This research briefing provides historical information about the introduction of a national funding formula for schools in England, and the current school funding system.Jump to full report >>
For up-to-date information on school funding reform, please see our linked briefing paper:
The briefing below is not current will not be further updated, but is available as a historical account of policy development up to June 2017; it also provides detailed information on the current school funding system in England.
The 2015 Government committed to introducing a national funding formula (NFF) to calculate the amount of core revenue funding that mainstream schools in England would attract. There isn't currently a national formula like this; funding levels are instead determined through a complex combination of national and local funding decisions.
This is the formula that the 2015 Government proposed would be used to calculate and distribute core revenue funding for mainstream schools in England.
The Government also proposed separate formulas to calculate early years funding and high need funding (largely this is for high-cost provision for children with SEND), as well as for some services still centrally provided by local authorities.
As well as money from the NFF, schools would also get income from other sources, including: the Pupil Premium which on 2015 Government plans would remain outside of the NFF; 16-19 funding if they have a sixth form; early years funding if they have nursery classes; voluntary contributions and fundraising, to varying degrees; and capital funding for maintenance, renovations and new places, where appropriate.
The 2015 Government intended that the NFF would be introduced in a 'soft' format in 2018-19 and a 'hard' format from 2019-20.
It consulted on the weightings in the NFF and implementation just prior to the 2017 General Election. At the same time it ran a consultation on high need funding – largely, this is money to support the education of children and young people with special educational needs and disabilities.
Alongside the second stage NFF consultation, the DfE published illustrative figures showing how schools and local authorities might fare in two hypothetical scenarios under the proposals:
These illustrative figures weren’t intended to show what any school would get in any particular year, and the DfE didn’t provided illustrations for future years beyond 2018-19. However, it did say that no school would see annual cuts in per-pupil funding of more than 1.5% in any one year and more than 3% overall (i.e. across more than one year) as a result of the NFF. Increases at individual schools were due to be capped at 3.0% per pupil in 2018-19 and 2.5% in 2019-20.
The Conservatives’ 2017 General Election Manifesto subsequently pledged that no school would have its budget cut as a result of the new formula; see section below for more on this, and on other parties’ school funding pledges.
If the NFF is implemented, actual allocations would depend on a range of variables including:
in its December 2016 consultation, the DfE said that as a result of its proposals:
Groups of schools the DfE said were more likely to gain were:
The DfE said that the main group of schools likely to see reductions were:
Those in Inner London and some other urban areas that have particularly benefitted from historic funding decisions and where underlying levels of deprivation have fallen over recent years […] The main reason that this formula would reduce funding to schools in these areas is that we are using the most recent data about relative levels of socio-economic deprivation.
On 14 December 2016, the National Audit Office (NAO) published a report on the financial sustainability of schools in England.
This said that mainstream schools, overall, would need to find £3 billion of efficiency savings by 2019-20. This equated to a net real-terms reduction in per-pupil funding of around 8% for mainstream schools between 2014-15 and 2019-20. The NAO reported that:
The 2015 Government accepted that schools were facing cost pressures, said it was helping them to make efficiencies. It also sought to differentiate between two issues - i.e., the overall level of school funding and how funding was distributed.
School funding pledges included (but weren't limited to) the following:
This note relates to England only.
Commons Briefing papers SN06702
Authors: Nerys Roberts; Paul Bolton