Essex Small Schools

Essex Schools Funding Formula Review

Archive for the month “June, 2012”

Funding SEN through Deprivation

Late last night, members of the SGRG received an email from Tim Coulson, Essex’s Director of Education and Learning. In it, he proposes to modify the funding proposals for low-cost high-incidence SEN, suggesting the removal of all funding based on the “prior attainment indicator” of EYFS results, and instead putting all existing AEN funding into deprivation. His motivation – not unreasonable in the abstract – is that schools would otherwise have a perverse incentive to keep EYFS results down in order to get more funding. Along with other members of the SGRG, I have expressed my reservations about this proposal (see below).

Dear Tim,

Like Richard Thomas, I have some sympathy with the motivation for your proposal. However, I very strongly disagree with the proposed solution, for a number of reasons, some of which echo Jeff’s perspective:

  1. We must not forget that low-cost high-incidence SEN funding is made from three elements, not only two: a proportion of per pupil funding, deprivation funding, and prior attainment. If the motivation for the proposed change to the consultation is that – in practice – EYFS attainment is (or will become, due to perverse incentives) a poor proxy measure for SEN, then it appears that the appropriate solution would be to add this funding to the per-pupil funding, not to simply double the amount funded through deprivation indices. Thus it would go to all schools, whether in deprived areas or not: this is the natural solution if the belief is that this is a poor proxy measure – essentially removing it as a separately funded element. Increasing the weight of other proxy measures – in contrast – is not a reasonable response.
  2. The net result of the proposal to distribute all existing AEN funding though deprivation would be a severe underfunding of low cost high incidence SEN in areas of low deprivation. Such a move should only be taken if there is concrete evidence that there is a very strong correlation between low cost high-incidence SEN and IDACI index. I have not seen that data, and the limited data I have seen on results (see, for example, indicate that this is unlikely to be the case. In practice, I believe we will be severely short-changing those youngsters with genuine SEN who happen to live in relatively affluent areas of Essex.
  3. The perverse incentive you highlight – keep EYFS data down and you get more funding – already exists in Essex’s current AEN formula (which is based on EYFS results for KS1 pupils and KS1 results for KS2 pupils). However, the counterweights against such an incentive are the incentives EYFS practitioners have to show the children in their class are making good or outstanding progress, the moderation process and the inspection processes. Is there evidence to suggest that schools already artificially keep their EYFS scores low? If not, what mechanism do you expect to be present after the 2013/14 change that is not already present? If nationally the DfE intents to cohere on EYFS indicators then perhaps more emphasis will need to be put to ensure robust moderation of EYFS data in time – this will be a national issue which would need a national solution.
  4. The general principle adopted by the SGRG given the timeframe – stated explicitly at the beginning of the draft consultation document – is to make minimal changes to the existing funding of schools. The existing scheme for primaries is 50% of AEN comes  from IDACI and 50% from EYFS+KS1. Changing this to 50% IDACI and 50% EYFS (end) seems justifiable from the general principle followed. Changing it to 100% IDACI does not. As I stated at the SGRG meetings, I am not at all confident that the 3% AWPU + 50% of AEN through EYFS + 50% of AEN through IDACI is the best split: an evidence-based approach that looks at the correlation of these EYFS results, IDACI, and FSM with either KS1 and KS2 results and/or current ESA/ESA+ designations and funds as a function of the correlation seems more appropriate. However, such a study was not possible within the timeframe allowed. Nevertheless, it should be considered in future years.

I hope this is helpful.

