Essex Small Schools

Essex Schools Funding Formula Review

Schools Forum 18th May 2016

On Wednesday Essex Schools Forum met for its latest meeting. Readers of this blog may be particularly interested in the following issues discussed.

Enhanced provision for pupils with Social, Emotional and Mental Health needs in mainstream primary schools
We received an interesting report from Ralph Holloway on this topic. It seems that out-of-county placements are on the decline, but the number of permanent exclusions is increasing rapidly, with as many pupils excluded this school year than the last two combined, which in turn was a threefold increase on 2012/13 data. The proposal was to allocate some high needs funding to establish enhanced provision for 64 pupils. However, as part of the discussion, I discovered that the current source of such funding – the Behaviour and Attendance Partnership – is drawn from de-delegation, and hence the bill entirely falls on maintained schools with academies effectively “opting out”. This is clearly unfair. I therefore proposed deletion from the recommendations of all mention of BAP funding, which was accepted.

Falling Rolls Fund Criteria
Readers of this blog will know that Essex has established a fund for schools with falling rolls where there is an expectation that this is a short-term blip. This fund is currently being used to supplement funding to a couple of secondary schools. I asked how schools were made aware of the existence of the fund and the criteria to access the fund, as it seems to be “word of mouth” that the moment. ASHE confirmed that secondaries knew about the fund. I requested that the funding handbook be updated to refer to the fund and its criteria, and this was agreed.

Potential Implications of a Schools National Funding Formula
We are currently between two phases of consultation over the proposed national funding formula. Readers can see my response to the first phase here, and the LA’s own response is not radically different in content from mine. Phase 2 of the consultation is expected at the end of June or early July, and I would strongly encourage schools to respond.
As an early estimate of the likely effect of a national funding formula on schools in Essex, the LA had prepared very early school level models under a variety of different circumstances:
  1. All funding factors except AWPU funded at the average levels across all LAs in the country, AWPU determined by what remains in the Essex schools block funding.
  2. AWPU funded at the average levels across all LAs in the country, all other factors set at Essex levels.
  3. All factors except Lump Sum funded at the average levels across all LAs in the country, Lump Sum determined by what remains in the Essex schools block funding.
None of these look like good news for Essex small schools, with funding cuts of 8% to 29% in Year 1 of the national funding formula for one of our smallest schools, and with all schools bar one with fewer than 158 pupils losing revenue funding. However – don’t panic! – I don’t believe these models are realistic, for the following reasons:
  1. The averaging process used for these models was to take the arithmetic mean across local authorities. In practice, this could lead to politically unacceptable radical shifts in the total education funding budget because authorities differ considerably in size. If the DfE does try to converge on average values, then to keep total funding unchanged they would need to average pupil-led factors on a per pupil basis and school factors (lump sum) on a per school basis rather than both on a per LA basis. I don’t, of course, believe they should use either approach, but rather fund lump sum as a genuine reflection of the fixed costs of running a school. But if they do go down the route of formulaic convergence, then a sensible approach would be to take the variation of school sizes into account when weighting the lump sum of a local authority – in LAs where schools are of similar sizes, lump sum value is far less important than in LAs where schools are of wildly differing sizes. Time will tell.
  2. I don’t think the LA has changed the primary secondary funding differential to national average levels when calculating these figures. If that were to happen, then primary schools in Essex might see about a 3% uplift in funding which would partially offset some of the negative impact in the model.
  3. The DfE is very keen on underpinning the pupil led factors. I therefore think that Model 1 is unlikely to be reflection of Government thinking. Equally, Model 2 seems unrealistic because I do expect a lump sum reduction after the introduction of the funding formula. Finally Model 3 seems unrealistic because it leads to a too significant reduction in Lump Sum, to only £78k for primary and £16k for secondary, again this would probably be unacceptable politically.
  4. Minimum Funding Guarantee has been applied to these models, meaning that the expected losses over time will be even greater (I requested that the next time Schools Forum considers such models, we look at a version without MFG to see the long-term effect). I do expect a form of MFG / transitional funding to be applied by the national Government, but I doubt it will take the form of current MFG. In particular, the estimates presented assume that MFG does not protect lump sum at all, which makes sense if lump sum doesn’t change from one year to the next but does not make sense if lump sum were cut dramatically. Thus I don’t think the models presented are realistic in Year 1 (I expect more protection than that predicted) nor in the long term (I expect less protection than that predicted!)
In summary, while I think the LA has done the best it can with the information available to us at this stage, I’m not convinced that these school-level projections are meaningful at this stage. However, a simple back-of-the-envelope calculation would suggest that with an uplift of 3% due to an adjusted funding differential but a cut in lump sum of around £30-50k (a total guess on my part), schools with a budget of less than £1m are very likely to be losers. This is something all small schools need to get to grips with during and after the second consultation period. We will need to begin to lobby our MPs to ensure an appropriate lump sum value. Indeed, while the arithmetic mean lump sum across the LAs is lower than the Essex value, the modal lump sum is in line with ours – for good reason – we need to fight to keep it that way.

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2 thoughts on “Schools Forum 18th May 2016

  1. Pingback: Schools Forum July 2016 | Essex Small Schools

  2. Pingback: Schools Forum: October 2016 | Essex Small Schools

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