House of Commons Library

School funding in England: FAQs

Published Tuesday, November 5, 2019

This briefing paper aims to give a short, non-technical overview of issues around school funding in England and answer frequently-asked questions on this subject. It's been updated following the Government's Summer 2019 funding announcements.

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Scope of briefing paper

This briefing paper gives a short overview of school funding in England. It looks at overall funding levels, the Government’s Summer 2019 funding commitments, and the implementation of the new National Funding Formula (NFF) for schools.

Overall levels of funding

In recent years, there have been concerns about a squeeze on school funding, in the wider context of increasing pupil numbers and cost pressures facing schools. In response, in 2017, the Government committed to maintaining core per pupil school revenue funding, in real terms, for 2018-19, and 2019-20. It also said it was helping schools to identify savings. However, concerns remained, particularly around funding for special educational needs and sixth form provision.

Summer 2019 school funding announcements: what has the Government promised?

In Summer 2019, the Government announced it was providing additional funding for 5-16 year olds in schools in 2020-21, 2021-22 and 2022-23. In cash terms, the annual increases are:

  • In 2020-21, £2.6 billion (on top of 2019-20 funding).
  • In 2021-22, £2.2 billion (on top of 2020-21 funding).
  • In 2022-23, £2.4 billion (on top of 2021-22 funding).

The Government is also providing £1.5 billion per year in recognition of additional employers’ contributions to teacher pensions, and £400 million in 2020-21 for 16-19 education.

What will the funding be used for?

The Government made several specific commitments, including:

  • Increasing the per pupil minimum funding levels attracted by mainstream schools to: £3,750 (in 2020-21) and £4,000 (in 2021-22) for primary schools, and £5,000 in both years for secondary schools. It has recently consulted on how to implement a new requirement for local authorities to pass these minimums on to schools.
  • Payment of any remaining gains due under the new national funding formula (NFF) – so far, gains due have been capped.
  • An increase of 4% to the NFF’s core factors.
  • That the funding floor in the NFF will be set at +1.84% in respect of pupil-led funding, per pupil (compared to schools’ 2019-20 NFF baselines). This is in line with predicted inflation.
  • £780 million in additional High Need funding - largely, this is for special educational needs provision.

Reaction to the Government’s school funding pledges

The schools funding announced equates to a real-terms increase of £4.4 billion to the schools budget between 2019-20 and 2022-23. This excludes the additional teacher pension funding.

The Institute for Fiscal Studies has estimated that the additional funding means a real-terms increase in spending of 7.4% per pupil between 2019-20 and 2022-23, and after accounting for an expected increase in pupil numbers. The additional funding would, the IFS said, come “very close” to reversing the 8% (real terms) cut in total school spending per pupil seen between 2009-10 and 2018-19.

Whilst the additional funding has been welcomed, critics have noted that it won’t be made available until 2020-21. Others have observed that the promised funding may also be expected to cover significant teacher pay increases and have raised concerns about the distributional impacts.

What is happening with the national funding formulas (NFF) for schools and high needs in 2019-20 and 2020-21?

Since 2018-19, the new National Funding Formula (NFF) has been used to determine how much mainstream schools attract in core revenue funding. There are separate formulas for sixth form, high need, and early years (nursery) funding. Pupil Premium (additional money to support disadvantaged children) is also paid via a separate grant.

In 2019-20 and 2020-21, the schools NFF is only being used to work out notional allocations for individual schools. These are then summed, adjusted and passed on to local authorities, who then draw up local funding formulas for onward distribution. This is known as a soft NFF.

A change for 2020-21 is that local authorities will be required to pass on the new minimum funding levels in the NFF to individual schools, via their local funding formula arrangements. The Department for Education has recently consulted on how to implement this change, and on the circumstances in which the requirement could be disapplied.

The Government has said that it remains committed to introducing a hard NFF (largely removing the role of local authorities in distributing core schools funding) but hasn’t confirmed a definite date for this.

What impact will the recent funding announcements have on particular individual schools?

The DfE published notional, provisional NFF allocations at school and local authority level, on 11 October 2019.

A House of Commons Library Insight article provides analysis of these figures, and a constituency estimates of the real terms change in per pupil NFF allocations in 2020-21 (compared to the 2019-20 notional NFF baseline allocations).

The DfE’s October 2019 notional school-level allocations are not what individual schools will actually receive through the NFF in 2020-21; local authorities will retain a degree of flexibility in determining local funding arrangements.

 

Commons Briefing papers CBP-8419

Author: Nerys Roberts

Topic: Schools

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