Best regards,


DfE Release Final Details

Today the DfE release final details of the constraints under which LAs must operate for 2013/14 funding formulae: click here for details. The SGRG have been asked for their quick input into various aspects that have changed, in particular:

  • Minor changes to IDACI banding for deprivation funding
  • The ability to use 73 rather than 78 points as the EYFSP threshold for receiving prior attainment funding
  • The ability to set a lump sum of up to £200k rather than up to £150k (but with a possible lower cap in years to come)
  • The ability to retain funding for increased pupil numbers (“trigger” funding)

The LA needs to finalise its own proposals for Schools Forum by Monday. My own (hurried) response to the LA’s request is below:

  • I agree with the LA’s proposal not to change the IDACI funding from that previously agreed by the SGRG
  • I propose targeting Primary EYFS-based prior attainment at 73 points rather than 78 points since we have the option. Setting at 78 points may be too high to catch the low-level SEN issues that it was designed to pick up & this is probably the reason that the DfE have received representations from other LAs about this question.
  • It is interesting that they’ve allowed lump sums above £150k. While I don’t think we have to increase above £150k, to be consistent with the principle we followed of causing minimal funding turbulence over the coming years, it perhaps makes sense to run a model with greater than £150k to see whether the turbulence increases or decreases over £150k. Clearly for secondaries it may be preferable to have a lump sum closer to their original value, but so long as it remains at at least £150k, I do not have serious reservations here.
  • I agree with the LA’s proposal to retain “trigger” funding for pupil growth, but would propose that it operates on a different basis. Currently there is a minimum size pupil growth of 5 pupils before it kicks in for primary schools – this figure 5 is a large proportion of a school with 75 pupils (7%) but only a small proportion of a school with 420 pupils (1%) which seems inappropriate. Instead I would suggest either removing the qualifying threshold, and just funding based on the actual number of increased pupils (my preferred option) and/or turning it into a proportionate threshold, e.g. increases greater than 2% of the school roll.


Report from Final SGRG Meeting

Today was the final SGRG meeting before the consultation goes out to schools over the 2013/14 funding formula.

The meeting was mainly spent discussing the details of the consultation document to be sent out and improving the clarity of the document.

There were, however, some important substantive points raised on the funding formula itself:

  • I had asked the LA to investigate the DfE’s proposals to fund low cost high incidence SEN via the prior attainment proxy. The consultation paper from the DfE was unclear how this would work. For primaries, it is clear that it will be based on the number of children failing to reach 78 points in EYFSP, but it was unclear which children will contribute to any given year’s funding. My hope was that it would be all children in the school, but the LA’s view is that it appears that it will be only those children in Year 1 (Year 7 for secondaries). Thus in years where a school has a reception year with excellent EYFSP results, they will be starved of funding for ESA and ESA+ pupils further up the school. I hope this is not the case, and the LA and I will both be seeking clarification from the DfE.
  • Mr Coulson, via Mr Stupples-Whyley, raised his concern over the use of EYFSP data as a proxy for SEN, as it is a dubious “prior attainment” indicator given that it is typically not prior to the school. The alternative suggestion was to put all funding currently going into the AEN factor into a deprivation proxy rather than a prior attainment proxy. I argued strongly against this, as did all other members of the SGRG who spoke, on the basis that the result would be underfunding SEN in affluent areas, and so the proposals to go to Schools Forum will be to keep this funding. Nevertheless, I do believe that the whole split of SEN proxy funding between per basic pupil entitlement, prior attainment, and deprivation, needs to be considered from a more rigorous evidence based approach in the future.
  • My proposal from last SGRG to keep KS1 class size contingency funding as a retained contingency by the LA for maintained schools will be put as a recommendation to Schools Forum.
  • I re-stated my proposal to hold over a contingency to fund schools unable to meet the £6k contribution to the cost of high needs pupils through their delegated notional SEN budget. The LA is proposing a similar contingency fund for 2012/13, and I proposed that this be costed and an equally sized contingency be retained at the recommendation of Schools Forum for 2013/14. This proposal, it appears, received little support from the SGRG, but the Chair said that he is sure that the LA would consider it.

