorities entered into before 2013-14, funding for these historic commitments will decrease by 20%.

The provisional NFF allocations published today will be updated, based on the latest pupil data, to produce final allocations in December that local authorities will receive through the dedicated schools grant.

Local authorities will continue to use that funding to determine final allocations for all local mainstream schools. In parallel with the changes being implemented for 2022-23, the Government are in the process of consulting on how we complete our reforms to the schools NFF in the longer term—whereby funding allocations for individual schools are determined by one single national formula, rather than 150 separate, different, local authority formulae.

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