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by Jamie Cater 7th March, 2016

School funding proposal takes more power away from councils

Schools funding is one of the policy areas in which the Conservatives have been on something of a journey over the last 12 months. Originally promising to protect the schools budget only in cash terms – not real terms, as the coalition government had done over the previous five years – in the run-up to the general election, the party was criticised for preparing what amounted to almost a 10% cut to the schools budget by 2020. Following election victory, the party maintained this promise until the Spending Review in November last year, when the Department for Education was one of the beneficiaries of George Osborne’s unexpected windfall. The government pledged to protect the schools budget in real terms once more.

More significant than this, however, was the promise to develop a new national funding formula for schools. Many had been convinced that, despite Ministers having made vague promises about creating a national formula in the last parliament, this would be something that was continually kicked into the long grass. Even the £350 million awarded to schools in 2014 with the intent of addressing some of the inequalities in the system was dismissed by many in the sector. Such cynicism appears to have been unfounded, as the Department for Education’s consultation on the proposed new funding formula was published this afternoon.

Arguably the most important aspect of the formula, other than seeking to end regional disparities in schools funding, is the routing of cash directly to schools rather than through local authorities. Under the current system, councils have the power to decide how money is distributed between schools in their local area. This is the partial fulfilment of Osborne’s promise in the Spending Review to ‘make local authorities running schools a thing of the past’, and constitutes a fairly radical move from the government. This will not extend to the distribution of high needs funding (the money allocated for pupils with special educational needs), however, which will remain within the remit of local authorities.

The current system often stands accused of creating winners and losers; schools in London and the south east, so critics say, benefit disproportionately, while those in the north are discriminated against. A new funding formula that aims to rectify this sits well alongside the government’s goal tilting the focus of economic development away from the capital and into the regions, and contributes further to the Conservatives’ aim of building a stronger base of support in parts of the country where they have historically performed poorly in elections. In addition to this, it also complements the promotion of more autonomy in the schools system enshrined in the Education and Adoption Bill, soon to become law. It may even provide something of a boost to the leadership ambitions of Nicky Morgan, who has declared her interest in running but remains something of an outsider in any future contest.

There remain some questions around the timing of the reforms and their political impact, too. Given the expected impact on London boroughs, it had been rumoured that Ministers were deliberately delaying announcements on the funding formula until after the London mayoral election in May. The consultation runs until 17th April, meaning it is unlikely that the government will respond until Zac Goldsmith’s fate has been decided.

The proposed formula will please those who have long called for a fairer way of funding England’s schools, but it may encounter some stiff opposition from MPs and local authorities in the South who may feel that they are being unfairly treated. This is a bold move from the government to give yet more autonomy to schools, but it certainly will not be uncontested.

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