In addition, there was some discussion about the form in which spreadsheets should be presented as part of the consultation. I asked the LA to ensure that

  • Minimum Funding Guarantee “top up” funding is clearly indicated for each school, as well as total funding. In this way we can be transparent about how far from the formula funding each school will be under the proposals. This has very significant implications for 15/16 and thereafter, as the DfE has signalled it is likely to have a lower MFG level by then.
  • That the Year 1 % change figure is presented after the transfer of any “de-delegated” funding from schools back to the LA. This is important, in my view, because it allows schools to make a “like for like” comparison.

These points were agreed by the Group.


Next Steps

These proposals will be taken to the Schools Forum meeting on the 11th July 2012. Once the final wording is approved by the LA, the consultation with schools will go out in July, to be returned on 19th September 2012.



Report on 3rd SGRG Meeting

Yesterday was the 3rd SGRG meeting. I have briefly summarised the outcomes, below.

Lump Sum

After some discussion, it was decided at the meeting to propose that the LA recommends a lump sum of £150k in the consultation document going out to schools later in the year. This is the figure modelled that results in the least overall funding turbulence in Essex according to figures presented by the LA. It is also the highest lump sum value likely to be allowable by the Department for Education. I am very pleased that we will be making this recommendation, as I believe the figure is also an accurate representation of the fixed costs of running a small school. Since the DfE has been clear in its consultation document that MFG may be reduced significantly from 15/16, it is important that the funding we receive is formulaic rather than based on MFG, and this value ensures that this is largely the case. It was also decided, however, for the sake of comparison, to also model a lump sum of £100k in the consultation, so it will be important that schools respond in support of the LA proposal of £150k.

EYFSP as a Proxy for SEN

The DfE is mandating that EYFSP scores are used as a the prior attainment proxy measure for allocating SEN funding to support School Action and School Action Plus in primaries, with funding distributed in proportion to the number of children not reaching 78 points. Currently Essex uses EYFSP for KS1 pupils but KS1 results for KS2 pupils. I asked the LA to verify that the funding will follow a child, i.e. that the funding received by a primary school will include all children who did not reach 78 points, no matter which year they are in. We certainly do not want to be in the situation where a school with a blip year with many low-attaining children receives significant funding when those children are in Year 1 which then disappears again for the following years. The LA will investigate this issue.


It is proposed not to retain EAL funding centrally, but instead to distribute it through the formula, to ensure it is targeted in the case of academies. It is proposed to only fund EAL for 1 year, but possibly to increase the rate of funding so that “short, sharp interventions” are possible and adequately funded.

London Weighting

There is some confusion currently over the way London Weighting will work, as the DfE’s pro-forma only allows a single figure but Essex has both Outer London and Fringe areas. The LA is seeking clarification.

Retained Schools Block

Under the DfE’s list of exceptions where the LA may retain funding, it includes “exceptional unforeseen costs which it would be unreasonable to expect governing bodies to meet”. I proposed that funding be put aside in this pot to cover any schools unable to contribute the first £6k of high needs costs as proposed by the DfE, due to a low level of notional SEN distributed funding. I also recommended retention of the KS1 class size contingency budget.

Consultation Document

We had a preview of the LA’s consultation document to schools, to be sent out in July. This largely summarises the DfE’s proposals and the room for manoeuvre Essex has within this proposals, before outlining the views of the SGRG over how to make best use of this flexibility. All members of the SGRG were agreed that our proposals may not be optimal in terms of resource allocation, but equally all were – I believe – fairly happy that we have made a reasonable set proposals that can be made within five two hour meetings without data available on educational outcomes. I asked that the consultation document paragraph on lump sum be changed to reflect that the previous lump sum was only ever supposed to be a contribution to the fixed costs of running a school. There will necessarily be some change to the way IDACI is used to distribute funding, and so several of us asked that sufficient information is included in the consultation document to ensure a comparison is possible, e.g. by providing the IDACI scores corresponding to deciles of deprivation in Essex.


