8.8 We are already simplifying schools funding by getting rid of ring-fences and giving schools a single funding stream – the Dedicated Schools Grant.
8.9 While the majority of schools are local authority maintained schools, funding will continue to pass to them through the local authority. But as more schools become Academies, with funding being given directly rather than through the local authority, so the requirement for a greater degree of transparency and consistency in allocating school funding becomes more pressing.
8.10 We want all schools to be funded transparently, logically and equitably, in contrast to the opaque, anomalous and unfair school funding system which reflects the historic circumstances of local authorities rather than the specific needs of individual schools and pupils; and leads to similar schools, facing similar challenges, receiving very different levels of funding. We also wish to see schools funded in such a way that every parent knows how much is being spent on their child, and every parent can see what proportion of education spending is not going direct to schools. Funding reform will be introduced in such a way as to minimise disruption and ensure schools’ resources are not subject to sudden and dramatic change.
8.11 Because we plan, over time, to make Academy status the norm and wish to ensure more resources go direct to the frontline in a fairer way, our long term aspiration is to move to a national funding formula to ensure that resources going to schools are transparent, logical and equitable. In the short term, we will ensure that the amount available for the education of every child at school level is published and more money is passed directly to more schools as they become Academies.
8.12 In order to ensure any move to a new national funding formula is fair, transparent and managed carefully, we will invite views on: the merits of moving to such a formula, the right time to begin the transition to a formula, the transitional arrangements necessary to ensure that schools and local authorities do not suffer undue turbulence, and the factors to take into account in order to assess the needs of pupils for funding purposes. We will also invite views on how to ensure that the transparency of the Pupil Premium as additional resources for schools is maintained as the funding system is reformed. We will publish a consultation in the Spring of 2011, following discussion with partners including local authorities, school leaders and teachers’ associations.
8.13 Subject to legislation, we intend to replace the existing Young People’s Learning Agency and set up a new Education Funding Agency (EFA) as an executive agency of the Department with responsibility for the direct funding of the growing number of Academies and Free Schools and all 16–19 provision. This will include the funding of 16–19 provision in FE colleges, sixth form colleges and independent provision. As Academy status increasingly becomes the norm, the EFA will distribute more funding directly to schools. The EFA will also distribute resources to local authorities for them to pass on, as now, to those schools which are not yet Academies.
8.14 Academies and Free Schools will continue to receive funding for the services which maintained schools receive from their local authority but which Academies and Free Schools are expected to pay for, given their independence from local authorities – for example behaviour support. We are reviewing the calculation of this additional funding to ensure it is fair both for local authorities and for Academies and Free Schools.
8.15 Local authorities are ultimately responsible for making sure the needs of some of our most vulnerable pupils, who attract significant additional funding, are met – such as those with highly complex Special Educational Needs and those being educated outside mainstream education. We will ensure that considerations of possible reforms to the school funding system take into account the needs of this group of vulnerable pupils.
8.16 The forthcoming Green Paper on Special Educational Needs and Disability will explore proposals for funding high cost provision – including exploring questions of how to increase transparency in how decisions about funding and support are made and increasing collaboration between local authorities. In relation to the funding of alternative provision, subject to the success of trials of our proposed new approach, we would anticipate that in the longer term, money for alternative provision will go directly to schools.
8.17 We are also committed to all young people staying on in education and training to age 18 by 2015 and a simple post-16 funding system which is fair and transparent will underpin this commitment. Historically, sixth form colleges and general FE colleges have been funded at a much lower level than school sixth forms delivering post-16 education: on average a full time student in a maintained school is funded at £280 more than a student in an FE college107. We will bring to an end the disparity by bringing the funding levels for school sixth forms into line with colleges so that there is equity in funding and increased value for money for the tax payer. The transition towards fairer post-16 funding will begin in 2011–12 and will be completed by 2015. We will provide the necessary transitional protection for schools facing significant changes.
