Will there always be money for schools?

The Chancellor of the Exchequer has repeatedly declared that he will protect education and healthcare funding, but sometimes we need to look at the finer details. Often we hear that ‘frontline’ services will not be affected by spending cuts, but then we see the reallocation of funds from supporting services.

The UK education budgets total around £71bn:

  • £63.2bn in England (2018/19)
  • £3.3bn in Scotland (2017/18)
  • £2.5bn Wales (2017/18)
  • £1.96bn Northern Ireland (2018/19)

Cutting the red tape

In England, one of the bureaucratic obstacles that the Conservative-Liberal Democrat coalition wanted to remove early on was the ring-fencing of countless grants so that spending power was put into the hands of the Headteachers, who are far more in touch with the needs of their schools.

A new Dedicated Schools Grant (DSG) was created to absorb more than a dozen old grants and initiatives. As well as streamlining this funding allocation, the minimum funding guarantee (MFG) was introduced, pledging that a school’s budget would not be reduced by more than 1.5 per cent. Schools were already generating up to 4 per cent of their annual income from fundraising so these new measures came as some relief.

Funding based on the pupil population

Pupil-based funding formulae have taken on more importance over time. This is evident when we consider the standard per-pupil funding calculation, Pupil Premium (PP) and national capital funding formula. Each school receives a fixed amount per pupil averaging £4,900 pil for primary schools and £6,300 for secondary schools (according to the IFS in August 2018). On the whole, schools in cities receive more as they are perceived to accommodate more children from deprived backgrounds. In the June 2013 Comprehensive Spending Review, George Osborne announced that a national funding formula will be introduced to address these anomalies, which are are often based on complex calculations and historical factors.

The Pupil Premium is allocated to schools based on a number of factors including their number of ‘looked after children’ and those eligible for Free School Meals. For 2018/19, this was £935-1,320 per FSM pupil and £2,300 for LAC.

Building, Maintaining & Privatising

The national formula for capital funding allocates each school a flat £4,000, plus a per-pupil sum of £16.85 for primary schools, £11.25 for secondary schools £33.75 for special schools. With Building Schools for the Future (BSF) cancelled and the Priority Schools Building Programme only addressing around 250 projects, the James Review was convened to consider the future of school building and maintenance initiatives and to establish a standard blueprint for all future builds. £1.3bn has been allocated to local authorities to address capacity issues and an additional £1.4bn has been earmarked for maintenance projects.

A new dawn for privately funded school building and refurbishment programmes has also been approved, with 100 projects already underway. In these schemes private contractors build and maintain schools with contracts lasting anything up to 30 years. Over £2bn has already been paid upfront by the DfE, but a number of completion dates have been missed.

Are academies the answer then?

Academies are state schools with much greater freedom when it comes to hiring staff and spending their budget. Their funds come straight from central government so they receive more than other maintained state schools, as the local authority is not required to administer them. However, being outside of LA control also puts academies outside of their capital and consumables contracts and legal aid. Therefore, academies also receive a Local Authority Central Spend Equivalent Grant (LACSEG) to cover the cost of setting up the likes of VAT administration and insurance premiums. It’s the removal of the LA safety net that has prevented many schools even considering becoming an academy.