Schools Forum June 2022: Government Response to School Funding Consultation

Meeting: Schools Forum 

Date: 20 June 2022 

Report of: Head of Health, Adults, Families, Children and Learning Finance 

Subject: Government Response to School Funding Consultation 

Wards Affected: All 

1.1

To advise the Schools Forum of the Government response to the School Funding Consultation document – ‘Completing the reforms to the National Funding Formula’ published in 2021. 

2.1

To note the key elements of the Government response to the consultation and the next steps to a transition to a direct national funding formula.  

3.1

Between 6 July 2021 and 30 September 2021, the Department for Education (DfE) held a consultation on proposed changes to complete reforms to school funding and move to a “direct” schools national funding formula (NFF). This consultation sought views on the approach to reforming the NFF and how to most effectively transition away from the use of local formulae to all schools’ funding allocations being determined directly by the NFF in the years ahead. 

3.2

The key proposals that Government consulted on were: 

• The aim should be that all NFF funding factors – pupil-led and school-led – are included in the formula and that all funding distributed by the NFF should be allocated to schools on the basis of that formula, without further adjustments by LAs 
• To improve premises factors within the NFF in advance of the introduction of the direct formula, so that allocations are based on a consistent, objective assessment of current need, rather than the previous years’ local spending decisions 
• To reform our approach to funding schools experiencing significant growth in pupil numbers, such that these funding arrangements reflect the overall principles of a direct NFF – simple, transparent and fair 
• From 2023-24, to progressively tighten rules governing LAs’ flexibility over schools funding, so that schools’ allocations through local formulae move closer to the NFF distribution, ensuring a smooth transition towards a direct formula and delivering a more consistent funding system  
• To reform the approach to funding for central school services delivered by LAs, to support LAs to deliver their remaining responsibilities and services and ensuring a greater voice for schools in receipt of these services where appropriate 
• An open question on the potential value of moving to a consistent funding year across maintained schools and academies 

4.1

The Government’s response to the consultation was published in March 2022. 

 Completing the reforms to the National Funding Formula - government consultation response  

4.2

The key aspects of the Government response are summarised below: 

• The Government can confirm its intention to allocate funding to all mainstream schools directly through a single national funding formula in the longer term 
• The Government will bring forward the relevant legislation to achieve this change when parliamentary time allows. There is currently no fixed timescale regarding the introduction of a direct national funding formula 
• There will continue to be a gradual approach to transition. The Government intends to require local authorities (LAs) whose local formulae do not already mirror the NFF to progress towards this over time. The proposed approach for 2023-24 will require LAs to use the NFF factors in their local formulae and move factor values at least 10% closer to the NFF values. Full operational details of this will be published in July 2022. 
• Over the coming year the Government intends to issue further consultations to determine how school-led factors, such as premises items, can be incorporated into a direct NFF 
• Another focus of the next stage of consultation on the direct NFF will be a more detailed set of proposals on growth and falling rolls funding. A key part of this consultation will be testing the details of a how a national, standardised approach to growth and falling rolls funding should be designed and implemented 
• The Government confirmed its plan to review the services funded through the ongoing responsibilities element of Central School Services Block and whether this could be rolled into the overall Local Government Finance Settlement. This review will align with the Schools White Paper which provides an overview of the LA role in the school system 
• For central functions which are delivered on behalf of schools, under a direct NFF LAs will continue to have flexibilities to de-delegate funding for maintained schools, and MATs will continue to have the ability to top-slice academy funding 
• The Government recognised the significant drawback of the additional workload for schools and LAs that moving funding to an academic year basis would generate and have advised that they will not prioritise this policy development as part of the transition to introduce the direct NFF 

5.1

In May 2022, the DfE published a further document outlining their plans to legislate for the introduction of the direct NFF. 

National Funding Formula reforms - Schools Bill