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New funding formula delayed to 2018

Education Secretary Justine Greening says more time is needed for consultation and implementation over new 'fair funding' system

Posted by Stephanie Broad | July 21, 2016 | People, policy, politics

Following Education Secretary Justine Greening’s statement to Parliament today regarding school funding, Neil Carmichael, Conservative MP for Stroud and chair of the Education Select Committee put an Urgent Question to the secretary of state, asking for reassurance over the timetable of the new system. 

Greening reiterated that she was committed to delivering fair and transparent funding on the basis of schools’ individual needs. 

The first stage consultations on national funding formula for schools and high needs were published in March. Greening said this round of consultations were well received and a response will be published when Parliament returns in the autumn, as well as publishing plans for the second phase.

The new funding formula for schools is now expected to be implemented by the 2018-19 school year, rather than 2017-18. Greening confirmed she would set out full plans for early years funding ‘shortly’ and that schools would not see a reduction to per pupil and high needs funding in the 2017-18 year, while the new system is awaited.

Carmichael raised concerns that the formula could be implemented on time. Greening responded that time was needed for schools and local authorities to understand the changes, but that she was committed to resolving the funding issue once and for all.

Shadow Education Secretary Angela Rayner said the government’s approach to funding was ‘woeful’, and that Greening needed to recognise the issues of growing pupil numbers and teacher shortages that have lead to a reduction in budget in real terms.

Russell Hobby, general secretary of NAHT, said the delay to the reforms was ‘disappointing’.

“School budgets are being pushed to breaking point, so today’s announcement of a further delay will disappoint many school leaders,” he said. “We know from the IFS analysis that budgets will see a real terms cut of 8% between now and 2020; flat budgets are not taking account of rising costs, regardless of the distribution of funding. 

“However, it is too late now to introduce changes for 2017/18, so today’s announcement is not unexpected or unwise. Schools need certainly above all else, and today’s news that the formula will not begin until 2018/19 at least provides a little clarity on when the funding system will be reformed.

“We welcome the announcement that for 2017-18, the current minimum funding guarantee for schools will be retained but we need more money rather than a guarantee that we won't lose a lot. We would press the government to ensure that the most poorly funded schools actually receive more during this transition period.

“Schools cannot yet put in place budget plans for the coming years, so we hope the government, and the new Secretary of State, will continue to work with school leaders to ensure this delay is the final one in a debate that has raged for so many years. Continued consultation and timely publication is essential for this massive change to work properly."

Finance specialists HCSS Education reminded schools to forecast effectively during this period of uncertainty. Howard Jackson, the company's founder and head of education, said: “Today’s news will no doubt leave many academies under a cloud of financial uncertainty. It’s now more vital than ever that leaders take immediate action to prevent going into the red by getting tighter controls over procurement and expenditure and forecasting effectively.

 

“Our research shows that over one in ten schools and academies don’t have a 3-5 year budget in place and half say funding is decreasing significantly. At this time of insecurity, long term financial planning is key to ensuring future cuts are factored in and will not leave academies in financial crisis.” 

The Local Government Association (LGA) welcomed the delay.

"Given the delayed response to the second stage consultation on fairer funding, the Government is right to postpone the introduction of the new national funding formula," said Cllr Richard Watts, Vice Chair of the LGA's Children and Young People Board. "Providing appropriate and adequate teaching and support for pupils – whether in a primary of 50 pupils or a secondary of 2000 – is a complex process that takes time and careful planning. Leaving schools with only a year to potentially make some major changes would have been a cause for serious concern."

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