MFG Problem Solved

Today I received an email from the DfE confirming that they are aware of the problem I raised in my previous post on MFG, and have acted appropriately. Lump sums will now be deducted at the 2012/13 level when computing the MFG for 2012/13. Thus at least one problem goes away. This is good news, as it ensures that we can focus on defining the level of lump sum that is appropriate to fund schools, rather than focusing on fudging the issue to get around technicalities of MFG calculation. Thank you, DfE!


Again on Lump Sum

Mr Adams tells me that the discussion over lump sum at the meeting on the 6th June revolved mainly around two values £80,000 and £93,354, depending on how the MFG computation eventually works. These figures are odd, and well below expectation.

Two basic principles – not necessarily consistent – have been suggested by various members as a way to determine the lump sum element:

  1. Choose the lump sum to be an accurate reflection of the fixed costs of running a school.
  2. Choose the lump sum such that the funding turbulence in schools, introduced as a result of this formula review, is minimized.

The values of £80k and £93k are not consistent with either principle, as I outline below.

Are these an accurate reflection of the cost of running a school?

As I pointed out in a previous post, the mean fixed costs of running a school in Essex are around £150k. The lower quartile was £135,202. Not a single school reported a fixed cost of less than £100k.

Are these values that minimize turbulence?

As I suggested in a previous post, a lump sum in the region of £117,180 would – on average – reproduce the effect of the 2011/12 formula. Even if we allow for the 1.5% reduction in per pupil funding most small schools are currently on as a result of the 12/13 formula change, this gives a lump sum of £115k. The figure of £93k therefore will cause significant turbulence to the smallest schools.

In order to illustrate this point, I have generated the graph below (primary schools only). This shows what happens if you distribute the funding that in 2012/13 went into lump sum, key stage funding, and minimum funding guarantee, under a variety of scenarios. These are:

  • The 2011/12 small school funding, lump sum, and an average of the TCA allocation, with the remainder distributed proportionally to pupil number.
  • As above, less 1.5% to model the status quo for small schools who have found themselves on MFG as a result of the 2012/13 formula changes.
  • The 2012/13 small school funding and lump sum, with the remainder distributed proportionally to pupil number.
  • A lump sum of £93,354, with the remainder distributed proportionally to pupil number.
  • A lump sum of £115,000, with the remainder distributed proportionally to pupil number.

The plot has been zoomed in to see the impact on small schools. It is clear from the plot that the value £93,354 represents yet another significant cut for small schools in Essex – and indeed on a significantly greater scale than the cut last year!

This should not be a surprise: under the current formula, very small schools get a top up in the region of £30k on top of their lump sum of £77k. This is down around £4k from what they received in 2011/12 (a loss of around £8k in small school subsidy and an average of £3k in TCA, but an increase of £7k in lump sum). This cut pales into insignificance compared to the £14k cut when moving to a £93k lump sum.

MFG or no MFG

Returning to the two figures Mr Adams mentions, £80k and £93k, it is worth pointing out that these are not only inconsistent with the above-mentioned principles, but also with each other. Under lump-sum MFG exclusion, to achieve the same net effect in 13/14 as having a £93,354 lump sum with MFG re-costing, would require a lump sum of £85,461, not £80k. A greater lump sum would be required to maintain this net effect beyond Year 1.

I hope that this coming week we can return to discussion in the range £100k to £150k.


Substitution Concerns

Unfortunately, I was not able to attend the SGRG meeting this week, due to a clash with a prior commitment (I can attend all others). As a result, I spoke to Derek Adams (Stisted Academy) and asked him to take my place at the meeting. Readers of this blog will know that Mr Adams was heavily involved in representing small schools during the 12/13 funding review. He is also a chair of governors – like me – and of a primary school with approximately 100 pupils – like me.

Some fellow members of the SGRG took exception to this action. I include the emails I received below and my responses, in the interests of openness, but I will refrain from commenting on them. In the end, Mr Adams did attend the meeting on my behalf (I will post a report soon). I hope this was a short blip and that we can re-engage constructively next week and focus our attention on the matter at hand: ensuring a funding formula consistent with the stated aim of a “world class” education.

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